Italian fashion house Etro to be acquired by LVMH

ITALY / FRANCE. Italian family fashion house Etro (€284m turnover in 2019) has signed a sale agreement with French-American private equity firm L Catterton (€30bn equity). L Catterton Europe, co-founded by Catterton, LVMH and the Arnault family's Financière Agache fund, will acquire a majority stake in its business by the end of 2021, while the Etro family will retain a significant minority stake. Gerolamo Etro, founder of the Milan-based company in 1968, will be appointed chairman of Etro.

"With over thirty years of experience partnering with luxury and fashion brands worldwide, L Catterton will help Etro enhance its brand strategy to broaden its customer base and reach younger generations of consumers by continuing to interpret its style in new and modern ways, while expanding into new areas and strengthening its Italian roots. This partnership will also allow Etro to strengthen its digital presence and foster its global expansion, with a focus on the important opportunity that Asia represents," said a statement issued by Etro on Sunday 18 July 2021. It did not give any figures on the percentages devolved to each entity. However, according to the Italian newspaper La Repubblica, the L Catterton fund will take 60% of Etro's capital and Gerolamo Etro's four children (Ippolito, Jacopo, Kean and Veronica), who currently control the family business, will each retain 10% of the shares. Furthermore, according to the daily, the Etro family would retain ownership of all real estate assets related to the group's business (headquarters and shops). This would value Etro (€50m of debt at the end of 2020) at around €500m.

"L Catterton has a vision that matches ours and a unique appreciation of our business. The company approaches the concept of partnership as our family. After nearly fifty-five years under our leadership, we believe that together with L Catterton, Etro can embark on its next chapter of growth and consolidate its place among the great sustainable luxury houses," emphasises Gerolamo Etro. "We are delighted to be working with the L Catterton team, which brings its in-depth knowledge of the fashion industry, as well as proven experience in supporting the international development of distinctive brands, enabling Etro to reach new heights," he continues.

Headquartered in Milan, Etro has some 140 shops and outlets in 58 countries, including Rome, Florence, Madrid, Barcelona, Paris, London, Munich, Vienna, New York, Beverly Hills, Miami, Chicago, Las Vegas, Beijing and Tokyo.