Golden Goose

MILAN — Golden Goose and its new owner Permira have big plans ahead.

The private equity fund on Wednesday succeeded in buying Golden Goose from the Carlyle Europe Buyout fund, as first reported by WWD. Although terms of the transaction were not made public, market sources peg the price tag at 1.28 billion euros.

Now the work begins to continue to grow Golden Goose — which Marco De Benedetti, managing director and co-head of Carlyle’s European Buyout Group, said “has the potential to become a 500 million euro company; it has interesting prospects.”

An upbeat chief executive officer Silvio Campara said “this was only the beginning“ for Golden Goose and that there is “still so much to do.”

Campara will continue to lead the company and touted continuity, as Permira is “perfectly in sync, has experience in fashion, is not improvising and has an international mind-set while also rooted in Italian culture.”

The closing is expected in about a month, he said.

The goal is to continue to grow steadily at a 25 percent clip, opening 25 stores a year. Last year the company shifted into a direct-to-consumer business, which now accounts for 53 percent of sales, observed Campara.

Italy represents 20 percent of the business. The other markets are balanced, with the U.S. accounting for 35 percent, as much as Europe, and Asia representing 30 percent.

Asked about the coronavirus crisis, which did not stop the deal, Campara expressed his solidarity with the Chinese community and said that China accounts for 10 percent of sales. He noted that Golden Goose relies on local customers around the world, so that the virus has so far had a lesser impact than for some competitors, also because Golden Goose products are made in Italy and not affected by problems at the level of the supply chain.

Campara also trumpeted the current management’s reinvestment in the company, including his own, as he remains one of the main shareholders. “This is an Italian miracle. It’s a company made up of people, a collective of creative talents and managers, which guarantees continuity and success,” he trumpeted. “Let’s celebrate ourselves, this is all five times unique, in terms of the size of the deal — these multiple haven’t been seen in a while here, in terms of the affection of the team; unique in terms of the product and how it is crafted, and for the passion and love, all aimed at bringing forward the Golden Goose story.”

Francesco Pascalizi, partner at Permira, said, “Golden Goose is a ‘next-gen’ luxury brand and can be considered the ‘creator’ of the high-end sneakers category. Over recent years the company has experienced outstanding growth, driven by its excellent management team. We look forward to leveraging our experience to support Golden Goose through the next phase of development.”

While admitting the deal was successful on the financial front, De Benedetti underscored in an interview with WWD the importance of leaving a company in better shape than it was before. “I have always considered that we can have a role in accompanying the transformation of a company. I am happy that we have contributed to developing Golden Goose, choosing the right management, the strategies, expanding its retail distribution.”

Asked about the timing of the turnaround and sale, which was quick considering that Carlyle bought the brand in 2017, De Benedetti said that the decision was reached at the end of last year, since “the goals we had set had been reached. Our role was finished. We made a selection of a group of potential buyers that would understand the sector and appreciate the value of the company and that had the skills to bring the company forward. Permira has these characteristics. And they were the most determined and made the most competitive offer.”

Carlyle acquired the Marghera, Italy-based company in 2017 from Ergon Capital Partners and Zignago Holding SpA, controlled by the Marzotto family, as well as the company’s founders and management team.

Ergon acquired a majority stake in Golden Goose in 2015. Style Capital held a minority stake in the Italian brand, which was founded by creative directors Alessandro Gallo and Francesca Rinaldo.

Revenues almost doubled since the acquisition of Golden Goose by Carlyle in 2017, from 100 million euros in the 2016 fiscal year. When it was acquired, Golden Goose was valued at 420 million euros, with EBITDA of 32 million euros.

Golden Goose achieved much of its success with the Superstar sneaker, which offers 400 variations in one year. The brand prides itself on keeping its products handmade in Italy and offers customization through the Lab project.

Carlyle lists successful investments in brands including Moncler, Twinset and Hunkmöller.

Permira bought Dr. Martens in a 300-million-pound deal in 2014, and is not new to the fashion fray, as a former investor in Valentino and Hugo Boss.

As reported last month, market sources told WWD that negotiations over Golden Goose had accelerated and a sale could have been finalized as early as mid-February. Two private equity funds — Permira and Advent — were said to be neck-and-neck in securing the deal to buy the Italian brand from the owner, the Carlyle Europe Buyout fund.

As reported in November, sources told WWD that a “teaser dossier” had been presented to potential bidders and that seven to eight companies had shown some interest. These ranged from PVH Corp. and Permira to Advent and Ralph Lauren Corp. Tapestry Inc., parent of Coach, Kate Spade and Stuart Weitzman, was also said to have expressed an interest in Golden Goose.

The deal implies Permira paid more than 14 times the company’s expected 2019 earnings before interest, taxes and depreciation.

Figures for 2019 have not been released yet, but revenues last year are expected to reach $300 million, up from $205 million in 2018. EBITDA is forecast to reach around $90 million in 2019, an increase from $51 million the previous year. According to a source, the plan is to reach sales of $510 million and EBITDA of around $160 million in 2022.

Sneakers are Golden Goose’s core business and account for around 80 percent of sales, but Golden Goose has been expanding its accessories and ready-to-wear. The women’s division accounts for 70 percent of sales. The company has also been boosting its proprietary online channel, which is expected to account for 10 to 15 percent of sales in two or three years, and building a network of stores. Since March 2017, the company has opened 50 stores, reaching a total of 58 last year, and the brand is available at around 900 wholesale accounts. Wholesale represents 60 percent of revenues.

The brand is helmed by Campara and the role of chairman is held by Patrizio di Marco. The collections are designed by an in-house team, but, as reported, former Gucci creative director Frida Giannini is said to have joined Golden Goose to work on the brand’s accessories and apparel. This is an encore for Giannini and her husband di Marco, as the couple worked together at Gucci, when the executive was that brand’s chairman and ceo before Marco Bizzarri.