On October 25th, the Italian luxury group Salvatore Ferragamo‘s board of directors approved the acquisition of minority stakes in three joint ventures that distribute the company’s products in the Greater China region for a total value of $42 million.
These three companies were co-founded by Salvatore Ferragamo and Chinese-Hong Kong entrepreneur Peter K.C. Woo. The equity involved in this acquisition includes 25% of Ferragamo Moda (Shanghai) Co. Limited and Ferrimag Limited, as well as 24.8% of Ferragamo Retail Macau. After the acquisition is completed, Salvatore Ferragamo and its subsidiary, Ferragamo (Hong Kong), will become the sole shareholders of these three joint ventures.
Salvatore Ferragamo stated that through this transaction, they aim to strengthen and relaunch their business in the Greater China region.
The minority stakes in the joint ventures are currently held by two subsidiaries of Peter K.C. Woo’s Hong Kong fashion retail company, Imaginex Holdings Limited and Imaginex Overseas Limited.
Woo was not involved in the approval of this transaction. He is the son-in-law of the late shipping magnate Pao Yue-Kong and currently serves as the chairman of the Fung Group. He has previously served as chairman of the Wharf Holdings and holds the Lane Crawford Joyce Group, a Hong Kong luxury retail group. He is also a board member and shareholder of Salvatore Ferragamo.
Leonardo Ferragamo, Chairman of Salvatore Ferragamo, stated that the acquisition “concludes an extraordinary path of alliance and development conducted, together with Woo, over the last 35 years, which has allowed the group to be among the first Italian luxury brands to establish itself in this important market.”
“(…) with the consolidation of the equity interests, having reached an efficient size and organization, we will be able, with increased intensity, to continue to strengthen our presence in these markets, continuing to count on the alliance of Peter Woo, who remains a shareholder and director of our company.”
Salvatore Ferragamo stated that an independent financial advisor was appointed by the committee responsible for assessing this acquisition, and the advisor confirmed the fairness of the price from a financial perspective.
The company stated that this transfer does not require authorization and is expected to take place on November 9th of this year, with the acquisition being paid in cash at the same time as the equity transfer.
Salvatore Ferragamo CEO and General Manager Marco Gobbetti added, “The conclusion of the transaction will strengthen Ferragamo’s presence in the Greater China area, one of the most relevant markets for the group, at a very important time for the brand’s relaunch.”
On October 25th, Salvatore Ferragamo’s stock price fell slightly by 0.17%, closing at €11.69 per share.
A few days before this news was released, Ferragamo had just announced its sales data for the first nine months of this year, which amounted to €844 million at constant exchange rates, down 9.2% compared to the same period last year. The Asia-Pacific region is its largest market, with net sales down 16.4% year-on-year to €263.92 million.
| Source: Official press release, The Wall Street Journal, Retail in Asia, Yahoo Finance
| Image Credit: Ferragamo official website
| Editor: LeZhi