Wall Streeters don't just want Valentino in their closets; private equity firm Permira Advisers wants Valentino in their portfolio. Time is ticking on the open window for Permira to purchase the 24% stake in Valentino owned by Italy's Marzotto family (of the well-known fabric manufacturing house). Permira has until May 28 before their exclusivity agreement with Valentino Fashion Group expires. Permira already acquired a 29.6% stake in Valentino last week, but reportedly has been locked in a bidding war with rival p.e. firm Carlyle.
Is there any category that private equity money can't or won't buy into these days? (With €11 billion in capital, Permira is the fifth largest buyout firm and 30% of their holdings are in the retail/consumer space.)
What's interesting to me is not just private equity's move into the luxury space or into fashion retail (far different from, say, Texas Pacific's buyout of Neiman Marcus or hedge fund manager Eddie Lampert's Sears-Kmart play, which considered the real estate holdings of those companies in their valuations), but I am impressed to see the value that p.e. is putting on a fashion brand name itself.
Permira offered to buy Valentino for $47.60 a share. That puts a €2.6 billion price tag on the luxury atelier, a fashion house subject to the zigs and zags of the fickle fashion cycle and one that has not licensed out its name to tap into the cash-generating, high-margin accessories business so popular in the "masstige" trend. What value does Permira see in Valentino?
Here's what the Valentino buyout tells me:
This is my debut in the blogosphere. I look forward to writing daily on what I'm hearing in the retail space. I'm excited to post online, as the nuggets of information that we beat reporters gather so often end up unreported, due to how crowded the broadcasts get with daily programming. I look forward to hearing from readers/viewers as well.
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