Why it’s the BFD: A combination of the two fashion houses would set the foundation for a luxury group with billions in sales along the lines of LVMH, Kering, Richemont or Capri Holdings.
The intrigue: Valentino would be buying a much bigger rival, as it posted just over €1.2 billion in sales in 2021, according to Reuters.
• But Valentino is backed by the deep-pocketed Qatari investment vehicle Mayhoola, which also owns French luxury fashion house Balmain.
Between the lines: While certain subsectors of retail have felt the impact of inflation, the wealthy and aspirational continue to spend on luxury goods.
• The luxury retail M&A landscape has been characterized by middle-market processes of late, with brands like Isabel Marant and Ganni in play and G-III Apparel’s $210 million majority purchase of Karl Lagerfeld.
Yes, and: Giorgio Armani is in good company, with luxury brands such as Tom Ford and Gieves & Hawkes also weighing sale processes.
The bottom line: A major deal involving Armani or Ford would substantially augment luxury M&A volume.