The Italian fashion house Giorgio Armani SpA should sell a 15 percent stake to the French luxury goods group LVMH, the Franco-Italian eyewear group EssilorLuxottica, the French beauty and cosmetics group L’Oréal, or another luxury group in the next 12 to 18 months, the designer Giorgio Armani has stipulated in his will.
The German bank Berenberg believes that “LVMH would likely be the most interested, of the three, in a stake, were it to become available, given the strategic fit.”
Armani, who died on Sept. 4 at the age of 91, said that while priority should be given to an eventual sale to LVMH, EssilorLuxottica or L’Oreal, the stake could also be sold to other companies or groups “in the world of fashion and luxury that are of equal standing with the groups indicated above and with priority given to groups with which the company already has a partnership relationship.”
Armani asks his heirs to sell more stakes
The designer added in his will that the decision on the buyer of the stake should be made in accordance with Pantaleo Dell’Orco, Armani’s partner and long-term collaborator. Armani’s will assigned the Armani Foundation full ownership rights in the fashion house through F-category shares totalling 9.9 percent (with 30 percent of voting rights) and usufruct rights on the remaining 90 percent. Dell’Orco was given usufruct rights on a 30 percent stake, equivalent to 40 percent of voting rights. Should Dell’Orco no longer be alive, Armani added in the will that the decision on the stake should be made in agreement with Silvana Armani and Andrea Camerana, his niece and nephew.
In a detailed plan on the future of the fashion house contained in the will, Armani indicated that the 15 percent stake is only a first tranche to be sold.
The designer asks his heirs to proceed within three to five years with the sale of a further stake of 30 to 54.9 percent in the company to the initial purchaser of the 15 percent stake.
Listing of Giorgio Armani SpA as an alternative option
However, should the sale to a luxury goods group not go through for some reason, Armani left the door open for a listing of the fashion house’s shares on the stock market, either the Italian market or another “of equal standing”. This would happen should Dell’Orco and either his nephew or niece ask the foundation to proceed with this option within three years, but “in any case” within five years or a maximum of eight years.
The will also indicated that the designer has left 40 percent of the roughly 2 percent stake his company owns in EssilorLuxottica to Dell’Orco, with the remaining 60 percent left to his family members. The tally excludes 100,000 EssilorLuxottica shares bequeathed to Michele Morselli and 7,500 shares each assigned to four other individuals.
