Private equity for Valentino

The Valentino Fashion Group, which owns labels like Valentino and Hugo Boss, has sold 29.9 percent of the company to the British private equity group, Permira Advisors. This is the biggest ever buyout in the European luxury goods sector by a private investor, valuing at a whopping $3.5 billion.

Interestingly, this is Permira's first foray into high fashion, which holds such disparate concerns as mass-market retailer New Look, the tea brand Tetley and Parker pens!

This acquisition comes close on the heel of several other luxury companies that have sold a large percentage of their shares to private investors. While TowerBrook Capital Partners took over the shoe company Jimmy Choo in February 2007, Change Capital Partners purchased Jil Sander a year earlier.

As profits for luxury companies continue to rise globally, this will probably become something of a trend for major luxury houses, but I'm not entirely sure a majority stake is a good thing. Corporatisation is not necessarily the best thing for creativity. More so luxury.

Source: International Herald Tribune