By Andrew Roberts and Brooke Sutherland
July 12, 2013
After LVMH Moet Hennessy Louis Vuitton SA (MC)’s deal for clothier Loro Piana SpA, Italian luxury companies from Salvatore Ferragamo (SFER) SpA to Tod’s (TOD) SpA may be the next targets for cash-laden conglomerates in search of growth.
After LVMH announced the $2.6 billion transaction, shares of Italian luxury retailers surged, with Ferragamo and Yoox SpA (YOOX) closing at records and Brunello Cucinelli SpA and Tod’s rising as much as 4.5 percent and 2.8 percent. Shoemakers Ferragamo and Tod’s are the most likely next targets, Equita Sim SpA said. Online retailer Yoox and Loro Piana-rival Cucinelli offer sales growth through 2015 of 88 percent and 45 percent, according to data compiled by Bloomberg.
As growth stalls at LVMH and Gucci-owner Kering (KER) SA, both conglomerates will be among the most active buyers, said Sanford C. Bernstein & Co. Five years into the global economic crisis that sent the Italian economy into free fall, it was the Loro Piana family who approached LVMH about buying a stake in the maker of $10,500 cashmere cardigans to help fund expansion. Other Italian companies also may turn to buyers instead of lenders to help finance growth, said Bryan, Garnier & Co.
Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: