L Capital Asia, the Singapore-based private equity arm of LVMH Moët Hennessy Louis Vuitton, has acquired a 51 percent majority stake in Dondup.
The agreement was signed on Monday between L Capital Asia and Massimo Berloni, Dondup’s founder, who will remain the president of the Italian fashion company. The operation is valued at about 20 million euros, or $23 million at current exchange rate.
The European arm of L Capital, which bought a 40 percent stake in the label in 2009, retains its investment in Dondup. Carlo Morfini has been named chief executive officer, while Berloni’s wife, Manuela Mariotti, keeps the post of creative director of both Dondup men’s and women’s lines. Established as a premium denim label, Dondup currently offers complete ready-to-wear collections.
“L Capital Asia is the right partner to boost the brand’s growth in the international markets,” said L Capital Advisory ceo Andrea Ottaviano, who explained that in the last few years the company succeeded in consolidating its business in Italy during a very difficult economic period for the country.
“This operation represents the end of a path we defined five years ago with Andrea [Ottaviano],” Berloni said. “Thinking about Dondup as a company which needs to grow, I believe it became necessary to introduce it into a more professional process. We had the chance to do this earlier, but we thought the priority was to overcome the problem of the Italian market.”
Dondup, which closed 2014 with revenues of about 51 million euros, or $62.22 million at average exchange, and an earnings before interest, taxes, depreciation and amortization of about 20 percent, currently generates 70 percent of its sales in Italy. There, the company operates a flagship in Milan and another unit in Fossombrone, where the fashion house is based. Dondup’s collections are currently sold in 1,391 multibrand stores worldwide.
“The goal is to bring the Italian and international business to the same level within three years,” said Morfini, who earlier worked for brands such as Marni, Tod’s and Borbonese before being appointed director of Swiss food start-up Alice Allison.
Morfini said that L Capital Asia’s investment will also help Dondup expand its retail presence — five flagships will be opened within the next three years, as well as about 20 “more commercial” doors operated in collaboration with partners.
Morfini pointed at Europe, along with the Middle and Far East, as the most appealing markets for the label, but also expressed the company’s interest in introducing Dondup’s collections in the United States.