Ferragamo could assess strategic options, including sale - source
11 SEP 2018
Italian luxury goods group Salvatore Ferragamo [SFER:MI] could consider strategic options, including a potential delisting, according to a source close to the company. The group is also studying the potential disposal of some real estate assets.
The company, which is 67.7%-owned by the Ferragamo family, has been approached by several private equity funds, the source said. Sale talks with a large private equity firm are ongoing, he added.
However, a Ferragamo spokesperson denied that the company is considering such plans, and added that the family does not intend to sell, the spokesperson said.
Ferragamo’s board is likely to look at a number of strategic options at its upcoming meeting, the source said, adding that the company could come to a decision soon in light of its disappointing financial performance.
The next board meeting will take place at the beginning of October, but no strategic or other sale options will be on agenda, the spokesperson added.
Any potential changes to the company’s shareholder structure will only be possible six months after the completion of a 3.5% stake sale via an accelerated book-building process that was carried out in June, a person familiar with the situation said. The ABB was priced at EUR 23.25 per share, according to press reports.
Ferragamo needs to shore up its finances, the source said. In 1H18, Ferragamo’s revenues fell 6.2% compared to the same period last year, while EBITDA dropped about 14% over the same period.
As of 30 June 2018, the company reported a net cash position of EUR 101m. The value of property, plant and equipment assets, which include real estate, came in at EUR 254m.
Ferragamo expects 2018 sales and margins to be negatively impacted by currencies trend, “unfavourable retail channel mix” and “difficult wholesale environment”, according to a company’s press release.
Meanwhile, full-year results in 2017 saw revenues declining 3% and EBITDA slumping some 23%. This was anticipated by a profit warning issued in December 2017.
On a TTM EBITDA basis, the Italian company’s EBITDA level corresponds to a 24x EV/EBITDA multiple against peers such as Prada [1913:HKG], LMVH [EPA:MC], Hugo Boss [ETR:BOSS] and Richemont[SWX:CFR] pointing at an average of 13.5x, according to Dealreporter analytics.
Ferragamo is trading at EUR 20.16/share at 17:25 BST, for a market cap of EUR 3.4bn.
The company, which is 67.7%-owned by the Ferragamo family, has been approached by several private equity funds, the source said. Sale talks with a large private equity firm are ongoing, he added.
However, a Ferragamo spokesperson denied that the company is considering such plans, and added that the family does not intend to sell, the spokesperson said.
Ferragamo’s board is likely to look at a number of strategic options at its upcoming meeting, the source said, adding that the company could come to a decision soon in light of its disappointing financial performance.
The next board meeting will take place at the beginning of October, but no strategic or other sale options will be on agenda, the spokesperson added.
Any potential changes to the company’s shareholder structure will only be possible six months after the completion of a 3.5% stake sale via an accelerated book-building process that was carried out in June, a person familiar with the situation said. The ABB was priced at EUR 23.25 per share, according to press reports.
Ferragamo needs to shore up its finances, the source said. In 1H18, Ferragamo’s revenues fell 6.2% compared to the same period last year, while EBITDA dropped about 14% over the same period.
As of 30 June 2018, the company reported a net cash position of EUR 101m. The value of property, plant and equipment assets, which include real estate, came in at EUR 254m.
Ferragamo expects 2018 sales and margins to be negatively impacted by currencies trend, “unfavourable retail channel mix” and “difficult wholesale environment”, according to a company’s press release.
Meanwhile, full-year results in 2017 saw revenues declining 3% and EBITDA slumping some 23%. This was anticipated by a profit warning issued in December 2017.
On a TTM EBITDA basis, the Italian company’s EBITDA level corresponds to a 24x EV/EBITDA multiple against peers such as Prada [1913:HKG], LMVH [EPA:MC], Hugo Boss [ETR:BOSS] and Richemont[SWX:CFR] pointing at an average of 13.5x, according to Dealreporter analytics.
Ferragamo is trading at EUR 20.16/share at 17:25 BST, for a market cap of EUR 3.4bn.
Ferragamo shares price lost some 7% since the start of the year, averaging at EUR 22/share. The stock reached a peak of EUR 25.3 in mid-May.
In July 2018, Salvatore Ferragamo Chairman Ferruccio Ferragamo said that unnamed French companies had approached the Italian group, adding that the company’s family owners had rebuffed the approaches. At the time, it was understood that Ferragamo was referring to luxury goods companies LVMH and Kering [EPA:KER], according to a media report.
In November 2017, Italian media reported that the Ferragamo family had signed an agreement related to future control of the company. The item, which cited Ferruccio Ferragamo said that all 26 adult members of the family had signed the three-year agreement, which is focused on the third and fourth generation.
Such an agreement confirms that the CEO will always be external to the family and the family members that want to be involved in the business are subject to verification by the family board. At that time, Ferruccio Ferragamo was reported to have ruled out the option of selling the group.
In July 2018, Salvatore Ferragamo Chairman Ferruccio Ferragamo said that unnamed French companies had approached the Italian group, adding that the company’s family owners had rebuffed the approaches. At the time, it was understood that Ferragamo was referring to luxury goods companies LVMH and Kering [EPA:KER], according to a media report.
In November 2017, Italian media reported that the Ferragamo family had signed an agreement related to future control of the company. The item, which cited Ferruccio Ferragamo said that all 26 adult members of the family had signed the three-year agreement, which is focused on the third and fourth generation.
Such an agreement confirms that the CEO will always be external to the family and the family members that want to be involved in the business are subject to verification by the family board. At that time, Ferruccio Ferragamo was reported to have ruled out the option of selling the group.