The Latest Investments, Diageo, Rothschild & Gilt Groupe


Sophie Doran | April 29, 2011

Sales and investment speculation increases in intensity as the media ponders the futures of brands like Salvatore Ferragamo, Burberry, Jimmy Choo & Prada

Sales and investment speculation increases in intensity as the media ponders the futures of brands like Salvatore Ferragamo, Burberry, Jimmy Choo and Prada.

Medill suggests that it is the growing demand for luxury goods in emerging markets has many luxury brands turning to the equity market to fund retail expansion. But one only has to glance at recently released Quarter 1 results to see why luxury brands suddenly look so attractive.

LVMH reported revenue growth of 17%, whilst PPR’s luxury division soared to the tune of 26%. Richemont are yet to share details of this year’s earnings but if the recent success of the timepiece industry is anything to go by, their stable of haute horlogerie, fashion and online retail brands are sure to be enjoying the same scale of success. As the word’s appetite for luxury brands attracts the attention of the finance world, Luxury Society presents our monthly wrap up of investments within the industry.

Launch: J Rothschild Creat Partners

Financier Jacob Rothschild launched a $750 million private equity fund to help Chinese investors to take part in international deals. For the first time, the fund allows Chinese investors the chance to invest in overseas companies via an overseas private equity structure.

“This unique venture will allow China’s private sector to invest in Western companies, whilst providing opportunities for Western companies to enter China’s rapidly growing and vibrant economy,” said Rothshchild.

Source: Reuters

Speculation, Softbank, Gilt Groupe

Japan’s third-largest wireless carrier, Softbank Corp, is rumoured to be close to an investment in Gilt Groupe Inc. to help it create a joint venture in Asia. The deal is said to value the members-only online retailer at about $1 billion, where Softbank would provide approximately $15 million as one of several investors in a funding round of over $100 million.

Source: Bloomberg

Sold: Robert Clergerie, Fung Capital

Recently Fung Capital teamed up with Jean-Marc Loubier, former head of Escada, to buy French shoemaker Robert Clergerie. The private equity group are also currently rumoured to be involved in the sales negotiations of Hermès’ 45% stake in the cosmetics and fragrances group Jean-Paul Gaultier, in competition with Puig and Richemont. In December 2010, Trinity, the distribution arm of parent company Li & Fung, bought Italian brand Cerruti for 53 million euros.

Source: WWD

Speculation, Diageo, Bain Capital

Spirits juggernaut Diageo is said to be teaming up with U.S. buyout firm Bain Capital for a possible joint bid for Stock Spirits Group, maker of the Polish vodka Czysta de Luxe. The Sunday Times speculated that Diageo could spend up to 500 million pounds to buy the distilling and distribution company owned by Oaktree Capital Management LLC.

Source: Bloomberg

Investment, KupiVIP

European and US venture-capital funds has made a $55m investment in KupiVIP, a Russian online shopping club, in what they claim is the largest such transaction in the region’s e-commerce market. The site, launched in October 2008, offers ‘flash sales’ of heavily discounted high street and luxury goods, including Dolce & Gabbana and Tsum.
h4. Source: Financial Times

Speculation, Jimmy Choo, IPO

The latest speculation in the on-going sale of Jimmy Choo, is that the firm is now considering an initial public offering in Hong Kong, valuing the company at US $1.1 billion. It is believed that HSBC Holdings Plc proposed the IPO to Jimmy Choo’s owner TowerBrook Capital Partners LP and the buyout firm is taking the plan “seriously”. However it was also rumoured that Labelux Group, owner of Switzerland’s Bally International AG, teamed up with private-equity firm Investcorp Bank BSC to bid for British accessories house.