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French Luxury Group Kering to Buy 30% Stake in Valentino for 1.7 Billion Euros Cash 

Italian fashion designer Valentino, right, standing underneath the logo of his fashion house, answers the questions of a fashion reporter prior to the presentation of his Haute Couture Spring-Summer 2008 fashion collection, on Jan. 23, 2008, in Paris. (AP)
Italian fashion designer Valentino, right, standing underneath the logo of his fashion house, answers the questions of a fashion reporter prior to the presentation of his Haute Couture Spring-Summer 2008 fashion collection, on Jan. 23, 2008, in Paris. (AP)
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French Luxury Group Kering to Buy 30% Stake in Valentino for 1.7 Billion Euros Cash 

Italian fashion designer Valentino, right, standing underneath the logo of his fashion house, answers the questions of a fashion reporter prior to the presentation of his Haute Couture Spring-Summer 2008 fashion collection, on Jan. 23, 2008, in Paris. (AP)
Italian fashion designer Valentino, right, standing underneath the logo of his fashion house, answers the questions of a fashion reporter prior to the presentation of his Haute Couture Spring-Summer 2008 fashion collection, on Jan. 23, 2008, in Paris. (AP)

French luxury conglomerate Kering has reached a cash deal to purchase a 30% stake in Italian fashion house Valentino for 1.7 billion euros from a Qatari investment firm.

With the purchase, Kering is seeking to shore up its revenue stream as it struggles to turn around former powerhouse Gucci. Kering on Thursday reported first-half revenues of 10.1 billion euros, up 2%, as Gucci sales stagnate.

Under the deal announced Thursday, Kering has the option to buy 100% of Valentino no later than 2028. The partnership could lead to the Qatari investment firm, Mayhoola, becoming a shareholder in Kering, as well as other potential “joint opportunities,” the statement said.

Kering Chairman and CEO Francois-Henri Pinault expressed admiration for “the evolution of Valentino under Mayhoola ownership,” which Kering said turned Valentino “into one of the most admired luxury houses in the world.”

“I am very pleased of this first step in our collaboration with Mayhoola to develop Valentino and pursue the very strong strategic journey of brand elevation,” citing the role of Valentino CEO Jacopo Venturini, who “will continue to lead.”

Gucci, which accounts for nearly half of Kering revenues, is in the throes of a relaunch, with a new management team and a new creative director, Sabato De Sarno, who will unveil his first collection during Milan Fashion Week in September.

Valentino, founded by Valentino Garavani in 1960, recorded revenues of 1.4 billion euros in 2022. Pierpaolo Piccoli has been creative director at Valentino since 2008, working alongside Maria Grazia Chiuri from 2008-16.

With its corporate base in Milan and design studio in Rome, the fashion house is a mainstay of Paris fashion week with its womenswear and couture collections while recently returning menswear to Milan.

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Fashion

L'Oreal 2Q Sales Grow 5.3%, Slower than Forecast

The logo of French cosmetics group L'Oreal is seen on a company building in Paris, France, February 7, 2024. (Reuters)
The logo of French cosmetics group L'Oreal is seen on a company building in Paris, France, February 7, 2024. (Reuters)
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L'Oreal 2Q Sales Grow 5.3%, Slower than Forecast

The logo of French cosmetics group L'Oreal is seen on a company building in Paris, France, February 7, 2024. (Reuters)
The logo of French cosmetics group L'Oreal is seen on a company building in Paris, France, February 7, 2024. (Reuters)

French cosmetics giant L'Oreal reported a 5.3% rise in second-quarter sales, below expectations and likely further rattling investors already worried about the lack of rebound in the important Chinese market.

The Paris-based company, which owns the Maybelline and Lancome brands, said on Tuesday that sales in the quarter reached 10.88 billion euros ($11.75 billion), up 5.3% on a like-for-like basis from a year earlier, but undershooting the 5.9% growth seen in a consensus compiled by Visible Alpha.

The company reported negative growth in the North Asia region, hit by weak consumer confidence in China and compared with the strong surge in demand at the same time a year ago.

L'Oreal CEO Nicolas Hieronimus had said last month that the global beauty market was growing more slowly than earlier predicted, at about 4.5%-5%, largely due to a lack of rebound in the Chinese market.

Shoppers in China, which has been one of the world's fastest growing beauty markets, are cutting back on spending over worries about job insecurity and a prolonged real estate slump.

The world's No. 2 economy grew less than expected in the second quarter, prompting consumers to buy fewer creams and lipsticks, both online and in stores.

L'Oreal, whose products span the mass market to the high-end luxury segment, had been expected to outpace its peers, but still see the impact of broadly slower growth.

Its sales in North Asia, which come mostly from mainland China, were down 2.4% like-for-like, compared with a decline of 1.1% in the first quarter.

"In mainland China, the beauty market was negative in the second quarter on a tough comparison base, exacerbated by lasting low consumer confidence," said the company in a statement.

Luxury bellwether LVMH last week said its perfumes and cosmetics sales grew 4% in the second quarter, slowing from 7% in the first three months of the year.

Shares in L'Oreal, Europe's 6th most valuable listed company, with a market capitalization of about 211 billion euros, have lost 12% so far this year, compared to a 31% fall at US peer Estee Lauder.