Many want to buy, but few want to sell. The increment registered throughout the last few months by many European companies that are potential prey for large groups, pushes the possibilities of new operations further away. While Kering is currently proceeding on its path after LVMH’s acquisition, other groups have openly stated they plant to make acquisitions, as is the case for Capri Holdings. But “good things aren’t currently on sale”, summarized Renzo Rosso, adding that before selling, some companies are stalling to use the post-Covid advantages. The goal? To increase revenue and bring up the brand’s value. And so, it remains unclear who will close these acquisitions and how they will do them.
Re-evaluation post-Covid
According to what elaborated by MF Fashion, there are some possible preys that saw their value increase thanks to the stock market. From the start of the year, Hugo Boss grew by 97%, Tod’s by 85% and Ferragamo by 39%, to cite just three of the names that were inserted in the list. A potential buyer is slowed by such increments. “The luxury compartment is still characterized by a strong ownership of founding families and it’s impossible to know what their intentions are. Even more so in Italy, where many prestigious brands remain independent”, explained Susy Tibaldi of UBS to MF Fashion. In fact, a few have repeated more than once that they wish to remain independent. For example: Ferragamo, Dolce & Gabbana, Prada.
Who and how?
Not all brands managed to put the difficulties of Covid-19 behind them. Isabelle Chaboud, professor at the Ecole de Management in Grenoble, said to The Fashion Law that she is ready to make a bet. “The more solid financial players will have the chance to buy competitors, third-party manufacturers and suppliers”. So, the new battlefield for LVMH and Kering appears to be eyewear, as analysts focus on François-Henri Pinault of Kering to see the response after the acquisition of Tiffany by LVMH. Yet, the former didn’t have any luck with Richemont, which has sent back the proposal sent by Kering.
American appetite
Capri Holdings, on the other hand, isn’t hiding the fact that it’s planning to make acquisitions. CEO John Idol explained, on November 30th, that his goal is to acquire a European luxury company able to reach 1 billion USD in revenue, because while it may be profitable to buy a smaller one, it wouldn’t make sense. The potential shopping list created by The Fashion Law is solely Italian and includes Armani as well. Speaking of shoes, after dopo Jimmy Choo and Alberto Gozzi, Aquazzurra could also become a part of the US-based group.
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