Anya Hindmarch's Bags That Work.

LONDON — With one of its earliest investments, Anya Hindmarch, sold to the Marandi family, Mayhoola for Investments’ passion for fashion may be cooling.

Multiple industry sources have indicated the secretive Qatari investment group that owns Valentino, Balmain and Pal Zileri could be looking to distance itself from the luxury arena despite its runaway success with Valentino and its ambitions to build Balmain.

Having worked with Anya Hindmarch Ltd., Mayhoola principals would have learned the industry can be brutal for small, high-end independent brands. Competition is fierce, market share is always under threat and these businesses need a pipeline of money to grow. Fashion is one long, and very expensive, play.

While Mayhoola has been successful so far with Valentino and Balmain, building the Anya Hindmarch business proved challenging, and the company does not appear to be gaining any traction with Pal Zileri, the Italian men’s wear company, which it acquired in 2016 as part of a buying spree. While some sources said Mayhoola had been eyeing Etro has a possible takeover candidate, as reported, the Etro family has firmly said it is not interested in selling.

Besides, as one well-placed industry source told WWD, “I would be surprised if Mayhoola is looking at acquiring other brands right now. They are reconsidering their position on fashion and everything, including Valentino, is under consideration.”

Mayhoola principals do not comment on their investments, but other industry sources would concur.

Valentino Yorkdale - Toronto, ON

Inside the Valentino Yorkdale store.  Michael Muraz

“Mayhoola is now at an important crossroads,” said another source, who requested anonymity. “It is looking at either exiting the fashion business or, on the other hand, at further investing in it. But it needs to build a structure. Either way, it will take time.”

The source contended that Mayhoola “is not really a group in the same way Kering or LVMH Moët Hennessy Louis Vuitton are. It works as a cluster of different investments in a range of industries, from finance to luxury lodging.”

According to the source, Mayhoola principals have come to realize there is a lack of structure across the investments, and in particular across the luxury brands. “At Kering or LVMH, there is a common m.o. across all brands, managers and staff. You even see executives moving from one label to another within the same group. This would never happen within Mayhoola,” the source believes.

Speculation has been rife for a while that Valentino chief executive officer Stefano Sassi could rise through the ranks and supervise all of the Mayhoola fashion brands, given his unofficial involvement in labels including Balmain and Pal Zileri. Observers point to Massimo Piombini’s appointment as ceo of Balmain in 2017. Piombini is a loyal alumnus of the Sassi school, having previously served as worldwide commercial director of Valentino.

Models wear creations as part of the Valentino ready to wear Fall-Winter 2019-2020 collection, that was presented in ParisFashion 2019 F/W Valentino, Paris, France - 03 Mar 2019

Looks from Valentino’s fall 2019 rtw collection.  Francois Mori/AP/REX/Shutterstock

While Piombini has been successful, thanks also to creative director Olivier Rousteing’s designs and social media reach, Pal Zileri has been plagued by a revolving door of ceos. Last July, Pal Zileri ushered in a new ceo, Marco Sanavia to succeed Giovanni Mannucci, who in turn had succeeded Paolo Roviera.

Sanavia had held the role of director of human resources at Mayhoola. Sources say Mayhoola is pleased with Pal Zileri creative director Rocco Iannone’s work, but that more funds need to be channeled into the brand to grow it.

“Mayhoola needs someone who can map out long-term strategies,” contended one source.

The challenges of growing a brand can be seen in Mayhoola’s investment in Anya Hindmarch, the quirky British accessories label with a cult following. After seven years, Mayhoola called time on the investment, selling its majority stake in the business to Narmina and Javad Marandi, whose investments include luxury, British design-led brands such as Soho Farmhouse and Emilia Wickstead.

In a joint statement on Thursday, Mayhoola and Anya Hindmarch said that Hindmarch would continue in her role as creative director and will remain a member of the board.

The terms of the deal were not disclosed.

Hindmarch thanked Mayhoola for its “tremendous support, advice and input over the past seven years. They have been instrumental in building Anya Hindmarch into a strong, creative brand, and we move into this new chapter with great momentum, thanks to their commitment and vision.”

The Iranian-born Javad Marandi is a highly regarded businessman and property developer with a home in London. A chartered accountant and former Coca-Cola and Philip Morris International executive, Marandi eventually started his own investment business.

The family is known for their love of art and design, and Marandi is chairman of the advisory board of The Watercolour World, a charity aimed at creating a free, online database of watercolors painted before 1900. Prince Charles and the Duchess of Cornwall are joint patrons of the charity.

Narmina Marandi is a member of the British Fashion Council’s Fashion Trust, a charitable initiative that raises money and gives grants and support to fashion designers.

“We are passionate about British design, and Anya Hindmarch is one of the most exciting and creative brands in the industry. We are delighted to be partnering with her and her team,” the family said Thursday.

The sale to the Marandi family comes a few weeks after Hindmarch and Mayhoola confirmed that they were parting ways.

Their split followed a retail and product rollout that saw Hindmarch expand in the U.S., Asia-Pacific and the Middle East and into the home category. It also came on the heels of a restructuring that saw the English firm pare losses and boost profits despite a string of management changes.

Four different chief executives have run Anya Hindmarch since 2012, when Mayhoola first took its stake in the company. The 2012 deal valued the business at 70 million pounds.

According to industry sources, the decision to split was mutual. “It was a natural time to explore options,” said a source familiar with both parties. “Profits have materially improved, the company is in good health and work on the cost and revenue side has been completed.”

Antoine Bejui, the former chief financial officer of Balmain, was named ceo of Anya Hindmarch Ltd. last year, following Mayhoola’s most recent investment of 16 million pounds into the brand.

As reported last October, sales fell and losses widened at Anya Hindmarch in the 12 months to Dec. 31, 2017. Turnover was down 10 percent to 37.2 million pounds, while pretax losses more than doubled to 28.2 million pounds, compared with the previous year, according to numbers filed at Companies House, the latest register of U.K. businesses.

In 2017, the company closed eight of its smaller stores and concessions in the U.K. and Japan, including ones at House of Fraser and Harvey Nichols. Anya Hindmarch has 33 points of sale, including flagships, concessions and franchises across the U.K., the U.S. and Asia.

Last year saw a strategy shift for the business, which decided to forgo fashion shows in favor of consumer-facing presentations, events and projects, plus a see-now, buy-now strategy.

“We are making tough decisions to ensure the business is best placed for the fast-changing consumer environment. Now, more than ever, we are focused on finding new and creative ways to engage with our customers,” said Hindmarch when she revealed her decision to leave the London catwalk in 2017.

Last year, the company introduced a home fragrance collection called Anya Hindmarch Smells with license partner United Perfumes and created a line of accessories dedicated to the mobile phone, including cross-body straps, wristlets, stickers and charms.

The business has long been creative and forward-thinking but in the current climate, creativity and the ability to think ahead are not enough. High-end independent accessories brands are getting squeezed from both ends of the market.

At the very top, there are the well-funded, international juggernauts such as Louis Vuitton, Chanel and Gucci, while brands such as Fendi, Dior and Loewe have become formidable forces, reviving iconic designs such as the Baguette or the Saddle Bag, or creating new styles such as the Puzzle.

Celine and Mulberry are building on an already strong offer, while Burberry is determined to make it big in luxury accessories. JW Anderson is also pushing branded handbags to the fore while Hussein Chalayan launched his first collection of bags and accessories for fall 2019.

There is also pressure from the premium or “affordable luxury” end of the market, with new brands gaining traction and putting increased pressure on the smaller luxury brands.

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