Valentino Approaches Stock Market

Italian luxury fashion firm Valentino may be the next company in the luxury sector to jump into the stock market. Its CEO, Stefano Sassi, admitted during the Paris Fashion Week that the share sale is on the table and could be carried out in 2017.

The main reason to do it would be the intention of the owner to put in value the company, as well as giving liquidity to the stocks. The owner of Valentino is Mayhoola For Investments, a fund of Qatar which acquired the firm in 2012 for about €700 million from Permira. Mayhoola had hired Rothschild to analyze the possibility of selling between 25% and 35% of Valentino, with a total valuation of the company of some €2 billion, almost three times what it paid just 4 years ago.

This amazing return is justified by the company´s business growth. In 2015, revenues grew to near €1 billion, which is 4 times more than five years ago. Ebitda almost doubled compared to the level achieved in 2014, with €180 million. For 2016, Valentino expects to continue growing at double-digit rates despite the weakness of China, where the Italian manufacturer gets a quarter of its total revenues. Its goal is to have 200 stores open in the medium term. Currently it has 130 and opens an additional 25 each year.

The next 12-18 months may bring a wave of corporate operations in the luxury industry, encouraged by low growth (or even decline) of the luxury business globally. In addition to this Valentino´s IPO, Versace also could go public. Besides this, experts suggest that a number of candidates could be bought by the big names of the industry. Some names are present in all pools of possible «victims»: Balmain, Dolce & Gabbana, Furla, Longchamps and Maurice Lacroix.

Disclosure: The Luxonomist not responsible for the views expressed in the article. The text was written freely expressing ideas, without receiving any compensation. The author has no business relationship with any of the companies whose shares are listed in this article.