Italy’s Salvatore Ferragamo SpA announced plans to purchase shares in three separate joint ventures in Greater China, as the luxury brand homes in on the major Asian market, amid a slowdown in sales globally.
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In a move that signals the importance of Greater China for the Florentine group, Ferragamo will become the sole shareholder of the three joint ventures established with businessman Peter K.C. Woo for a total of USD 42 million.
Ferragamo, in partnership with Ferragamo Hong Kong, has purchased the minority interests held by Imaginex Holdings Limited and Imaginex Overseas Limited in the joint ventures — Ferragamo Moda (Shanghai) Co. Limited (FMS), Ferragamo Retail Macao Limited (FRM) and Ferrimag Limited (FIM) — incorporated to distribute the brand’s products in the Greater China area.
The equity interests involved in the purchase are equal to 25 percent of FMS and FIM and 24.8 percent of FRM, resulting in Ferragamo and FHK becoming the sole shareholders.
“The conclusion of the transaction will strengthen Ferragamo’s presence in the Greater China area, one of the most relevant markets for the group, at a very important time for the brand’s relaunch,” said Marco Gobbetti, CEO and general manager of Salvatore Ferragamo.
The Woo family has been a partner of Ferragamo in Greater China for more than 20 years and has helped distribute the brand in China, Hong Kong, Taiwan and Macao.
“The acquisition of the equity interests held by Imaginex Group concludes an extraordinary path of alliance and development conducted, together with Peter Woo, over the last 35 years, which has allowed the group to be among the first Italian luxury brands to establish itself in this important market,” said Leonardo Ferragamo, chairman of Salvatore Ferragamo.
“Today, with the consolidation of the equity interests, having reached an efficient size and organization, we will be able, with increased intensity, to continue to strengthen our presence in these markets, continuing to count on the alliance of Peter Woo, who remains a shareholder and director of our company.”
The acquisition payment will be settled from available cash resources at the same time as the transfer of the equity interests and will take place within November 9.
The announcement comes just days after Ferragamo revealed total sales of EUR 844 million for the first nine months fell 9.2 percent in constant exchange rates, compared to the prior-year period.
Asia Pacific, the Florence-based firm’s largest market, registered a 16.4 percent decrease in net sales to EUR 263.92 million, while the Japanese market fell 11.6 percent to EUR 64.36 million.