On Thursday, July 27, 2024, French luxury group Kering along with investment entity Mayhoola announced that Kering will rise to become a significant shareholder of Valentino. The partnership is described to fulfil broad strategic relationships between the two.
Both Kering and Mayhoola have signed a binding agreement for the acquisition of a 30% stake of Valentino in exchange for a cash consideration of €1.7 billion ($1.87 billion) by Kering.Â
The agreement introduces an option for Kering to be able to acquire the whole of the share capital of Valentino no later than 2028. Since the transaction is a partnership between Kering and Mayhoola, meant to be more broadly strategic than it seems, there are possible assumptions of Mayhoola becoming a shareholder of Kering in the near future.Â
The Fashion luxury group is known for it’s leather goods and jewellery along with its statement fashion pieces under the tags of Gucci, Balenciaga and Saint Laurent. The group has been apparently missing market forecasts for second quarter sales, emerging out at a growth rate of just 3% and continues to lag rivals. It hopes to turn around business at Gucci by this recent business deal.
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The overall sales came at 4.96 billion euros ($5.45 billion), falling below analysts’ expectations for a 6% increase, all cascading down at a constant rate. Gucci sales went up by 1% over this period. In 2022, Kering had over 47,000 employees and revenue of €20.4 billion.
The numbers are according to a Visible Alpha consensus and as per Kering’s official website.
Valentino is a dream name in the field of fashion, speaking from its Italian roots it now has touched all the corners of the globe – both ear and heart. The 1960 found brand today has 211 directly operated stores situated in more than 25 countries and a record revenue of €1.4 billion and recurring EBITDA of €350 million in the year 2022.
The Valentino Garavani and Giancarlo Giammetti founded house of haute couture, Valentino S.p.A. has been controlled by Mayhoola for Investments LLC since 2012.
The strategic partnership as initiated by Kering is expected to further support the brand elevation strategy as implemented by Valentino CEO Jacopo Venturini under the ownership of Mayhoola, which is responsible for turning the brand into one of the most admired luxury houses in the world.
The Italian Maison de Couture has been a trusted source of fashion for many around the globe, with strong contemporary showstoppers including not just outfits but jewellery, bags, shoes and the latest addition of eyewear and beauty. Valentino is synonymous with luxury and is rightfully so.
Following the business transaction, Kering is set to become a significant shareholder with Board representation while Mayhoola will remain the majority shareholder with 70% of the share capital and will continue to execute on the successful brand elevation strategy.
The transaction is expected to be finalised before the end of 2024, subject to closing by the involved relevant competition authorities.
François-Henri Pinault, Chairman and CEO of Kering has given his word expressing Valentino’s impressive evolution under Mayhoola. He is very delighted that Mayhoola has chosen Kering as its partner for the development of Valentino. This is to be seen how the brand collaboration improves business and revenue in the field of fashion while also delivering a promised finery and elegance that the brands are known for.
