Valentino in exclusive sale talks with Qatar

Reuters: London-based private equity fund Permira is in exclusive talks with the Qatari royal family over the sale of Italian fashion house Valentino and a decision is expected by the end of the month, four sources close to the talks said.

The Qataris, who also own London’s Harrods department store, have been one of the world’s most active investors with assets ranging from stakes in German sports car maker Porsche to shares in British bank Barclays.

British media reported the deal could be valued at around 550 million pounds.

Besides owning the Valentino lines, VFG makes clothes under licence for sporty lines MCS Marlboro Classics and M Missoni. The group also owns a minority stake in the U.S. brand Proenza Schouler.

In March, Qatar Holding bought a 1.03 percent stake in luxury conglomerate LVMH.

A sale of the entire Permira stake in Valentino would however be the first acquisition of a top fashion house by the Qatari family, where the wife of the Emir, Sheikha Mozah, is known for loving Valentino dresses.In a statement on Monday, Valentino confirmed it was in talks with a potential buyer but did not disclose its identity.

“As previously stated, Valentino has seen increasing interest from a number of potential buyers,” Valentino’s Chief Executive Stefano Sassi said in an emailed statement on Monday.

“In this context, an exclusivity has been granted to one of the potential buyers, who expressed interest in the long term potential of the brand, and it is expected to expire in July,” he said. Valentino said no deal had yet been reached.

Given the luxury sector’s resilience to financial crises, fashion brands with strong appeal have often attracted cash-rich investors looking for worldwide recognition and financial reward.

In December 2010, high-end menswear retailer Trinity Ltd bought Italian menswear brand Cerruti for $70 million. In 2011, Dubai retailer Paris Group bought distressed fashion house Gianfranco Ferre.

In 2011, Valentino reported revenues of 322.4 million euros, driven by targeting new customers in Asia and the United States, and partly from selling accessories, such as shoes and perfumes, which are more affordable than the high-end gowns worn by Hollywood stars on the red carpet. Earnings before interest, tax, depreciation and amortisation rose 300 percent in 2011 to 22.2 million euros, and are on track to grow significantly again in 2012, a person familiar with the situation said.

In March, Qatar’s sovereign wealth fund announced plans to take the Harrods brand global to cities such as Paris and New York.

Qatar Holding bought the famous London department store in 2010 from Egyptian-born businessman Mohamed al-Fayed in a deal reported to be worth around 1.5 billion pounds.