Following LVMH Moet Hennessy Louis Vuitton SA's agreement with Loro Piana SpA, Italian luxury corporations like Salvatore Ferragamo SpA and Tod's SpA were expected to pursue growth.
After LVMH's announcement of the US$2.6 billion deal, the stocks of Italian premium retailers climbed. Ferragamo and Yoox SpA closed at record highs. Brunello Cucinelli SpA and Tod's rose up to 4.5% and 2.8%. According to Equita Sim SpA, shoeemakers Ferragamo and Tod's were targeted for cash-laden firms.
Sanford C. Bernstein & Co said that due to the halt in LVMH and Gucci-owner Kering SA's progress, they would be the most active purchasers.
Bryan, Garnier & Co. added that Italian firms would finance growth by choosing buyers over the assistance from lenders.
"There's going to be a proliferation and an acceleration of buyouts in the luxury industry," Luxury Institute LLC's chief executive officer, Milton Pedraza, said through a phone interview. "They have high profit margins, but they need the capital to open stores all over the world and they need the expertise very often to globalize. The money is out there today and luxury is extremely attractive."
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