Bernard Arnault buys 60% of the Italian fashion house Etro

The CEO of the world's largest luxury goods company LVMH, Bernard Arnault, is getting his hands on the Milanese fashion house Etro, through the private equity fund L Catterton co-founded by LVMH, according to a press release published by Etro on Sunday.

"L Catterton Europe will buy a majority stake in the company, while the Etro family will retain a significant minority stake," the statement said.

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Founded in 1968 by Gerolamo Etro, the Milanese house, born as a fabric manufacturer before becoming a ready-to-wear brand in its own right, is currently controlled by his four children. The takeover must be finalized "by the end of the year", the founder will take over as president of the company after the operation.

Etro valued at 500 million euros

LVMH already owns several Italian luxury houses, including Fendi, Loro Piana cashmere and the jeweler Bulgari. It was after a "long negotiation" that the children of the brand's founder, Ippolito, Jacopo, Kean and Veronica, decided to sell "60% of the capital" of the luxury group to the L Catterton fund, according to the Italian daily La Repubblica.

They will remain shareholders up to 40%, or 10% each. Still according to the newspaper, the family would remain the owner of all the real estate assets linked to the activity of the group, from the stores to the head office. According to financial sources, the house, which had a debt of around fifty million euros at the end of 2020, would be valued at around 500 million euros.

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Etro, whose network has 140 single-brand stores around the world, has a clothing line for men, another for women, in addition to accessories, perfumes and other products, including decoration and linens. brand, whose women's and men's ready-to-wear collections are presented each season at Milan Fashion Week, its birthplace, is known among other things for its use of cashmere or paisley patterns.

This announcement comes five months after the acquisition of a majority share of the German brand Birkenstock by the same fund associated with the Financière Agache of the Arnault family. This operation had valued the manufacturer of the famous sandals at around 4 billion euros.

It is important to note that luxury is benefiting from a less devastating post Covid-19 context than for other sectors. In fact, the industry could emerge from the crisis as early as this year, thanks in particular to strong demand from Chinese and American buyers, the consulting firm Bain said in May. The most likely scenario is for a full recovery in 2022, after sales of luxury goods fell 23% to 217 billion euros last year, the biggest drop on record and the first since. 2009, according to the consulting firm.

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(With AFP)

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