Private Equity Firm Acquires 90% of Roberto Cavalli


May 1, 2015

The luxury fashion designer, Roberto Cavalli, has finally sealed a deal to sell a 90% stake in the business. Several private equity firms courted the company, but in the end, the company opted to go with a fellow Italian firm, Clessidra.


End of an Era
The buyout deal sees the end of an era, with the self-styled “Leopard King” Roberto Cavalli stepping down as the main owner of the company. The outspoken fashion designer has been under pressure to sell, but he had previously declined offers.


Mr Cavalli said after the announcement of the deal, “Clessidra will provide financial, managerial and human resources that will allow the company to grow further and face the challenges of the ever-evolving luxury market.” According to The Telegraph, the Italian private equity firm had tried to buy a minority stake in the fashion house back in 2009.


Clessidra’s vice-chairman, Francesco Trapani, who now becomes the chairman of Roberto Cavalli, told the newspaper, “We really wanted to reach this agreement as we strongly believe in the potential of Roberto Cavalli”. “It is a company with a unique style, unparalleled market positioning and a truly global awareness,” Mr Trapani went on to stay and stated the firm hopes to preserve the fashion house’s famous brand identity.


Financial details of the deal have not been disclosed. Reuters’ sources reported the deal could be worth around $425.90 million.

Competition from Other PE Firms
Clessidra had to overcome competition to acquire Roberto Cavalli and private equity firms had been after the company since 2006. The UK-based private equity firm, Permira, was looking to strike a deal with the company and the firm was considered as the frontrunner for a long time. Reuters reported, Investcorp and VTB Capital had also negotiated with the Italian.


Permira had reportedly offered to buy a majority stake, but according to the Financial Times, “Mr Cavalli did not want to meet its demands on succession planning and his involvement in management.”


Changes in the Company
Roberto Cavalli has undergone some changes in leadership in recent weeks. Peter Dundas returned to the label last month as the creative director. He previously worked in the fashion house in the same role, according to Fashionista. The company has around 200 boutiques and diffusion lines. Furthermore, it has also ventured in to the world of hospitality, as it has opened up a range of hotels and bars. Roberto Cavalli is perhaps most known for its animal prints.


The company has suffered in recent years, with earnings before interest, tax, depreciation and amortization (EBITDA) falling to 15 million euros in 2014. A year earlier EBITDA stood at 22.4 million. The company was still able to increase sales by 4.2% in 2014.


Clessidra Is Focused on the Italian Markets
The private equity firm had reportedly been very keen on landing a deal with Roberto Cavalli. The firm was founded in 2003 and it is dedicated in investing exclusively in the Italian markets. Clessidra has around €2 billion of assets under management and the firm has a medium to long-term approach to finding suitable investment opportunities.

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