Saturday, December 9, 2023

Kering Takes a 30% Stake In Valentino As Sustainability Drives Luxury Sector


Luxury group Kering has announced its acquisition of a 30 percent share in Italian luxury label Valentino from its parent company, Mayhoola.

The deal, valued at €1.7 billion, marks a significant step for Kering’s fashion business, which includes labels Gucci, Balenciaga, Bottega Veneta, and Alexander McQueen, among others. Notably, the agreement also includes an option for Kering to purchase 100 percent of Valentino’s share capital by 2028.

The transaction between Kering and Mayhoola is part of a broader strategic partnership, which may result in Mayhoola becoming a shareholder in Kering itself, reports Vogue Business. The completion of this transaction is anticipated to take place by the end of 2023, subject to necessary approvals.

Valentino Air France
Courtesy Valentino

François-Henri Pinault, chairman and CEO of Kering, expressed his admiration for Valentino’s progress under Mayhoola’s ownership. He conveyed delight that Kering was chosen as the partner for Valentino’s development, considering it an iconic Italian house. Pinault acknowledged this as the first step in their collaboration with Mayhoola, and praised Jacopo Venturini, the CEO of Valentino, for leading the brand’s strong strategic journey of brand elevation.

Valentino recorded impressive revenues of €1.4 billion in 2022, with a recurring EBITDA of €350 million during the same year. Kering’s strategic partnership will further support the brand elevation strategy that Venturini implemented while under Mayhoola’s ownership. As part of this arrangement, Kering will hold a significant share and will have representation on the board.

Mayhoola will retain its majority shareholder status with 70 percent of the share capital. Moreover, Kering and Mayhoola will explore potential joint opportunities in line with their individual development strategies, leveraging the broader partnership.

Rachid Mohamed Rachid, CEO of Mayhoola and chairman of Valentino, welcomed Kering as a strategic partner for the future development of the Maison de Couture. Under Mayhoola’s stewardship, Valentino has strengthened its position as a highly desirable luxury brand, and the collaboration with Kering is expected to reinforce the brand further in its next chapter. Rachid also emphasized the eagerness of Mayhoola to explore investments together with Kering, not just limited to Valentino, but also in other potential opportunities.

gucci 2023 campaign
Gucci leads the industry in fashion transparency | Courtesy

Notably, Kering and Valentino have been strengthening circularity efforts and sustainability commitments in recent years. Sustainable fashion label Stella McCartney, a Kering label, has been at the forefront of innovations in textiles and sourcing.

Earlier this month, Kering announced the acquisition of clean and sustainable fragrance label Creed as it builds out its Kering Beauté division. In May, Kering was one of 17 companies to start working with the first Science Based Targets Network (SBTN) framework aimed at helping companies set specific goals for protecting nature and promoting biodiversity.

Valentino has also been putting a focus on circularity and sustainability. Last December, it partnered with Paris-based fabric reseller Tissu Market to bring deadstock to retail. Last year, it teamed up with Air France in order to offset its travel emissions through a partnership with Air France and KLM to increase sustainable aviation fuel.

Sustainability continues to be a driving factor in luxury purchases. According to data published in February 85 percent of luxury growth is driven by Millennials measuring the social and environmental impact of their purchases.

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