Qatar's royal family is buying storied Italian fashion house Valentino, said a person familiar with the matter, in the latest sign of the tiny oil-rich country's appetite for prestigious luxury brands.
Valentino said Thursday it had been acquired by an investment vehicle called Mayhoola, which is backed by a private investor from Qatar. A person familiar with the matter said the buyer was the royal family of the Persian Gulf state.
The value of the acquisition wasn't disclosed, but the person said it was about €600 million ($731 million). Private-equity firm Permira has owned a controlling stake in Valentino since 2007.
The acquisition is one of a series made by investors from the oil-rich country in the luxury-goods business, as the industry has continued to deliver strong growth despite increasing economic head winds.
Qatar has used its immense wealth from oil and natural-gas exports to buy strategic assets all over the world, including London luxury store Harrods and several luxury hotels in France. Earlier this year, it emerged that the Qatar Investment Authority had amassed just over a 1% stake in French luxury-goods behemoth LVMH Louis Vuitton Moët Hennessy .
The purchase of Valentino appears, however, to be a personal project for the royal family of one of the world's richest countries, rather than part of a wider investment strategy implemented by the Persian Gulf nation's sovereign-wealth fund.
A representative for Mayhoola said in a statement: "Valentino is ideally suited to form the basis for a global luxury goods powerhouse."
The brand, founded by fashion designer Valentino Garavani in 1960, has stores across the world from Singapore to Las Vegas and sells a range of high-end products including ready-to-wear garments, accessories and pricey haute couture outfits.
The trophy asset may not have all smooth sailing ahead. As the earnings season kicks off, the first luxury company to report its sales raised concerns among investors that the continuing luxury boom may be cooling. Burberry Group BRBY.LN +3.54% PLC, famed for its plaid-patterned accessories, reported an 11% rise in revenue for its fiscal first quarter, a much lower gain than a year earlier.
While luxury-goods makers generally have ridden out the financial crisis, Permira's ownership of Valentino has already undergone some volatility, with the company earlier renegotiating part of its debt.
Permira acquired in 2007 a controlling stake in Valentino Fashion Group, which included a majority holding in German company Hugo Boss AG, BOSS.XE +0.18% for about €2.6 billion. The market value of Hugo Boss, which excludes Valentino, is now approximately €6 billion.
The record of private investors and funds in the fashion world is patchy. Finding successful designers for fashion houses is difficult even for seasoned entrepreneurs, such as French luxury-goods titans Bernard Arnault and François Pinault. Permira struggled to find the right creative leadership for Valentino after founder Mr. Garavani retired in 2007, and while the label is still a red carpet favorite, it has never reclaimed the international cachet it once had.
"During the past few years, despite swings in the luxury markets, the company has operated with great intensity and remained focused on maximizing the potential of the Valentino brand," said Valentino Chief Executive Stefano Sassi, adding the company is "delighted" by the acquisition.
|WSJ
Friday, July 13, 2012
Qatar's Royals Buy Valentino
2:41 PM
fabounab
