Kering to sell Italian shoe brand Sergio Rossi to private equity firm

Kering to sell Italian shoe brand Sergio Rossi to private equity firm

By: New York Times

Posted on: December 9, 2015

Sergio Rossi sold by Kering Group to private equity firmFrench luxury goods group Kering said on Wednesday that it had reached an agreement to sell the Italian shoemaker Sergio Rossi to the private equity firm Investindustrial, concluding months of negotiations.

The terms of the agreement were not announced.

The deal includes Sergio Rossi’s factories, the rights to the brand name, and the shoemaker’s distribution network, according to Kering, the group formerly known as PPR. The transaction was expected to close in the coming weeks, Kering said.

Andrea C. Bonomi, senior partner of Investindustrial, said, “Currently, we are partners of leading brands such as Aston Martin, Flos and B&B Italia that are growing internationally — the same growth path that we are looking to achieve for Sergio Rossi.”

Sergio Rossi, which is based in Milan and has grown to more than 80 directly operated or franchised stores worldwide since opening its first boutique in the 1980s, made a name for itself with its elegant stilettos, leather and metal work. The Gucci Group, now owned by Kering, bought the business in 1999.

Kering, which is in an acquisitions race with LVMH Moët Hennessy Louis Vuitton for smaller luxury brands, made it clear in February that it was looking for a buyer for Sergio Rossi, after continuing losses and the departure of Mr. Rossi, the founder, and of the chief executive, Christophe Mélard. Negotiations with Investindustrial began in July.

“The deal is good news,’’ Luca Solca, an analyst at Exane BNP Paribas, wrote in a note to clients. He said Sergio Rossi had been the exception to the rule in Kering’s mostly positive track record of adding value to small luxury goods acquisitions.

“Larger luxury groups increasingly need to produce more growth with smaller brands,” Mr. Solca added. “As their megabrands progressively shift from ‘stars’ into ‘cash cows,’ there need to be other success stories.”

The sale also points to a continuing resurgence of interest from private equity investors in takeovers of smaller Italian luxury groups that are taking stock of their long-term growth prospects. The past 18 months have seen a wave of high-profile deals, including the acquisition of a 90 percent stake in Roberto Cavalli by Clessidra for an estimated 390 million euros, or about $424 million, in April. That deal followed Blackstone’s taking a 20 percent stake in Versace last year, Carlyle’s investment in the ski jacket maker Moncler, and the Qatari fund Mayhoola for Investment’s buyout of Valentino.

Written by Elizabeth Paton, edited by LuxuryFacts

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