The future of the Italian fashion house Valentino is apparently again the focus of negotiations between the French luxury group Kering and the Qatarian investment fund Mayhoola. As the Italian daily newspaper Corriere Della Sera reports, both shareholders should: Interior considerations about the strategic future of the brand. After completing this talks, Valentino could come back on the market again.
At the request of Fashionunited, Kering did not want to comment on the rumors. Mayhoola, however, denied. “This message is not true,” Rachid Mohamed Rachid, CEO of Mayhoola, told Reuters.
In December 2023, Kering took over a 30 percent participation in Valentino for 1.7 billion euros in cash. The agreement includes an option to acquire the remaining 70 percent of the shares by 2028 at the latest.
Pressure on king grows
According to Corriere Della Sera, the acquisition of the Valentino participation was the highlight of Kering’s strategic shopping offensive. Analyst: Inside the investment bank Bernstein estimates that Kering has invested around 14 billion euros in takeover of brands and luxury properties in recent years – including the prestigious Palazzo in Via Montenapoleone 8 in Milan.
This expansion strategy increased the group’s debt to 10.5 billion euros – just in a phase in which demand in the luxury segment cools down. Especially Gucci, the most important brand of the group, suffers from declining sales. On the stock exchange, Kering lost around 40 percent in one year.
In response to this, Kering is currently checking his entire portfolio. In this context, the Italian outlet activities were sold and new investors for real estate in Paris, Milan and New York were sought. The participation in Valentino could now also be re -evaluated. The purchase price for the remaining 70 percent was not yet fixed in 2023 – according to Corriere, it depends on the further business development and the growth prospects of the brand.
However, a return sale would only be possible with the consent of Mayhoola. The agreements between the two parties include a five-year lock-up period for a possible share sale. A conceivable solution would be a third investor who takes over the proportion of Kering and that of Mayhoola.
In 2024, the sales of the Valentino fashion house remained largely stable in the previous year and achieved 1.31 billion euros. This corresponds to a decline of two percent with constant exchange rates and three percent in current exchange rates compared to the previous year. In 2023, the company had sales of 1.35 billion euros.
This article was used with digital tools translated.
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