French luxury conglomerate Kering has completed the acquisition of a 30% stake in Italian fashion house Valentino, marking a significant move in the luxury fashion industry. This strategic partnership, valued at €1.7 billion, includes an option for Kering to acquire the remaining 70% by 2028, potentially leading to full ownership of Valentino. The transaction is part of a broader strategic partnership between Kering and Mayhoola, which could result in Mayhoola becoming a shareholder in Kering. The deal was finalized following clearance from the relevant competition authorities.
Founded in 1960 by Valentino Garavani, Valentino is renowned for its haute couture and ready-to-wear collections. The brand operates 211 directly operated stores in over 25 countries and reported revenues of €1.4 billion in 2022. Under the leadership of CEO Jacopo Venturini, Valentino has undergone a brand elevation strategy, enhancing its position in the luxury market.
The acquisition aligns with Kering's strategy to diversify its portfolio and reduce dependence on its flagship brand, Gucci, which has faced challenges in recent years. By investing in Valentino, Kering aims to strengthen its presence in the luxury fashion sector and leverage Valentino's established brand heritage.
However, the luxury fashion industry is currently experiencing a slowdown, with Kering's net debt reaching €10.5 billion by the end of 2024. This financial pressure has led the company to consider divestitures to raise funds. The potential sale of Valentino has been a topic of speculation, but Mayhoola has denied reports suggesting such a move.
In summary, Kering's acquisition of a stake in Valentino represents a strategic effort to enhance its position in the luxury fashion market. While the move offers potential growth opportunities, it also comes with financial considerations amid a challenging market environment. The full impact of this partnership will unfold as Kering continues to integrate Valentino into its portfolio and navigates the evolving dynamics of the luxury fashion industry.