The announcement that the French luxury company has purchased a 30% interest in Valentino for €1.7 billion in cash made headlines on Thursday afternoon. Valentino is owned by Mayhoola, who also owns Gucci and Gucci.
The legally binding agreement also gives Kering the opportunity to buy out Valentino's whole share capital by the year 2028. They said that the deal was "part of a larger strategic partnership" between them and that it might potentially result in Mayhoola becoming a Kering shareholder.
For now, after being examined by competition regulators, the initial minority shareholding arrangement should be finalized by the end of the year. Mayhoola's financial advisor was Rothschild & Co.
One of the most well-known and powerful luxury brands in the industry today, Valentino can unquestionably compete with Kering's portfolio's marquee names like Gucci, Saint Laurent, Bottega Veneta, and Balenciaga.
François-Henri Pinault, Chairman and CEO of Kering, expressed his admiration for the company's development under its current management and his joy that Mayhoola had selected Kering as its partner in the creation of Valentino, an original Italian brand that is closely associated with beauty and elegance.
He added that brand leadership will remain in the hands of CEO Jacopo Venturini.
Mayhoola CEO and Chairman Rachid Mohamed Rachid continued, "We have overseen Valentino strengthening its foundations as a highly desirable luxury brand and we will keep reinforcing the brand in the next chapter with Kering.
Valentino Garavani founded the company in Rome in 1960, and according to Kering, it is "one of the most internationally recognizable Italian luxury houses. Valentino has created an appealing ready-to-wear, leather goods, and accessories offering that appeals to a very loyal customer base and celebrities all over the world. Valentino is a Maison de Couture with a strong heritage, a high-end luxury positioning rooted in Haute Couture, and a portfolio of iconic creations.
The agreement will "further support the brand elevation strategy implemented by Jacopo Venturini under the ownership of Mayhoola, which turned it into one of the most admired luxury houses in the world," the firms claimed in a statement.
With a 30% investment, Kering will have a seat on Valentino's board, but Mayhoola will still be in charge and continue "to execute on the successful brand elevation strategy".
Reference- https://www.businessoffashion.com/briefings/retail/five-key-questions-on-kering-and-mayhoolas-valentino-deal/
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