[PARIS] Kering is getting more time to exercise an option to buy the rest of the fashion house Valentino, as the French group focuses on reducing its debt levels.
Kering will now have until 2029 to purchase the 70 per cent stake in Valentino owned by Qatar’s Mayhoola, a year later than initially agreed, according to a statement on Wednesday (Sep 10). The firm, which owns brands including Gucci and Yves Saint Laurent, bought a 30 per cent stake in Valentino for 1.7 billion euros (S$2.6 billion) from the Qatari fund two years ago.
The changes to the deal terms come the day after Kering’s incoming chief executive officer, Luca de Meo, told shareholders his top priorities will include slashing debt and costs. Kering’s net debt rose 24 per cent to 10.5 billion euros at the end of last year.
Kering’s purchase of a stake in Valentino was seen as a way to reduce its exposure to Gucci, which accounts for most of its profit and has struggled in recent years. Valentino underwent management and design changes over the past 18 months amid a downturn in demand for high-end fashion.
Valentino had revenue of 1.4 billion euros in 2023, with net income of 23.4 million euros, according to Kering’s 2024 annual report. If options were to be exercised, the “price would be adjusted on the basis of Valentino’s performance and prospects for future years”, the report added. The value of the 70 per cent stake was estimated at four billion euros as at the end of 2024, the report said.
Meantime, Mayhoola’s options to sell the remaining stake to Kering, initially exercisable in 2026 and 2027, have been postponed to 2028 and 2029, respectively, Kering said. BLOOMBERG
