CORONA, Italy — Sergio and Pier Luigi Loro Piana, the brothers who head Italian cashmere clothier Loro Piana SpA, have emerged as billionaires after agreeing to sell 80 percent of the family-owned company to LVMH Moet Hennessy Louis Vuitton SA.
LVMH’s 2 billion euro ($2.57 billion) purchase is subject to approval by competition authorities, the Paris-based company said yesterday in a statement. The deal gives Quarona, Italy- based Loro Piana an enterprise value of 2.7 billion euros. Enterprise value is defined as market capitalization plus cash minus debt. The Loro Piana brothers will retain 20 percent of the business, LVMH said.
“LVMH has proved that it respects and nurtures family businesses and is most likely to respect the values and traditions of our maison,” the brothers said in the statement.
Each brother has a net worth of at least $1 billion, according to the Bloomberg Billionaires Index, based on their respective 10 percent stakes in Loro Piana and after-tax proceeds from the sale.
A spokeswoman for Loro Piana confirmed the company was entirely family-owned before the LVMH purchase, and declined to comment on individual holdings. Each of the brothers owned 38 percent of the company, according to a 2007 article published in Milan newspaper Corriere della Serra. The balance was held by their sister, Lucia, and mother, Ellen Nathan.
Orbis, a database of company information published by Bureau van Dijk, showed Pier Luigi, Sergio and Lucia, as shareholders.
The Loro Piana family has been trading wool and fabrics since the early 1800s, according to the company’s website. The current company was founded in 1924 by Pietro Loro Piana in Italy’s Piedmont region. Pietro’s nephew Franco -- Pier Luigi and Sergio’s father -- began exporting fine fabrics to international markets in the 1940s. Pier Luigi, 61, and Sergio, 65, took over in the 1970s, and developed the brand and expanded into luxury retail.
The brothers alternate the roles of president and vice president at Loro Piana, and will continue to run the company, said LVMH.
The company is the biggest western producer of cashmere and the largest single purchaser of the extra-fine merino wools in Australia and New Zealand, according to LVMH. In 1994, Loro Piana was awarded the exclusive rights to reintroduce vicuna fiber, made from the silky wool of an animal found only in the Andes.
Loro Piana, which sells deerskin jackets for $5,680 and cashmere sweaters for $1,594, is expected to have revenues of 700 million euros this year from 631 million euros in 2012, according to LVMH.
The brothers join another Italian knitwear billionaire, Brunello Cucinelli, founder of Solomeo-based Brunello Cucinelli SpA, whose shares have jumped almost 80 percent in the past year on demand for its luxurious garments, such as cashmere cardigans and $4,530 suede jackets.
By: Devon Pendleton, Tom Metcalf with assistance from Andrew Roberts in Paris; Editors: Peter Newcomb, Matthew G. Miller