Qatar purchases Italian fashion house Valentino

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A Valentino flagship store in Bucharest, Romania. Photo – Romania-Insider.com

The Qatari royal family has bought iconic Italian fashion house Valentino for €700 million ($857.46 million), snapping one of the most prominent purchases it has made so far.

Valentino said Mayhoola for Investments SPC, which is backed by a leading Qatari investor, had acquired full ownership of Valentino Fashion Group SpA from London-based private equity fund Permira and Italian textile entrepreneurs Marzotto.

“The sale and purchase agreement between Mayhoola and Red & Black, a company indirectly controlled by the Permira Funds in partnership with the Marzotto family, was signed on 11th July 2012,” the firm said in a statement.

Permira did not disclose the identity of the Qatari bidder nor the value of the deal. But Reuters quoted two anonymous sources close to the deal as saying that the Quatari royal family had acquired Valentino in a deal that values it about €700 million euros.

Founded by designer Valentino Garavani, the Rome-based high-end fashion brand reached global heights thanks to its trademark bright-red chiffon dresses, worn by princesses and celebrity elite.

Perella Weinberg Partners was the adviser for the Qataris, while Mediobanca and UniCredit advised Valentino.

“We are delighted with this development,” Valentino chief executive Stefano Sassi said in a statement.

“During the past few years, despite swings in the luxury markets, the company has operated with great intensity and remained focused on maximising the potential of the Valentino brand.

“This effort should drive a 60-percent increase in revenues from 2009 to 2012. Our new shareholder will help us to reach our full potential.”

Valentino is the latest Italian luxury brand to be bought by a foreign investor. In December 2010, high-end menswear retailer Trinity Ltd bought Italian menswear brand Cerruti for $70 million.

In 2011, Dubai retailer Paris Group bought fashion house Gianfranco Ferre.

Owners of London’s Harrods department store, the Qataris have been one of the world’s most active investors with assets ranging from stakes in German sports car maker Porsche to shares in British bank Barclays.

Permira acquired 100% control of the Italian business Valentino Fashion Group in 2007 for around $3.87bn. It also has a controlling stake in the publicly-listed German company Hugo Boss. The combined group is held by an entity called Red & Black.

Hit by the financial crisis in December 2009, Valentino had to restructure its debt and Permira, together with the Marzottos, placed Hugo Boss, which has a market capitalisation of around €5.4 billion, in a separate entity.

Qatar has been cashing on its vast financial resources to buy so-called ‘trophy assets’, including top London departmental store Harrods for 2.32bn in 2010. Qatar Holding LLC announced last Tuesday its plans of opening Harrods-branded hotels in top cities around the world.

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