John Elkann, a descendant of the Agnelli family from Italy, is exploring a possible alliance with fashion designer Giorgio Armani, as part of plans to form a luxury conglomerate potentially anchored around Ferrari, five sources familiar with the matter told Reuters. told.
Alcan, who chairs Franco-Italian car conglomerate Stelantis, offered to buy a minority stake in the Milanese fashion house led by 87-year-old Giorgio Armani, but his latest offer was turned down earlier this month, two sources said, on condition But speaking of anonymity.
The deal would have established Agnelis as major players in the fashion industry, along with Arnaults and Pinaults in France.
Discussions with Armani – which are valued by analysts at around 6 billion euros ($7.09 billion) – did not proceed because of the designer’s reluctance, two sources said, adding that the talks were informal and no banks were involved.
A spokesman for Exor, the holding company of the Elkann and Agnelli family, said: “Exor has not made an approach and Exor has not made any offer (to Armani).”
Armani declined to comment.
A potential deal with Armani would have been worked out through investment firm Axor or Axor-controlled carmaker Ferrari – but Elkan’s latest offer was rejected, sources said.
“The discussion is dead for now,” said one of the sources.
The move reflects the efforts of the founders of Fiat Chrysler — who own 53 percent of Axor — to expand beyond the car industry and increase their exposure to the luxury market after a series of recent investments.
Axor took a 24 percent stake in Christian Louboutin in March, valuing the French brand, famous for its signature red lacquered sole stilettos, at 2.25 billion euros.
In June, it partnered with Hong Kong’s The World-Wide Investment Company to support mid-sized Italian companies focused on high-end consumer goods. Last year, it became the largest shareholder in Chinese luxury conglomerate Shang Xia, which was co-founded by France’s Hermes.
“If there’s anyone who can make a serious competitor to the French conglomerate, it’s Elcan,” said a banker familiar with their strategy.
“They have the money, credibility, and family reputation to make it happen.”
Speculation is rife about succession plans at the fashion house founded in 1975 by Armani, better known as King Giorgio.
The brand, which is renowned for its elegant suits and evening gowns, is expected to attract interest from French luxury companies LVMH and Kering, sources in the groups told Reuters, although they said Armani did not want to sell to a foreign conglomerate. .
Armani told Vogue magazine in April that he might consider joining forces with another Italian company, opening the door to a potential business partner for the first time.
He said the COVID-19 crisis “has opened our eyes to us a little bit.”
The Milanese fashion house, whose net revenue rose 2.3 percent to 2.16 billion euros in 2019 after a three-year decline, has yet to release its 2020 earnings.
A Milan analyst said the company is one of Italy’s trophy assets and that its valuation – which is nearly three times more than its sales – could reach 8 billion euros.
Armani, who has no children, set up a foundation in 2016 that would serve as a succession tool, preventing his business from being bought out or broken up after his death.
In June, after showcasing his latest menswear collection, he hinted at succession plans, saying he was charting his future with his closest collaborators.