LVMH Invests More in Italian Shoemaker Tod’s

LVMH Invests More in Italian Shoemaker Tod’s

The luxury French fashion house LVMH increased up to 10% the shareholding held in Italian shoemaker Tod’s in April 2021. Through this transaction, the twenty-year partnership between the Arnault (LVMH) and Della Valle families (Tod’s) is reinforced. Consequently, the stock rose as much as 50%, bringing the company’s market value to about 1,9 billion euros ($2,36 billion).

Shoppers have turned away from the Italian shoemaker, by which Tod’s has struggled during crisis due to its over reliance on European markets. The European market represented more than 44% of its revenue in the first quarter of 2021. Therefore, LVMH’s investment is fueling speculation that the troubled Italian luxury company may become a takeover target. By contrast, the Paris-based LVMH and Hermes have shown more resilience during the pandemic.

In the first quarter of 2021, consolidated sales were 178.7 million euros, up 17% from the first quarter of 2020. Also due to the strategic decision not to place too many products on the market, to protect the prestige of the brands, revenues for the current year are still 16.3% lower than in the first quarter of 2019, at constant exchange rates. The pandemic affected the sales results of all the group’s brands, in all geographic areas, product categories and on both distribution channels.

Twenty-year friendship

“The friendship with Diego Della Valle and his family goes back over 20 years, a relationship cemented by common human and professional values. We are very happy to reinforce further this partnership,” LVMH CEO Bernard Arnault said in the statement.

“I am delighted by this transaction which consolidates the friendship between myself, my family, Bernard and his family, that lasts longer than 20 years now. We share the values of luxury, quality and products appeal. This may represent an excellent reason to consider further opportunities to be taken in the future ahead,” Tod’s CEO Diego Della Valle said in the statement.

Tod's Stock Chart
Tod’s Stock Chart