Following the recent death of Giorgio Armani at age 91, his will has outlined a plan for the gradual sale of his fashion house or a public listing. The will instructs heirs to initially sell a 15% stake within 18 months, with the potential to increase this to up to 54.9% later. LVMH Moët Hennessy Louis Vuitton SE, EssilorLuxottica SA, and L’Oréal SA have been named as preferred buyers for this initial stake, or a company of similar stature. An initial public offering (IPO) is presented as an alternative for the second tranche of shares.
Armani representatives have already begun approaching potential buyers for a minority stake in the Italian fashion group, effectively commencing an auction for a portion of the company. L'Oréal is among the companies that have been approached, with Rothschild expected to advise on any potential transaction. The company, which analysts at Berenberg value at up to $8.2 billion, had been fiercely independent under Giorgio Armani's leadership for 50 years.
Analysts are divided on the most suitable buyer. Berenberg analysts favor LVMH due to its history as a supportive minority investor. However, Luca Solca from Bernstein suggests that L'Oréal or EssilorLuxottica, both licensees of Armani, might be better fits, arguing that ready-to-wear, Armani's core strength, is not LVMH's primary focus in the same way as leather goods.
