Versace sale to Kors leaves few global luxury brands available
INTERNATIONAL - Gianni Versace SpA’s sale to Michael Kors Holdings Ltd. leaves a dwindling number of independent global fashion brands still up for grabs. Many big names -- from Dior to Gucci to Yves Saint Laurent -- have found shelter under the roofs of global luxury conglomerates like Kering SA or LVMH.
Now Michael Kors and U.S. rival Tapestry Inc., along with China’s Shandong Ruyi and Fosun International Ltd., are looking to emulate the European giants’ multi-brand approach, even as the number of potential targets shrinks. On Tuesday, Kors confirmed that it’s buying the Italian brand for about $2.12 billion and will adopt the name Capri Holdings Limited.
Here’s a short list of brands, from fashion royalty like Chanel to niche brands like Etro, that so far have eluded the reach of financial investors or luxury moguls and that would transform any portfolio.
It’s the epitome of French elegance, founded by Coco Chanel, creatively run by Karl Lagerfeld and beloved by affluent customers who can shell out thousands for a signature boucle jacket or leather handbag with golden-chain trimmings. While the closely held company has become more transparent by reporting some financial metrics, including 2017 sales of $9.6 billion, any suitor faces a formidable challenge: the brothers Alain and Gerard Wertheimer, who own Chanel and have shown no intention to sell. On the contrary: the company said in June that it wants to remain independent and focus on the long term.
The man behind the namesake company has been in business for more than four decades, with creations for catwalks as well as the elegant tweeds worn in gangster movies set in the 1930s. Armani spearheaded the expansion of luxury brands into new fields, adding everything from jeans to hotels and home furnishings. Armani, who has no children, has said that as long as he’s alive, he won’t give up control of his fashion empire, which had sales of about 2.5 billion euros ($2.9 billion) in 2016. But times have been tougher on Armani, who is whittling down his line of brands as sales decline.
From utilitarian trench coats to tartan-covered shirts, Burberry Group Plc is quintessentially British: both rebellious and traditional, and perfect for soggy weather. It’s also attempting a rebound after recruiting a new chief executive officer and creative director, both Italian. As a publicly listed company without a major single shareholder, there are few hurdles to a takeover -- besides a price tag that could easily creep above 10 billion pounds ($13.1 billion).
After a few years in the doldrums, Prada SpA has found its groove again by focusing on what it does best: quasi-ironic designs that range from block-heeled loafers to comic-book images and psychedelic prints that bear an uncanny resemblance to wallpapers from the Soviet era. It’s that ugly-chic design that has won a loyal following for Miuccia Prada, the creative director, majority shareholder and co-chief executive officer and made Prada a $3.5 billion business.
Italian shoe- and tie-maker Salvatore Ferragamo SpA is trying to orchestrate a relaunch, spending more on technology and marketing to capture a younger audience. In February, it announced that its CEO would leave after less than two years. The luxury house is controlled by descendants of Salvatore Ferragamo, who founded the company in Florence in 1928 and went on to make shoes for Audrey Hepburn and handbags for Margaret Thatcher. With a stock-market listing, the company has a value of about 3.5 billion euros, down from a peak of more than 5 billion euros a few years ago.
Moncler SpA is evidence that niche can become mainstream. Nearly defunct a few years ago, it’s turned puffy, shiny winter jackets and accessories into must-have items for the slopes of Courchevel or the Champagne-fueled apres ski and polo tournaments of St. Moritz. The brains behind the rebirth is Remo Ruffini, who is also Moncler’s biggest shareholder and took the company public in late 2013. Today, Moncler is worth 9.5 billion euros. That’s a lot of puffy jackets, even at 1,000 euros a pop.
The Niche Players
Besides these global powerhouses, there are a few family-owned brands with niche appeal that might attract covetous glances.
Etro, with its psychedelic paisley designs, remains in family hands, while Missoni, known for its colorful zig-zag knit designs, sold a minority stake to Italy’s state-backed Fondo Strategico Italiano earlier this year.
Fancy some high-end cashmere, like the humblebrag T-shirt favored by Mark Zuckerberg? Then Brunello Cucinelli might make an interesting target. Publicly listed, the company from Perugia has a market value of 2.3 billion euros.
If leather goods and sleek loafers are the object of desire, there’s Tod’s SpA, with a market value of close to 2 billion euros and its signature rubber-spiked shoes. The company, which also owns a majority of shoe companies Roger Vivier and Hogan as well as clothing maker Fay, is controlled by the family of Diego Della Valle.