MILAN — There will be a true mix of fashion and finance on the Milan stock exchange today.
Valentino Garavani will lead a lavish ceremony at the exchange to mark the start of trading in shares of the new Valentino Fashion Group, which will be valued at close to $1 billion. The events will include a show of 30 vintage Valentino gowns as well as videos tracking the company's history.
The designer is expected to ring the opening bell.
As reported, Marzotto is spinning off Valentino, a controlling stake in Hugo Boss and other clothing assets into the new Valentino Fashion Group. Investors will receive one Valentino Fashion Group share for every Marzotto share they hold. Shares will commence trading at 21.51 euros, or $25.95, per share, Marzotto's closing price on Thursday.
Valentino Fashion Group will be listed in the blue chip segment for companies with a market capitalization of 800 million euros, or $925.3 million, or more.
For Valentino, it marks the third change in ownership of his brand since 1998, when he and his business partner Giancarlo Giammetti sold the company to the now-defunct Holding di Partecipazioni Industriali for $233 million. Garavani shed tears at the press conference to announce the deal.
Valentino languished in the red under HdP, which also owned the once mighty GFT manufacturing company, and Marzotto bought the designer company in 2002 for $210 million (including Valentino's net debt of $179.2 million). The deal included lucrative contracts for Valentino and Giammetti.
The designer and Marzotto were both mum on whether he or Giammetti will hold shares in the new Valentino Fashion Group. But both sides have again refuted speculation that Valentino was preparing to step aside for a new designer at the house.
"I don't intend to stop," Valentino stated after presenting a Capri-themed men's spring-summer collection here on Wednesday. Photos of Garavani in his younger days splashed across a large screen for the show's finale, prompting some to question whether the designer was preparing his last runway bow.
Garavani said that's not the case. He's just nostalgic for the Seventies days of jet setting. "All of us Roman playboys were there," he said.Michele Norsa, chief executive officer of Valentino Fashion Group, also denied the company is looking for a replacement for the 73-year-old designer, stressing it's not something the new publicly traded company is worrying about for the moment. He wouldn't disclose the expiration date for Valentino's contract, but Norsa noted that Marzotto has been working to strengthen the design team surrounding Valentino, particularly for accessories — a category earmarked for future growth.
"Relations are excellent, contracts get renewed. We have a relationship that is exceptionally positive. It's not a question that we are asking ourselves right now," Norsa said.
Graziano de Boni, president and ceo of Valentino Inc. and Marzotto USA, added: "We turned around this company with Mr. Valentino. It wasn't a problem in terms of style, but of business."
Norsa said he thinks the Valentino Fashion Group will appeal to the market as a diversified and balanced way to invest in fashion, noting a melange of products ranging from couture to a sportswear clothing line licensed from a cigarette manufacturer (Marlboro Classics).
Valentino's other big license is for the diffusion line M Missoni.
"We cover a very wide product range that I think makes this company relatively safe from the market's point of view and in terms of our product offering," Norsa said in an interview at Valentino's headquarters. "It's less vulnerable than a company that is exclusively luxury or low-end."
Marzotto, which started out as a wool mill in 1836, 25 years before Italy was unified as a country, made its first fashion foray when it bought Hugo Boss in 1991. Over the years, it inked licensing deals for diffusion lines like M Missoni and Gianfranco Ferre (the Ferre agreements have since ended). The company also expanded in emerging markets by buying textile companies in Lithuania and the Czech Republic.
Since buying Valentino, Marzotto has said it wants to focus on fashion. It's been diversifying out of the less lucrative textile industry and shifting production of some fabrics out of Italy to countries with cheaper labor such as those in Eastern Europe.
Norsa and de Boni explained that the logic of the spin-off is to exalt the fashion and luxury component of Marzotto while shedding a bit of its old image as a manufacturer. Marzotto SpA will retain control of the textile operations that gave the group its start some 160 years ago but have also weighed on its balance sheets in recent years."We will resemble more of a luxury group," said de Boni.
Based on 2004 numbers, Marzotto said Valentino Fashion Group's sales for that year would have risen 5 percent to 1.55 billion euros, or $1.92 billion at exchange rates from that period. The unit would have posted a gross operating profit of 237 million euros, or $293.9 million, and would have net debts of 423 million euros, or $524.5 million.
Norsa said it will be impossible to sustain Valentino's double-digit sales momentum without opening more stores. Currently there are about 35 freestanding Valentino boutiques in the world. This year the brand has opened in Venice, Capri, Istanbul and Abu Dhabi. Another 11 are destined to roll out by the end of the year in locations such as South Coast Plaza in Orange County, California, two in Germany and one in the Ginza district of Tokyo.
The company isn't disclosing what this retail expansion will cost, but Norsa said the Ginza store, due to open in early December, will be the "biggest investment we've made since we bought the company."
Norsa and de Boni said they are also studying potential locations for more U.S. boutiques and/or shop-in-shops depending on the locations they find. Chicago, Atlanta, Dallas, Houston, San Francisco and Boston are all contenders.
"We will move, based on the quality of the projects. We never took big risks to open where we weren't sure we would reach break even a in reasonable time period," he said.
Norsa wouldn't disclose current sales volumes for various product categories, such as the Valentino bridal collection made under license with Spain's Pronovias Society, or diffusion line Valentino Red. But Norsa said overall he's very encouraged with results so far.
Valentino Red, launched in 2003 through a licensing pact with manufacturer SINV Spa, in particular has widened the designer's customer base, de Boni said. Nordstrom, Saks Fifth Avenue and specialty stores like Intermix and Fred Segal carry the line, as well as some Valentino stores.
De Boni said that retailers offering a mix of Valentino accessories and Valentino Red apparel have helped win over "a much younger clientele who ... wouldn't necessarily go to our stores."As for M Missoni, Norsa said that sales of the line will grow more than 30 percent this year.
De Boni said that the line has a style content that positions it between bridge and contemporary in the U.S., and he hopes to round out the brand's offering with more pieces to expand the brand beyond knitwear.
"There's a collection of M Missoni handbags that is very cute and eventually we will launch in the United States," he said.
The list of Valentino Fashion Group marks the biggest fashion-related development on Europe's stock markets since last year's delisting of Gucci Group — a consequence of PPR's buyout of the company.
Tod's and Mariella Burani Fashion Group listed shares on the Milan stock exchange in 2000, breaking ranks with the Italian tradition of remaining closely held family-managed companies. Geox, a footwear company that prides itself on breathable shoe soles, is the only other company with even the most remote fashion affiliation to approach the stock market recently. It began trading last year.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews