At last week's Pitti Filati some of us were shopping for yarns, others were shopping for brands. Just three days after the yarn fair it was indeed announced that the French luxury goods giant LVMH Moët Hennessy Louis Vuitton has bought 80% of Italian company Loro Piana.
On Monday LVMH paid 2 billion euros (around $2.6 billion) for an 80 percent stake in the Quarona-based company (enterprise value of 100% equating to EUR2.7bn). The family will retain the remaining 20% stake and Sergio and Pier Luigi Loro Piana, co-chief executives and great-great-grandchildren of founder Giacomo Loro Piana, will continue to run the company.
Officially founded in April 1924 by Pietro Loro Piana who opened a wool mill in Quarona Sesia, the origins of the merchant family behind the company can be dated back to 1812. Decade after decade the business produced high quality yarns and then fabrics in cashmere and fine wool, starting to export its products also on international markets in the mid-'40s.
In the '90s the company moved onto sports, mens and womenswear, producing luxury garments and selling them through a worldwide network of outlets, in carefully selected multi-brand retailers and on its own website, while continuing to manufacture its products including rare yarns and supplying high-end garment producers.
Historical family-run companies are turning into attractive targets for powerful fashion conglomerates: most of them have been nurtured with care, they have great knowledge, experience, and a vitally important traditional heritage that should be preserved; they produce unique designs following the highest standards and have their own clients.
Quite a few of such businesses encountered in more recent years financial problems due to the crisis and this prompted many owners to sell stakes or even the entire company. For these reasons, Italy has recently turned into a fertile land for shopping opportunities (the list of companies that passed to French owners is long and includes among the others Pucci, Gucci, Bulgari, Brioni and Pomellato).
A specialist in vicuna (a species that Loro Piana has made a fundamental contribution to save from extinction by reintroducing this rare animal fibre on the market in the early '90s), cashmere, baby cashmere, unusual fibres such as the lotus flower, and fine wools from merinos, Loro Piana is expected to achieve 2013 sales of 700 million euros, an official press release states.
For what regards the Loro Piana trends for the next Autumn/Winter 2014-15 season presented during Pitti Filati, the company is focusing on two points - luxury materials and a wide range of colours.
They have indeed created 250 shades of cashmere, offering buyers the opportunity to choose their favourite nuance among classic melanges, fluo colours or unusual effects created through printing (among the highlights for the next season there are the Supercashmere 2/52 and Top Cashmere 2/48 yarns, extremely soft and available in bright colours including shocking pink and lemon). The company also created a yarn called "Cashtech" ideal for innovative and technical knitwear, or for geometric and architectural motifs.
At the Pitti Filati stand Loro Piana offered in conjunction with Shima Seiki the opportunity for clients to speak to CAD technicians and see in real time how specific colours, effects and motifs could be created.
It will be interesting to see where the company will be in six months' time (will we see Louis Vuitton taking over the Loro Piana space at the Pitti Filati and will Loro Piana's know-how have an impact on other companies on the LVMH portfolio?) and if the investment by the French group will create new jobs in Italy.
While this operation was successful, the coffee wars between LVMH and Prada over the ownership of the Cova pastry shop continues. LVMH recently took a majority stake in Pasticceria Confetteria Cova Srl, owner of the Cova brand and of the Cova Montenapoleone Srl firm that manages Milan’s Cova pastry shop in Via Montenapoleone 8 (next door to the Prada shop), previously owned by the Faccioli family (who will continue to be a shareholder). The Prada Group has been interested in buying Cova for quite a while and is currently in a legal battle with the Faccioli family over the rights to the Cova brand. Looks like this deal may be less sweet than expected for LVMH...
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