VALENTINO SAID TO BE EXPLORING A BUYBACK OF HOUSE FROM HDP
Byline: Samantha Conti
MILAN — It looks as if the house of Valentino has another suitor — and it might just be the designer himself. Well-placed industry sources here say Valentino and his longtime business partner, Giancarlo Giammetti, are talking to “several potential partners” about buying back the fashion house they sold to Italy’s Holding di Partecipazioni Industriali in 1998.
In a statement issued Tuesday, Giammetti denied “categorically any statements regarding his and Valentino Garavani’s intentions to buy back the brand.” The statement was issued in response to a report in the Italian financial press that the two were thinking about repurchasing the house.
An HdP spokeswoman said the company does not comment on rumors.
However, sources told WWD that Valentino’s and Giammetti’s idea is to buy back the company they founded 41 years ago, with help from a strategic or financial partner.
As reported in WWD last month, Gucci also appears to be interested in Valentino, but sources say it doesn’t want to buy GFT Net, the holding company for the Valentino and Joseph Abboud brands that also produces the Calvin Klein men’s wear collection under license.
While HdP has repeatedly denied that Valentino and GFT Net are even up for sale, industry sources say HdP wants to sell both companies as a package — at a price of approximately $450 million.
It’s no secret that fashion has become a burden for HdP, which now wants to focus on its more lucrative publishing division, Rizzoli Corriere della Sera, and HdP.net, the digital platform for the group’s multimedia projects and new initiatives.
It is unclear, though, whether Giammetti and Valentino view Gucci as a potential partner — or vice versa. The two would not comment further, and Gucci does not comment on speculation regarding acquisitions. Giammetti is friendly with Gucci creative director Tom Ford and made a front-row appearance at Ford’s Yves Saint Laurent show last month.
Much has changed at HdP since it purchased Valentino with great fanfare three years ago for $300 million — a price that was three times the direct sales of the fashion house, and one of the highest multiples the fashion business had seen to that point.
Back in 1998, HdP chief executive Maurizio Romiti’s master plan was to construct a luxury group around Valentino and the clothing manufacturer GFT, one that would rival LVMH Moet Hennessy Louis Vuitton.
At first, it seemed the sale of Valentino was a boon for everyone involved. Giammetti and Valentino pocketed millions — and were able to continue their daily routine without the hassles of running the business themselves.
In fall 1998, Giammetti told WWD he was thrilled to take a back seat and assume the title of honorary chairman.
“It’s an enormous relief not to be in charge anymore. I would sell this company a billion times over,” he said.
The professional paradise didn’t last long; in fact, there was trouble almost from the start. Roland Bohler, Valentino’s first chief executive and managing director under HdP management, left the company after just eight months on the job — having clashed repeatedly with Giammetti and Romiti over strategy.
“Bohler simply did not understand Valentino,” said Giammetti, with typical understatement, a few months after Bohler’s departure.
After Bohler left, it appeared Valentino was back on track. Under the guidance of Giammetti, Romiti — who is also vice chairman of Valentino — and Fabio Giombini, the managing director, the company launched new accessories and apparel collections, slashed licenses in a bid to improve the quality of the products, and began direct distribution of the apparel lines.
Just last month, Giammetti told WWD that he and Valentino were satisfied with the HdP management and happy with Romiti.
“We’re content, we work in peace and we feel like everything’s running smoothly,” he said. “We’re also happy about our sales.”
Last year, Valentino’s sales rose by 50 percent to $104.4 million, a result of the direct distribution of the apparel lines, a rise in Valentino boutique sales and the launch of the accessories line. Losses were estimated by sources to be $18.5 million last year, down from $22.2 million in 1999. The main reason for all the red ink is that HdP has been treating the Valentino purchase as a leveraged buyout.
Despite the upturn at Valentino, GFT Net still reported losses of $25.5 million last year — and the company’s future isn’t bright. GFT management has been scrambling to fill the holes left by the loss of the lucrative Giorgio Armani Le Collezioni licenses.
Sources say that even Calvin Klein, who is said to be talking to GFT Net about producing the CK men’s and women’s lines for Europe under license, is examining other options.
And while Romiti has denied that HdP’s fashion division is up for sale, he made it quite clear last month that fashion was no longer part of his grand plan for HdP.
“In life, you have to make choices, and that’s just what we’re doing,” he said in March. “Over the next three years, we are committing ourselves to the development of the editorial and communications sectors….We are simply pursuing the logical development of the group, and our aim is to create value for HdP and for its shareholders.”