MILAN — How big is Diego Della Valle’s business galaxy?
The Italian entrepreneur is known in fashion circles mainly as chairman and chief executive officer of Tod’s SpA, the luxury accessories and fashion firm founded by his father, Dorino, with sales that hit the $1 billion mark last year and which is publicly traded on the Milan Stock Exchange.
But Della Valle is an astute and powerful investor in his native Italy far beyond fashion, with financial interests in some of the country’s biggest and most high-profile companies that make him one of Italy’s richest men. He’s also the second-largest shareholder in Saks Inc., with a 14.08 percent stake via Gruppo Diego Della Valle & CSAPA at the end of last year, with an option to buy even more.
According to a copy of that investment vehicle’s balance sheet for the fiscal year ending Dec. 30, 2010, Della Valle’s Saks stake was worth 124.9 million euros, or $164.9 million, as of that date. The balance sheet also reveals that Della Valle has negotiated with Italy’s merchant bank Mediobanca SpA a share option transaction for the purchase of an additional 4.97 percent of Saks, or 8 million shares, at a strike price of $12.95 by Dec. 30. Shares in Saks closed down 4.3 percent to $10.94 Friday, but the stock’s value has shot up sixfold since Della Valle started amassing his stake in February 2009.
Della Valle, who declined to elaborate on the balance sheet, has been tight-lipped about his ultimate goal with his Saks holding, but he already has profited handsomely and indicated he might seek representation on the company’s board. It’s also clear that he sees the company as something more than a retailer of luxury goods.
“Saks is in everyone’s collective imagination,” he has told WWD. “It stands for America, with Rockefeller Center and Fifth Avenue.”
Dollar figures are converted at average exchange rates for the periods to which they refer.
The balance sheet shows that in 2010, Gruppo Diego Della Valle reported a net profit of 5.1 million euros, or $6.7 million, compared with a loss of 700,000 euros, or $1 million, the previous year. Last year, sales totaled 704.5 million euros, or $929.9 million, compared with 716.6 million euros, or $1 million, at the end of the 2009 fiscal year.
The Della Valle financial entity, which is based in Sant’Elpidio a Mare, Italy, entirely owns Roger Vivier Paris SAS, through the controlled Dorint Holding SA, and Italy’s Florence soccer team, ACF Fiorentina SpA. Interbasic Holding SA, which is part of the overall Della Valle holding, also controls the Schiaparelli brand via Schiaparelli France SAS, the Paris-based operating company; Schiaparelli Inc., and Parfums Schiaparelli Inc. Della Valle has yet to outline strategies for the relaunch of the brand, founded by Elsa Schiaparelli, who is to be celebrated next spring as part of “Elsa Schiaparelli and Miuccia Prada: On Fashion,” at the Costume Institute exhibition at The Metropolitan Museum of Art.
Industry sources indicate there has been increased activity around the label. Last year, Della Valle said he had plans to revive Schiaparelli in 2012. “We have the Place Vendôme palazzo. We are pleased that the brand is ours, with its archive and history,” he said at the time.
As for other Della Valle investments, they include the following: 10 percent of coffee-machine maker Bialetti; 5.34 percent of motorcycle firm Piaggio SpA; 5.29 percent of RCS Mediagroup SpA, which owns one of the country’s main daily newspapers, Corriere della Sera, and which sources speculate he might be looking to increase; 2.28 percent of Cinecittà Entertainment SpA; 1.27 percent of Equinox2 Investment Sca based in Luxembourg, and 7.19 percent of funds Charme Investments Sca based in Luxembourg and 3.09 percent in Charme II based in Rome. These were founded by Della Valle’s longtime friend, Ferrari president Luca di Montezemolo, and control knitwear brand Ballantyne and furniture firm Poltrona Frau. With di Montezemolo, Della Valle has also invested in Italy’s NTV SpA high-speed train service through MDP Holding, which is also under the Della Valle & C SAPA umbrella.
