Richemont in talks to sell Lancel to Italy's Piquadro in fashion revamp (updated)
13/03/2018 13:35
(Adds detail, background, analyst comment, share prices)
By Silke Koltrowitz
ZURICH, March 13 (Reuters) - Luxury goods group Richemont
CFR.S is in exclusive talks to sell its underperforming French
Lancel leather brand to Italian high-end briefcase maker
Piquadro PQ.MI , to put its struggling fashion and accessories
business back on track.
Piquadro said it expected the acquisition of Lancel to be
completed in the first half of 2018, subject to due diligence
and a final agreement. Richemont, better known for Cartier
jewellery and IWC watches, declined to comment.
Switzerland-based Richemont, which has reshuffled its
management to address problems at its watch brands, failed to
sell Lancel in 2013 and restructured it instead. urn:newsml:reuters.com:*:nL8N1NG0ZA
Its "Other" division, which also includes Montblanc pens,
Alfred Dunhill clothing and Chloe handbags, represents around 17
percent of group sales and has been struggling for years with
Dunhill and Lancel just recently returning to sales growth.
Analysts estimate Lancel sales at 130-150 million euros.
Exane BNP Parisbas' Luca Solca said he expected Lancel to
post an annual loss of "at least 40 million euros" and added the
divestment would be a small positive for Richemont.
Kepler Cheuvreux's Jon Cox said the business might be
breaking even now after the most recent turnaround attempts, but
he could not imagine a sales price multiple of more than one
times sales.
"It is a positive in terms of a renewed sense of urgency at
Richemont," Cox said, adding the focus would now shift to
Dunhill even though it was now showing signs of stabilisation.
For Bologna-based Piquadro with its 76 million euros in
annual sales and 99 boutiques, the acquisition of Lancel would
represent a major step after it acquired Tuscan leather goods
maker The Bridge at the end of 2016.
Shares in Piquadro were up 3.4 percent to 1.81 euros at 1330
GMT, while shares in Richemont were flat at 84.78 Swiss francs.
(Additional reporting by Silvia Recchimuzzi in Gdynia and
Giulia Segreti in Milan; editing by Jason Neely and Dasha
Afanasieva)
((silvia.recchimuzzi@thomsonreuters.com; +48 58 772 0920;))