Carlos Slim Helu has company.
This story first appeared in the May 18, 2009 issue of WWD. Subscribe Today.
Tod’s SpA chairman and chief executive officer Diego Della Valle has doubled his investment in Saks Inc. in the past month and now owns 5.9 percent of the retailer’s common shares.
According to a Securities and Exchange Commission filing released late Friday, the Italian luxury goods mogul has acquired 8.48 million shares of Saks since Feb. 20 for total consideration of $30.3 million, or an average of $3.57 a share. Half of those shares have been acquired since April 28 at prices ranging from $3.49 to $3.83.
The shareholding was first reported on WWD.com late Friday. Saks’ shares closed Friday at $3.34, down 26 cents, or 7.2 percent.
Della Valle made the purchases through his investment vehicle Diego Della Valle & C. S.A.P.A., and the last of them, on May 7, was executed just as he reduced his stake in Tod’s to 64.8 percent. The SEC filing reported the stock buys since April 28 were made through “authorized brokers,” but it isn’t known whether Della Valle took on any of the shares shed on March 10, when 13.8 million shares of Saks common stock were sold for $1.50 each.
A month later, Marsico Capital Management, previously the second-largest Saks shareholder, told the SEC it had sold all but about 600 of its 20.2 million shares of Saks stock.
Della Valle controls 64 percent of the investment firm, according to the SEC filing.
Through Inmobiliaria Carso, Mexican billionaire Carlos Slim Helú remains Saks’ biggest investor, with 25.6 million shares, or about 18.6 percent of those outstanding. Slim also has a Saks poison pill provision staring him in the face if he were to exceed a 20 percent stake.
Della Valle’s acquisitions of Saks shares prior to April weren’t registered with the SEC because his stake was under 5 percent, the threshold at which ownership positions are required to be reported. But Friday’s disclosure places him squarely in the center of major shareholders in the retailing firm, behind only Slim and a number of institutional investors.
It also puts him in the unusual position of being a vendor-owner as Tod’s is a supplier of women’s shoes and handbags, men’s shoes and children’s shoes to Saks. Tod’s SpA owns the Tod’s, Hogan, Fay and Roger Vivier brands, and Della Valle also has invested in the Vionnet fashion house. Last week, Tod’s reported that its first-quarter operating profits were up 1.8 percent, to 37.9 million euros, or $49.6 million at average exchange, as revenues increased 5.4 percent to 201.3 million euros, or $263.3 million.
Della Valle’s entrepreneurial instincts haven’t been restricted to luxury goods, however. One of Italy’s leading businessmen, his investments, which have reportedly put him within striking distance of billionaire status, include RCS Media Group, which owns the newspaper Corriere della Sera; Banca Nazionale del Lavoro; furniture producer Poltrona Frau; film studio Cinecittà; eyewear marketer Marcolin, and Piaggio, a motorcycle firm. Another unusual aspect of the Saks stake is that it appears to be one of Della Valle’s few overseas shareholdings.
Employing boilerplate language, the SEC filing, Schedule 13D, indicated that the purchases of Saks stock were made for investment purposes.
Della Valle couldn’t be reached at press time Friday. Calls to Saks seeking comment weren’t returned.
In Saks, he has picked up a stake in one of the retail companies hit worst by the recession, as spending on high-end goods has hit a firewall. The company reports first-quarter results on Tuesday, but its sales for the period, reported May 7, declined 27 percent to $615.1 million from $842.5 million in the first quarter of 2008. Comparable-store sales, down 31.3 percent in April, are off 27.6 percent so far this year.
The exposure to investor sentiment has made the company’s shares especially vulnerable, falling from a 52-week high of $14.58 one year ago to a low of $1.50 on March 10. Since then, they’ve closed as high as $5.18 on May 4, as Wall Street has reconsidered whether or not fashion retail stocks were taken down too far in the anxiety that swept over the markets following the financial disruptions of September and October.
Last year, the retailer posted a net loss of $154.9 million, nearly two-thirds of it in the fourth quarter, as sales slid 6 percent to $3.22 billion.