MILAN — Roberto Cavalli’s new owners, led by Clessidra SGR, have a long-term goal: an initial public offering.
But first, the Italian private equity fund, which with partners has signed an agreement to acquire 90 percent of the Florence-based firm, sees plenty of opportunity to grow the brand. “This is a brand that has a lot of potential with a strong image. There are areas that we can still greatly develop,” said Francesco Trapani, who is taking on the role of chairman of the firm. “It has a good women’s ready-to-wear business that can improve and adjacent categories that are underdeveloped, such as men’s, bags, shoes and accessories. There are big opportunities. Also, geographically, the brand is well-covered in Europe and the U.S., partially in the Middle East and is practically absent in Asia. It is positioned in various market segments and we have no intention of upturning this or the prices, and we will continue to develop them.”
In addition to the signature brand, the group includes the young casual Just Cavalli, the bridge line Cavalli Class, the Roberto Cavalli junior line and a home collection and a hospitality sector through its network of Cavalli Clubs and Cavalli Cafés.
Asked if the fund was considering an IPO of the company, Trapani said: “Yes, the Bourse is a possible solution, but not in the short-term. This is a long-term project,” pointing to such an eventuality in five years.
Renato Semerari has been named chief executive officer, confirming a WWD fashion scoop this week. Peter Dundas was appointed creative director of the brand in March.
Semerari was previously president of Coty Group, and prior to that, was ceo of Guerlain and president and ceo of Sephora Europe. Coty is Cavalli’s fragrance licensee.
Asked about Semerari, who previously was at Coty in Europe, Trapani said he’s personally known him for 25 years. “He is at a very high [ceo] level, one step above all the others. He’s managed situations that were much more complex and bigger and he has an international experience. I am fully confident in him, he is an excellent strategist and executor with a great ability to build relations, which in this industry is very important.”
Regarding Dundas, he said, “Peter has a super consolidated experience, he is creative at different levels, and is a great communicator,” an added asset. “He is very close to Cavalli’s style, he likes it and is not far from its DNA. He feels at home.” This is a return to the fashion house for Dundas, who worked at Cavalli before taking the top job at Emilio Pucci.
The deal was completed after months of negotiations. International investment firm L-GAM and Chow Tai Fook Enterprises Ltd. (CTF), a holding company controlled by the Cheng family, are co-investors in the company. Cavalli will retain a 10 percent stake. Financial details were not disclosed, but market sources estimate that the brand was purchased for between 380 million euros and 400 million euros, or $419 million and $441 million at current exchange.
“I am extremely satisfied to have signed this agreement with an Italian partner which, I am sure, will further develop what I have built in a lifetime,” said Cavalli, who founded the firm in the Seventies. “Clessidra will provide financial, managerial and human resources that will allow the company to grow further and face the challenges of the ever-evolving luxury market.”
“We really wanted to reach this agreement as we strongly believe in the potential of Roberto Cavalli,” Trapani said. “It is a company with a unique style, unparalleled market positioning and a truly global awareness. Cavalli’s brand identity is an asset that we want to preserve, a key factor on which we will found all the company’s plans for international growth.”
The deal is to be completed by a newly established company called Varenne, controlled by Clessidra but including L-GAM and Chow Tai Fook Enterprises Ltd.
The Cavalli deal is the first operation carried out through the third managed fund, Clessidra Capital Partners 3 (CCP 3), which is dedicated to investments in the Italian market.
Trapani is also Clessidra’s executive vice chairman. He held the role of ceo of Bulgari for more than 25 years, then becoming ceo of the watch and jewelry division at LVMH Moët Hennessy Louis Vuitton, which took control of the Italian jeweler in 2011.
The agreement revealed Thursday ends the long-running saga of Cavalli searching for an investor. Clessidra was in talks with Cavalli as far back as 2009 and, at the time, the designer was in discussions to sell a 30 percent stake in his firm, but a deal fell through over price. Before that, in 2006, Cavalli seemed close to selling to Saudi Arabian private equity fund SAB Capital, which submitted a bid for 60 percent of his business, but the designer pulled out of the talks.
Cavalli went back on the hunt for an investor in 2014 and private equity fund Permira was interested in acquiring the entire company but, again, talks broke down over valuation.
Bahrain-based Investcorp, a former Gucci owner, was also said to be looking at the company.
Cavalli last year also negotiated for months with the Russian firm VTB Capital, with a deal initially expected to close in the fall, but, in a surprising turn of events, the designer started talks with Clessidra in December. VTB Capital is part of VTB Group, a major Russian investment bank, but sources said it was acting for a Cyprus-based fund.