Luxury fashion group Kering has unveiled perhaps the biggest industry deal this year, announcing it will acquire a 30 percent share in Valentino for EUR 1.7 billion (USD 1.88 billion), with an option to buy the remaining shares by 2028.
The deal is part of a strategic partnership between Mayhoola, Valentino’s majority shareholder, and Kering, which owns luxury houses such as Gucci, Bottega Veneta, Yves Saint Laurent, and Balenciaga, among others.
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The partnership will support Valentino’s brand elevation strategy and Kering will become a significant shareholder with board representation, as Mayhoola remains the majority shareholder. The transaction is expected to close by the end of 2023, subject to regulatory approval.
François-Henri Pinault, chairman and CEO of Kering, commented, “I am impressed with the evolution of Valentino under Mayhoola ownership and very delighted that Mayhoola has chosen Kering as its partner for the development of Valentino, a unique Italian house that is synonymous with beauty and elegance.”
Rachid Mohamed Rachid, CEO of Mayhoola and chairman of Valentino, said: “Under our stewardship, Valentino has strengthened its foundations as a highly desirable luxury brand and we will keep reinforcing the brand in the next chapter with Kering. We look forward to our partnership with Kering in Valentino and also in other potential opportunities to explore investments together.”
The announcement came as Kering reported results for the first half of the year, which has so far been marked with another significant deal in Kering’s acquisition of Creed, described by Pinault as part of “decisive steps” in expanding Kering’s footprint in the luxury universe.
“In the first half, we pursued our investments in our Houses’ desirability and exclusivity. While engaging in critical forward-looking initiatives, we maintained a high level of profitability,” Pinault said.
In the first half of 2023, the group generated EUR10.1 billion in revenue, a 2 percent increase in both reported and comparable terms. Similarly, in the second quarter of 2023, sales increased by 2 percent as reported and 3 percent on a comparable basis. Kering’s retail network, including e-commerce sites, saw a 4 percent growth on a comparable basis in the second quarter, led by strong performances in Asia-Pacific and Japan. Western Europe also showed solid growth, while sales declined in North America.
Key brand Gucci’s revenue for the period amounted to EUR5.1 billion, down 1 percent as reported but up 1 percent on a comparable basis.
Yves Saint Laurent’s revenue for the first half of 2023 amounted to EUR1.6 billion, up 6 percent as reported and up 7 percent on a comparable basis. Sales for Bottega Veneta were unchanged as reported but up 2 percent on a comparable basis, with sales from the directly operated retail network up by 6 percent on a comparable basis.
Sales for the group’s other houses totalled EUR1.9 billion, down 5 percent as reported and on a comparable basis, but saw strong momentum in the directly operated retail network, with sales up 8 percent on a comparable basis. Balenciaga began its recovery, boosted by Asia-Pacific sales.
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Another highlight for the group, Kering Eyewear’s first-half 2023 revenue hit a record EUR869 million, an increase of 51 percent as reported thanks to the significant contribution of Maui Jim.