Tod’s Group goes private in deal with L Catterton

Tod’s Group goes private in deal with L Catterton

Tod’s has announced plans to go private in a deal with LVMH-backed private equity firm L Catterton, which would see the Italian luxury shoemaker delisted from the Milan Stock Exchange. The Della Valle family will retain majority ownership of the company with 54% of the total capital, while L Catterton will receive 36%. Minority shareholder LVMH, which owns 10% of Tod’s, retains its stake.

L Catterton will pay 512 million euros ($552 million), or 43 euros per share, for its stake in Tod’s, a 17.6% premium to the share price on February 9, the last trading day before the announcement. This news comes after the cancellation of a previous plan to transition to the private sector, which was announced in August 2022.

The Tod’s Group, which includes the Tod’s, Roger Vivier, Hogan and Fay brands, steadily grew sales during the 2000s to become a billion-dollar company. But the momentum stalled in the mid-2000s, as department stores, which the group had relied on, struggled to maintain relevance and consumer interest in more youthful, streetwear-inspired concepts. Then came Covid-19, which hit travel retail, office wear and occasion wear, channels and categories that were core to the group. Sales surpassed their 2015 peak only last year, rising by 11.9 percent to €1.12 billion.

The deletion of Tod’s could lead to increased marketing spend to revitalize the group’s brands, as well as more radical steps to clean up distribution beyond the scrutiny of public markets: The company’s full-price business suffers from heavy exposure to discount outlets and wholesalers. But rewiring during a broader slowdown in demand for luxury goods may require a short-term financial hit.

“I am very pleased to announce this transaction, which will provide further benefits for the future development of the Tod’s Group, which has been built through continuous investments and challenging goals,” Diego Della Valle, Chairman of Tod’s, said in a statement. “We decide that leaving the exchange now – with which we have always had an excellent relationship – is the most appropriate strategic choice.”

The ties between LVMH and Tod’s run deep. Della Valle has sat on the French luxury group’s board since 2002, and LVMH raised its stake in Tod’s to 10 percent in 2021, when the Italian group was struggling to recover from the pandemic. Top LVMH executives, including Sidney Toledano and Michael Burke, are a regular sight at Paris fashion shows for Della Valle’s relaunched Schiaparelli brand.

LVMH has increasingly relied on L Catterton – a fund specializing in consumer companies founded by LVMH and Groupe Arnault in 2016 as a joint venture with US private equity giant Catterton – to make strategic plays in fashion without acquiring brands outright, or having to manage them through Its fashion group unit includes fast-growing luxury houses such as Celine and Loewe. The fund masterminded Birkenstock’s rapid expansion and IPO last year, and acquired a controlling stake in Italian fashion brand Etro in 2021.

Matteo Tamburini, who was appointed creative director of Tod’s in December, will show his first collection during Milan Fashion Week later this month.

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