MILAN — Roberto Cavalli may have found himself an investor at last.
The designer is said to be close to signing a deal to sell 60 percent of his namesake company to VTB Capital, part of VTB Group, a major Russian investment bank, for 500 million euros, or $667.5 million. The deal values the brand at 830 million euros, or $1.1 billion at current exchange.
As of late Sunday, talks between Cavalli and VTB were still going on, according to sources. They said the designer, who has cut his vacation to return to Milan for the talks, is eager to complete a deal. One stumbling block is a governance issue and how that would impact the role of Cavalli’s wife, Eva, who helps him design the collections, the sources said.
The sale is expected to close in October.
If a deal is completed, it would end the long-running saga of Cavalli searching for an investor, which began more than five years ago with talks with private equity firm Clessidra SGR SpA. At the time, the designer was in discussions to sell a 30 percent stake in his firm, but the talks broke down over price.
Cavalli went back on the hunt for an investor earlier this year. Private equity fund Permira was interested in acquiring the entire company but, again, talks broke down over valuation. Sources said Permira recently reentered the picture, but VTB Capital edged it out.
Bahrain-based Investcorp, a former Gucci owner, was also said to be looking at the company.
VTB Capital is relatively new to the fashion scene. One of three divisions of VTB Group, the firm is based in Moscow with offices in London; New York; Hong Kong; Dubai; Singapore; Vienna; Kiev, Ukraine, and Sofia, Bulgaria. According to its Web site, the company advised on more than 20 mergers and acquisitions transactions in Russia last year.
The sale of a majority of Cavalli to the Russian firm would be the latest in a string of acquisitions of Italian brands by foreign firms. It comes six months after the sale of a 20 percent stake in Versace to Blackstone Group for 150 million euros, or $205.8 million at then-current exchange, which valued the entire group at 750 million euros, or $1 billion. Other acquisitions of Italian brands in recent years include LVMH Moët Hennessy Louis Vuitton’s purchases of Bulgari and Loro Piana.
VTB’s investment comes as Cavalli is without a chief executive officer after the departure of Gianluca Brozzetti in January. A successor is expected to be appointed shortly, however, sources said. Brozzetti and chief operating officer Carlo Di Biagio, who left at the same time, remained minority shareholders in the firm.
Shortly thereafter, Daniele Cavalli, the son of the designer and his wife Eva, also left the company. He had designed the brand’s men’s wear collections.
In January, Cavalli reported 2013 unaudited earnings before interest, taxes, depreciation and amortization, which are expected to represent 11.2 percent of total revenues. Sales in the fiscal year ended Dec. 31 grew 9.3 percent to 201 million euros, or $265.3 million at average exchange. The company has not reported results for the first half of 2014.
Cavalli has continued to expand, however. He opened a restaurant in Ibiza several months ago and in February unveiled his global flagship on Via Montenapoleone in Milan. The 16,200-square-foot store covers five floors and carries the brand’s women’s, men’s and children’s wear and accessories as well as its home collection.
“The spaces available on Via Montenapoleone are getting fewer and fewer and prices are incredible,” Cavalli told WWD at the time of the opening. “But it’s so important to be here because Via Montenapoleone keeps growing, while in many other international cities several shopping streets are slowing down. Take Sloane Street in London, there is a lack of customers there.”
Cavalli created an exclusive women’s collection of apparel and accessories, named ‘Montenapoleone’ Limited Edition and based on the house’s iconic leopard prints, available only at the location. He also revealed at the time that he is developing another line.
“I’m creating a more casual and fun line of T-shirts and sweaters for the Roberto Cavalli label,” said the designer. “Then, I would like to add a jeans range, but I’m still waiting for another supernatural idea, I’m waiting for divine inspiration,” he said.
But the designer has always insisted that he has been unchanged by his success. At the biannual AIDS fund-raiser Convivio event in Milan in June, Cavalli was thronged by fans trying to get selfies with him.
“They still love me. I guess it’s because I am a simple person and they realize it. In the end, the word spreads that I am kind and friendly,” he said.
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews