Richemont in talks to sell Lancel
Luxury conglomerate Richemont is looking to sell troubled leather goods brand Lancel to Italian luxury briefcase maker Piquadro, in a move that would reorganize its fashion and accessories business while raising a bit of spare cash. The buyer said that it expects the acquisition to be concluded in the first half of this year. This isn’t Richemont’s first attempt at divesting Lancel. However, after a planned sale fell apart in 2013, the company decided to restructure it instead.
Richemont’s share price has risen by 17% over the past 12 months
SOURCE: Yahoo Finance
Analysts expect the sale to come with a price tag of about €130 million to €150 million. Exane BNP Paribas’ Luca Solca said that the brand could post an annual loss of “at least €40 million”, and regards the divestment as a “small positive” for Richemont. Kepler Cheuvreux’s Jon Cox agrees, saying: “It is a positive in terms of a renewed sense of urgency at Richemont.”
This sale follows on from a couple of big changes at Richmont over the past year or so. It sold Shanghai Tang last July, and has conducted a major reshuffle of management in an effort to inject some new energy into the business. Looking forward, the company’s focus will be on its traditional businesses – although it has also expressed an interest in Ecommerce with its recent bid for control of Yoox Net-A-Porter.
Dominion holds Richemont in its Global Trends Luxury Fund.
If you would you like to receive the Newsfeeds daily, please click here to sign up now!Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.