Kering Buys 30% of Valentino for a Valuation of Over €5 Billion

On July 27, Kering announced that they will acquire a 30% stake in Valentino from Qatari investment firm Mayhoola, the parent company of Valentino, for a cash consideration of €1.7 billion.

The transaction is subject to approval and is expected to close by the end of 2023. This is a significant acquisition for Kering’s fashion business and includes an option for Kering to acquire 100% of Valentino’s share capital by 2028.

François-Henri Pinault, Chairman of Kering, said that the acquisition is the “first step” in a broader partnership with Mayhoola in a statement; “I am impressed with the evolution of Valentino under Mayhoola ownership and very delighted that Mayhoola has chosen Kering as its partner for the development of Valentino, a unique Italian house that is synonymous with beauty and elegance. I am very pleased of this first step in our collaboration with Mayhoola to develop Valentino and pursue the very strong strategic journey of brand elevation that Jacopo Venturini will continue to lead.”

The group added that Mayhoola could eventually invest in Kering as part of the partnership.

Currently, Valentino has 211 directly operated stores in more than 25 countries and has recorded revenues of €1.4 billion and recurring EBITDA of €350 million in 2022. This strategic partnership will further the brand enhancement strategy implemented by Valentino CEO Jacopo Venturini under the umbrella of Mayhoola, and is expected to further develop Valentino as one of the most admired luxury houses in the world.

Rachid Mohamed Rachid, CEO of Mayhoola and chairman of Valentino, said as follows.

“Valentino is one of the ultimate Italian luxury authorities and we are very happy to welcome Kering as a strategic partner for the future development of the Maison de Couture. Under our stewardship, Valentino has strengthened its foundations as a highly desirable luxury brand and we will keep reinforcing the brand in the next chapter with Kering. We look forward to our partnership with Kering in Valentino and also in other potential opportunities to explore investments together.”

Mayhoola, which also owns Balmain and Pal Zileri, has long been stuck in a loophole in the growth of its fashion division. Too big to stall brands but too small to compete with the biggest players in the sector, the group feared it needed to scale up or sell.

Mayhoola, the owner of Balmain and Pal Zileri, had been facing a critical juncture concerning the expansion of its fashion division. The brands were sizable enough to avoid stagnation but lacked the scale to compete against the industry’s major players. Consequently, Mayhoola was perceived as requiring either significant growth or a potential sale.

Kering unveiled the acquisition while releasing its half-year results. Despite a 1 percent increase in second-quarter sales for its flagship brand Gucci on a comparable basis, it continues to fall behind its major competitors within rival companies. Last week, LVMH’s fashion division and Prada Group both reported a significant 20 percent growth.

No Comments Yet

Leave a Reply

Your email address will not be published.