The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
L Catterton, a private equity firm backed by French luxury giant LVMH, has agreed to buy a 60 percent stake in Italian fashion company Etro, two sources familiar with the matter said on Sunday.
The deal values Etro at about €500 million ($590 million), the sources said, confirming reports in Italian newspapers La Repubblica and Il Sole 24 Ore.
Etro said in a statement that L Catterton was taking a majority stake in the company, while the Etro family would retain “a significant minority interest.” It did not go into specifics and gave no financial details.
Gerolamo Etro, who founded the company in 1968, will be the chairman and the deal is set to be closed by the end of the year, the statement said.
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“We are thrilled to be working with the L Catterton team who will bring their in-depth knowledge of the fashion sector and an experience in the international development of important brands, allowing our company to reach new heights,” the firm said.
LVMH and L Catterton were not immediately available for comment.
In April, a source close to the matter had told Reuters that the Milan-based luxury brand was considering an expression of interest from L Catterton, an investment firm born out of a partnership among Catterton, LVMH and its billionaire owner Bernard Arnault.
One of the sources said Etro’s four children would stay on as shareholders with a 40 percent stake and would remain owners of Etro’s real estate property and directly operated stores.
L Catterton recently bought German sandal maker Birkenstock. LVMH, which owns a string of Italian labels including jeweller Bulgari, also boosted its stake in Italian luxury shoemaker Tod’s to 10 percent in April.
By Silvia Aloisi; Editing by Elaine Hardcastle and Crispian Balmer
Further Reading: How L Catterton Really Won Birkenstock
The story behind CEO Oliver Reichert’s manoeuvres to get the LVMH-backed private equity firm to buy the footwear maker for more than €4 billion.
The luxury goods maker is seeking pricing harmonisation across the globe, and adjusts prices in different markets to ensure that the company is”fair to all [its] clients everywhere,” CEO Leena Nair said.
Hermes saw Chinese buyers snap up its luxury products as the Kelly bag maker showed its resilience amid a broader slowdown in demand for the sector.
The group’s flagship Prada brand grew more slowly but remained resilient in the face of a sector-wide slowdown, with retail sales up 7 percent.
The guidance was issued as the French group released first-quarter sales that confirmed forecasts for a slowdown. Weak demand in China and poor performance at flagship Gucci are weighing on the group.