Various reports state that the Qatar royal family is in talks with London-based private equity fund Permira over the sale of the Italian fashion house Valentino. The decision is expected to take place at the end of the month. If concluded, the sale of the entire Permira stake in Valentino would result in the Qatari’s first acquisition of a top fashion house. The Emir’s wife, Sheikha Mozah, is known for her love of Valentino dresses.
Also owners of the London department store Harrods, the Qataris have become one of the world’s most active investors. Just a few months ago, in mind, Qatar Holding bought a 1.03 percent stake of luxury conglomerate LVMH.
One of source close to the negotiations, reported that the owners wanted to delay the sale of Valentino for a year yet the offer from the Qataris convinced them to speed up the process. Others sources stated that an agreement was a likely turnout but that there was no done deal. Valentino, on the other hand, said that no sale had been agreed upon. British media stated the deal could be worth 550 million pounds.
Permira bought Valentino Fashion Group (which included German menswear brand Hugo Boss at the time) at a market peak in 2007 for $5.4 billion causing it to be one of the largest deals in Europe that year. Yet when the financial crisis hit in December 2009, Valentino Fashion Group had to restructure its debt and thus place Hugo Boss, which has a market share of 5.4 billion euros, in a separate entity. Permira now has a majority stake in Hugo Boss and has full ownership of Valentino Fashion Group.
The house gained new attention in 2008 when designers Pier Paolo Piccioli and Maria Grazia Chiuri stepped on board giving the brand new life as well as a market for young clients. In 2011, the brand reported revenues of around $400 million, a result of work to target new clients in Asia and the USA.
Due to the luxury sector’s ability to withstand the turmoil of financial crisis, often fashion brands with a good repetition and appeal have attracted cash-rich investors who seek financial gain as well as global recognition. Will the Valentino sale be a similar case in point?