The Latest Investments, Brioni, Château Lascombes & Proenza Schouler


Sophie Doran | August 02, 2011

The Latest Investments as LVMH increase it's stake in Hermès, France's PPR looks at acquiring Italy's Brioni and L Capital makes its first mark in India

The interior of the Carlyle Hotel, Manhattan, recently purchased by Chinese billionaire Cheng Yu-Tung

The Latest Investments as LVMH increase it’s stake in Hermès, France’s PPR looks at acquiring Italy’s Brioni and L Capital makes its first mark in India

The market for luxury goods continues its optimistic journey through 2011, with the release of several major players half and quarter year results in late July. LVMH and PPR reported year-on-year revenue growth in the double digits, as did Daimler (30%), Hugo Boss (29%), Rémy Cointreau (23%), DeBeers Diamonds (55%) and Swatch Group (24%). The fastest moving markets were generally BRICS countries, even further fuelled by an increase in Asian tourism, thought to be driving retail in the UK, US and Europe.

HSBC Luxury Analyst Antoine Belge, spoke with WSJ and revealed that “Luxury is no longer the first thing that people cut back on. This is reflected in the resilience of stronger brands during the last crisis.” With that in mind it is no surprise that everyone from luxury conglomerates to national insurers to Chinese billionaires are snapping up everything from vineyards to distributors to big fashion names like Proenza Schouler and Brioni. Even the Ferragamo family have increased their own shareholdings in the newly public enterprise.

In continued times of prosperity, we present a round up of the need to know investment activity in the luxury sector.

Speculation: PPR, Brioni

The latest luxury Italian brand to fuel the rumour mill is Brioni, allegedly garnering some serious interest from PPR, with some sources suggesting parties are already exploring due diligence. The French group is reportedly courting the family-owned Italian tailor for a €350 million buyout, including its existing €90 million worth of debt. The net figure of €260 million would value the business at around 12 times Brioni’s estimated 2011 earnings of €22 million.

Source: Reuters

Sold, Château Lascombes, MACSF

400-year-old Château Lascombes, one of Bordeaux’s biggest vineyards, has been bought by a French insurer MASCF for €200 million. US private equity group, Colony Capital, purchased the 118-hectare vineyard over a decade ago for €77 million and despite interest from several parties, decided to sell to a French buyer “with a long-term vision”.

Source: Financial Times

Invested: LVMH, Hermès

Shortly after posting impressive half-year results for 2011, LVMH also revealed it has increased its stake in Hermès from 20.2 to 21.4 percept. Addressing the press, LVMH Finance Director Jean-Jacques Guiony remarked: “In the course of the semester, we increased our shareholding in Hermes.” He also added that LVMH does not own any financial instruments, other than those disclosed, which could raise its Hermes holding further.

Source: Reuters

Bought: Rosewood Hotels & Resorts, New World Development Co

Maritz, Wolff & Co. has sold luxury hotelier Rosewood Hotels & Resorts, which includes New York’s Carlyle Hotel, to Hong Kong billionaire Cheng Yu-Tung’s New World Development Co, for a rumoured $570 million. The transaction also includes properties in Santa Fe, Dallas and the British Virgin Islands.

Source: Bloomberg

Sold: Proenza Schouler, Valentino Fashion Group

Ending over one year of speculation that Theory CEO Andrew Rosen was interested in buying Proenza Schouler, a deal has now been signed releasing ownership from Valentino Fashion Group, a subsidiary of Permira, to a group of investors that include Rosen and John Howard. Whilst figures remain undisclosed, it has been reported that Valentino Fashion Group will keep a minority share in the new partnership.

Source: Fashionologie

Invested: L Capital, Genesis Luxury Fashion

L Capital Asia made its first investment in India, with the purchase of 25.5 per cent of Genesis Luxury Fashion, one of India’s leading distributors of luxury goods. Just one week after, L Capital has revealed it is in talks to purchase a further 14.5 per cent share, brining total holdings to 40 per cent.

Source: The Economic Times

Bought: Ogilvy, The Weston’s Selfridges Group

The Weston’s Selfridges Group has purchased Montreal’s prestigious department store, Ogilvy, from a private investment group for an undisclosed amount. The Canadian operation joins luxury department stores such as Brown Thomas in Ireland, Selfridges in the United Kingdom, de Bijenkorf in the Netherlands and Holt Renfrew in Canada.

Source: The Province

Sold: Paule Ka, Change Capital Partners

UK based private equity firm Change Capital have purchased a 70 per cent stake in French ready-to-wear label Paule Ka, from the founding Cajfinger family for an undisclosed amount. Serge Cajfinger remains creative designer and president, whilst the previous investor, a fund managed by a subsidiary of the Caisse des Dépôts, has sold its stake.

Source: Financial Times

Bought: Jean Patou, Designer Parfums

Designed Parfums has acquired the Jean Patou beauty business from P&G; Prestige for an undisclosed amount. Designer Parfums is a subsidiary of the Shaneel Enterprises Group, which specialises in the development of luxury fragrances and currently owns and licenses brands such as Agent Provocateur, Jean Louis Scherrer, Aigner Parfums and Worth.

Source: Basenotes

For more in the series of The Latest Investments, please see our most recent editions as follows:

- The Latest Investments, Prada, L Capital & Qatar Luxury Group
- The Latest Investments, Moncler, Ferragamo & Pomellato
- The Latest Investments, Diageo, Rothschild & Gilt Groupe

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