Richemont sells luxury leather bagmaker Lancel to Piquadro (updated)
04/06/2018 07:37
(Adds details, comments from analysts and company)
ZURICH, June 4 (Reuters) - Richemont CFR.S has completed
the sale of its struggling French leather bag maker Lancel to
Italian high-end briefcase maker Piquadro PQ.MI in a profit
share deal, the luxury goods maker said on Monday.
Richemont, the owner of Cartier jewellery as well as watch
brands including Piaget and IWC, said the deal would have no
material impact on its balance sheet, cash flow or results for
year ending 31 March 2019.
Under the arrangement Richemont will get a share of the
profits earned by Lancel over the next 10 years, up to a maximum
of 35 million euros ($40.89 million).
The deal is the latest by Richemont, which has been
reshaping parts of its portfolio in recent months, to move out
of so-called soft luxury areas like fashion and increase its
presence in the online sector.
"The disposal of Lancel makes sense," said Jon Cox, an
analyst at Kepler Cheuvreux. "Richemont couldn't get it to
work."
On Friday, Richemont said it was buying Watchfinder.co.uk,
an online platform for pre-owned watches. urn:newsml:reuters.com:*:nL5N1T3540
The company has also completed the take of Yoox Net-a-Porter
YNAP.MI , the online fashion retailer it originally spun off in
2015. urn:newsml:reuters.com:*:nFWN1SV12E
Richemont had been in talks with Bologna-based Piquadro
since March to sell Lancel, which was founded in 1876, but has
struggled in recent years. urn:newsml:reuters.com:*:nL8N1QV3QV
For the fiscal year ended March 31, Lancel made a loss of 23
million euros from sales of around 53 million euros, Piquadro
said.
Still, Piquadro Chief Executive Marco Palmieri contends the
brand offered "great potential for growth."
"This acquisition is part of a strategy of bringing together
accessory brands that we began about a year ago with the
acquisition of the historic Florentine leather goods brand The
Bridge, a strategy that we intend to pursue with a view to
generating greater and greater synergies," he said in a
statement.
Luca Solca, an analyst at Exane BNP Paribas, said the deal
was a small positive for Richemont, showing it was getting to
grips with the loss-making "other divisions" which also include
pen maker Montblanc and French fashion house Chloe.
"Richemont had acquired the Maison Lancel brand back in 1997
for 270 million euros, but it struggled to grow it," Solca said.
($1 = 0.8559 euros)
(Reporting by John Revill, editing by John Miller)
((John.Revill@thomsonreuters.com; +41 58306 7022; Reuters
Messaging: john.revill.thomsonreuters.com@reuters.net))