That’s not all. The fingers-in-every-pie Della Valle also has a 5 percent stake in another financial vehicle, DIVI Finanziaria SAPA di Diego Della Valle & C, and, on a more bucolic note, 100 percent ownership of olive oil and wine producer Azienda Il Violone Srl, also based in Sant’Elpidio a Mare, near Tod’s headquarters.
There’s also a 0.48 percent shareholding in Mediobanca SpA, although Della Valle has clashed with the bank’s board over tight regulations of a shareholder pact that did not allow him to increase his stake in the institution.
Earlier this year, Della Valle downplayed the significance of his diversified portfolio. “These are all high-visibility, low-engagement commitments,” he told WWD.
Della Valle, who is the sole administrator of the group, seems to be continually investing, last year purchasing 0.01 percent in Italy’s giant energy provider Enel SpA and a 1.6 percent stake in the holding company of French newspaper Le Monde for a value of 1.49 million euros, or $1.97 million, adding to his existing 15.62 percent shareholding in Le Monde Europe SAS.
He also bought 0.05 percent of Poligrafici Editoriale, which publishes Florence newspaper La Nazione, among others, and 0.97 percent in biotech company Genextra.
Then there are the needs of any international business mogul, like a private plane. Gruppo Della Valle made an advance payment of 13.8 million euros, or $18.2 million, from its wholly controlled subsidiary Holfly BV toward the purchase of a 14-seat airplane, which was delivered this year. The balance sheet states a “financial engagement” of $39.6 million in reference to a contract underwritten by Holfly BV and Gulfstream Corp. for the plane.
In 2004, Della Valle and his brother Andrea, vice chairman of Tod’s, took a 40.6 percent stake in Marcolin through their holdings DDV Partecipazioni Srl and ADV Partecipazioni Srl, but the balance sheet shows that the entrepreneur also holds a 0.51 percent stake in rival eyewear maker Safilo SpA through Gruppo Della Valle.
In reference to Tod’s, most of the luxury firm is logged under another umbrella. Della Valle controls a 53.6 percent stake in the luxury goods firm through his Di Vi Finanziaria and a 2.28 percent via Gruppo Diego Della Valle.
At the end of last year, to increase the liquidity of Tod’s shares, Gruppo Diego Della Valle sold 6.08 percent of the luxury firm for 28.9 million euros, or $38.1 million, asking Mediobanca to place the shares on the market. Separately, Della Valle and his brother Andrea, vice chairman of Tod’s, also sold 1.96 percent of the group’s share capital each. The operation netted the Della Valle brothers 232.5 million euros, or $307 million. After the placement, the Della Valle family remained the largest shareholder of the company, parent to the Tod’s, Hogan, Fay and Roger Vivier brands.
Last year, Della Valle also sold Holpaf BV, which owned Tod’s Omotesando headquarters and store for 57.4 million euros, or $75.7 million. He bought the site in 2005, rented out the space to Tod’s, which then purchased the venue.
The balance sheet shows the group holds investments in real estate for 354 million euros, or $467.2 million.
The group issued no dividends, but booked surplus reserves of 335 million euros, or $442.2 million.
As of Dec. 31, 2010, debt stood at 176.9 million euros, or $233.5 million, down from 204.5 million euros, or $292.4 million, the previous year.
The balance sheet said the international financial markets showed signs of picking up in the fiscal year, with positive repercussions on the performance of the group. “In such a macroeconomic scenario, the group, as in recent years, has focused its activity on long term investments believed to be strategic, limiting trading activities and ensuring access to bank credit at satisfying conditions overall,” it reported.
While acknowledging ongoing “elements of instability” on the markets in the first months of 2011, the assessment going forward was that there were “macroeconomic conditions of less volatility. The investments seem to guarantee constant financial fluxes and reimbursement of debt.”
Overall, the balance sheet shows that Della Valle’s reach is a broad one and that, while many of his investments are relatively small in percentage terms, they all add up to millions of dollars. Make that billions: Forbes earlier this year estimated Della Valle’s net worth at $1.3 billion.