After four months, Tod’s Group abandoned plans to delist in December following a failed tender offer, so questions are now swirling over chairman and chief executive officer Diego Della Valle’s possible next steps.
The delisting was to enable the group to invest in each of the brands it controls — Tod’s, Roger Vivier, Hogan and Fay — in the medium and long term without the limitations of having to report quarterly results.
The goal was to enhance the visibility of each label, strengthening their positioning in the high end of the market, and provide more operational autonomy. Della Valle in August, revealing the plan to delist, expressed his confidence in the quality of the brands, the group’s managerial structure and the expertise of the group’s artisans. There is no reason to believe anything has changed in this sense, but the entrepreneur will now have to continue to develop the business under the scrutiny of the stock market.
Related Galleries
Another potential development could be in mergers and acquisitions, as analysts have for quite some time speculated on a possible sale of the Tod’s Group, pointing to LVMH Moët Hennessy Louis Vuitton chairman and CEO Bernard Arnault as a buyer. This speculation increased after LVMH increased its stake in Della Valle’s company to 10 percent for a total of 74.5 million euros in April 2021.
Diego Della Valle & C. Srl, a company controlled by the Italian entrepreneur, entered into a sale and purchase agreement with Delphine SAS, a fully owned subsidiary of LVMH, for the sale of 2.25 million shares of Tod’s SpA, representing 6.8 percent of the capital. LVMH is a longtime investor in Tod’s, as it already owned 3.2 percent.
LVMH remained neutral in the tender offer and Arnault has not publicly disclosed plans or intentions over his stake in Tod’s.
Della Valle has repeatedly denied the company is for sale and has over time bought back shares with his brother Andrea.
Sources and analysts have also been wondering if the delisting could signal Della Valle’s intention to expand each brand as a prelude to the breakup of the group, potentially selling off each label separately.
In any case, Della Valle in a statement in November reiterated that “the main objectives are to increase revenues and to develop and give ever greater visibility to individual brands, increasing their asset value and, therefore, that of the whole group.”
The idea to abandon the Milan Stock Exchange after 22 years was to come through a merger of Tod’s SpA and DeVa Finance, the latter entirely held by DI.VI. Finanziaria di Diego Della Valle & C.
The Della Valle family said in August it was launching a tender offer to acquire 25.55 percent of the company’s shares at 40 euros a share, with the goal to reach a 90 percent stake at a cost of more than 338 million euros.
However, the public offer in October did not fulfill the 90 percent threshold.
“The price of 40 euros per share offered to the market was the result of a careful analysis carried out with correctness and transparency. However, we noted that some of our shareholders believed the value of the Tod’s group to be significantly higher than our valuation and preferred to remain in possession of their shares,” said Della Valle, sole director of DeVa Finance, last month.
The Tod’s brand has been rejuvenating its collections, reaching out to Gen Z, appointing digital entrepreneur Chiara Ferragni as a board member, focusing on digitalization and working on streamlining its wholesale distribution.
The strategy has been working as the company has been reporting growth in revenues and encouraging signs of a turnaround.
Group revenues in 2021 returned to hovering around pre-COVID-19 levels, driven by the acceleration of the Tod’s brand in the second half of the year and the strong growth of Roger Vivier.
The Italian luxury company posted a 16.4 percent increase in revenues to 724.9 million euros in the first nine months of 2022, putting it on track to meet the top-line consensus of a turnover of 974 million euros to 975 million euros for the year.