“After four years of mutual cooperation, the joint owners have decided that, given the market environment and their respective time frames and objectives, it is in their and Desigual’s best interests that Thomas Meyer become the company’s sole shareholder,” Eurazeo said in a statement.
The sale will generate 141 million euros in net proceeds for Eurazeo and its investment partners, with Eurazeo’s stake representing 105.7 million euros, a 0.5 times return on its initial investment.
The group invested 285 million euros in the label known for brightly colored patterns and founded in 1984 by Meyer, who stepped back into the role as chief executive officer of the label a year after Eurazeo’s involvement.
At the time of Eurazeo’s investment in Desigual with an eye to speeding up the Spanish retailer’s presence in Europe, the U.S., Latin America and Japan, the transaction set the firm’s enterprise value at 3.7 billion euros.
In its statement, Eurazeo said it had supported the label’s strategic transformation with “the promotion of a new brand image, its digital channel, the expansion in Latin America, the optimization of the distribution network as well as through a strengthening of the company’s governance.”
Eurazeo’s investment came on the heels of a high-profile foray into Moncler, and executives said at the time that Desigual had seen a tenfold increase in revenues over the previous seven years.
But business at the brand has been declining, and the firm last month flagged a drop in sales across distribution channels. The stake was one of more than a dozen investments in the group’s Eurazeo Capital business, which includes Moncler and other non-fashion-related business.
Eurazeo’s stake in Moncler stands at 4.77 percent, and increased in value by 64 percent in the first half of the year.