KERING BUYS 30% OF VALENTINO
Behind your favorite luxury brands is the corporation that owns and establishes fashion houses, Kering. The company owns major labels from Gucci to Yves Saint Laurent, emphasizing each brand's creativity and quality goods. The Kering group is solely focused on the luxury sphere of fashion and prides itself on only working with high-end brands.
This is proven to be true as Kering has just purchased a 30% stake in Valentino. The Italian fashion house is studded with stunningly elaborate pieces and handcrafted items. Anyone who knows Valentino knows that it is classy and poised, while still having a modern edge. Kering sees these qualities in the company and plans to profit from its strengths.
Source: Kering
French CEO and Chairman of Kering, Francois-Henri Pinault, speaks highly of Valentino and understands the worth it could bring to his company. In a statement made to Vogue, he said, "It's an iconic Italian brand, it's rooted in haute couture, it's a very high-end and very sophisticated segment."
Kering has seen a downfall in sales, specifically from its main source of profit: Gucci. Gucci, being Kering's most successful buy to date, is no longer holding the weight of the company in the way it used to. Kering saw this hole in the market and partnered with Qatari investment fund, Mayhoola, to spend €1.7 billion in cash on this new venture.
Kering informed Valentino that they would be interested in purchasing the entire fashion house by 2028. Although Valentino has not spoken on the matter, it seems that they are going in that direction. This move could be wise for Kering as their sales fell by 23% in this year's second quarter. A full collaboration with Valentino could bring their numbers back up.
Partnering with a business mogul like Kering could boost marketing and sales for Valentino, making it worthwhile for the luxury brand. Kering benefits from this deal with their ongoing partnership with Mayhoola. The more they work with them, the more likely Mayhoola is to become a shareholder in Kering.
Overall, this partnership seems beneficial for all companies involved. Kering can boost its overall company sales by having another luxury brand like Valentino under its belt. Valentino's promotion and production growth will be multiplied with the help of a business mogul of Kering's caliber. As Kering hopes to further their relationship with Mayhoola, having another deal with them through Valentino is helpful. Only the future will tell what this massive contract means for all corporations involved.