TheChek News Flow

Deal season is back. That’s the sentiment of many on Wall Street who expect Donald Trump’s re-election to trigger a new wave of merger activity. The changed political landscape could also see the rekindling of large Biden-era deals—featuring well known brands like Intel, Albertson’s and Tempur Sealy—that were blocked on antitrust grounds, or simply abandoned, as companies bet the time is ripe to try again.

The climate to resurrect stalled mergers (scroll down for our list of top 5) is more favorable in part because many predict Lina Khan, the current chair of the Federal Trade Commission and a noted antitrust hawk, will be out the door shortly. Trump is expected to turn to one of the two current Republican FTC commissioners to serve as an acting lead for the agency.

“With the replacement of Lina Khan, we will see some heavy M&A action kick off even before the Trump administration is sworn in. It will be an interesting time because people are ready to spend and innovate,” said Liz Miller, VP and principal analyst at Constellation Research.

Meanwhile, the Justice Department—the other agency that shares antitrust enforcement with the FTC—is likely to move away from recent rhetoric and policies that had a chilling effect on deals, according to industry insiders. “The Biden administration discouraged lots of transactions by just dragging out the review process and making it longer and expensive,” one industry insider said.

For context, Biden’s regulators in 2023 filed a record 50 enforcement actions to fix or block merger transactions. Many blamed Biden’s antitrust zeal with helping slowdown M&A. The number of U.S. announced mergers are running off 34% from 2021, when a record 15,582 deals totaled $2.5 billion [TRILLION RIGHT?] in value, according to data from Dealogic.

“The policies advocated by the FTC and the DOJ over the last four years have undoubtedly hampered deal activity and corporates’ willingness to forge into a transaction with the inability to gauge the likelihood of close,” said Michal Katz, head of investment and corporate banking at Mizuho Americas, a division of Mizuho Financial Group.

Big mergers back on the table?

One of the biggest deals that fell by the wayside due to regulatory interference was Nvidia’s $40 billion offer to buy Arm, which was announced in September 2020 while Trump was still in office. It was Biden’s FTC that sued to stop the chip merger in December 2021, leading Nvidia to call off the deal months later, in 2022. There is little chance that Nvidia will ever buy the chip designer now. Arm went public in fall 2023 and is currently worth about $145 billion.

Some deals still went forward despite regulatory opposition. Microsoft offered to buy video game developer Activision Blizzard in January 2022 for $68.7 billion. Despite an FTC lawsuit to stop the deal, a federal judge sided with the companies and let the merger go ahead, though the agency is currently appealing the decision.

While blocked deals involving giants like Nvidia made the headlines, Michael Sibarium, a partner at law firm Pillsbury Winthrop Shaw Pittman, says Biden’s antitrust policies also had a chilling impact on smaller deals. This was the case partly due to prolonged review processes that big businesses like Microsoft can better deal with, while smaller companies may lack the resources, Sibarium said. “If you are one of the wealthiest companies in the world, you can afford to fight if you want to fight. And you can make it go faster by hiring teams and teams of lawyers.”

Antitrust law under Trump won’t be out the window altogether. During the President-elect’s first term, regulators initiated a number of cases against Big Tech. It was Trump’s DOJ that filed an antitrust lawsuit against Google’s search monopoly, resulting in a landmark ruling against the company this year. Under Trump, regulators also sued Facebook over antitrust and called for a ban on TikTok.

Nearly everyone is expecting deals, including mergers and IPOs, to increase next year. Wall Street already has four years getting used to Trump, Mizuho’s Katz said. While it’s unclear which campaign promises he will keep, Trump is a “known unknown,” Katz said.

“We’ll see increased dealmaking activity in [IPOs and mergers] because the election uncertainty has been removed from the equation,” she said.

Fortune set out to discover which deals may get a second chance under Trump 2.0. One private equity executive who invests in tech said many companies “don’t want to be the guinea pig to try and see what can be approved [under Trump], especially if they have tried once before and failed.” For that reason, we have chosen not to include some deals that were emphatically rejected, like Adobe’s failed buy of Figma, or where companies have clearly signaled a merger is not on the table, such as with Cigna and Humana.

Here is our list of five super size deal that could get the green light in 2025:

In October 2022, Kroger agreed to buy Albertsons in a $24.6 billion grocery store merger that would combine two rivals in one of the biggest supermarket mergers in history. In February, the FTC sued to block the transaction, alleging the merger would lead to higher prices for groceries and other essential household items. Judges in three separate states—Oregon, Colorado and Washington—are reviewing the case, including one in Seattle who was expected to issue a decision on Nov. 15 but has since delayed. Kroger’s stock has gained about 4% since the Nov. 5 presidential election while Albertsons has increased by about 3%.

There were two possible Google/Alphabet deals this year. In one, Alphabet considered making a $25 billion offer to buy CRM provider HubSpot earlier this year, according to press reports. Negotiations didn’t get to the due diligence phase before Alphabet walked away. In the other, Google held discussions to buy cybersecurity firm Wiz for $23 billion before that deal dissolved. Either deal would’ve been Google’s biggest ever and both risked attracting antitrust scrutiny, which likely contributed to the decision to call off both. Under Trump, scrutiny could get less intense, opening the door for it to snap up Wix or Hubspot. Trump and the GOP, however, have cultural axes to grind with Big Tech, meaning Google could have a harder time than others. Shares of HubSpot, which beat third quarter estimates earlier in November, have rocketed 27% since Nov. 5. Wiz, meanwhile, has said it’s pursuing an IPO.

Qualcomm is said to have approached Intel in September about buying the slumping chipmaker. Qualcomm backed off the deal as it waited to see who won the U.S. presidential election, Bloomberg reported. A merger would likely draw intense scrutiny from antitrust regulators around the world, including the U.S. and China, the story said. Intel’s stock is up about 9% since the election. Intel declined comment.

Tempur Sealy, the world’s largest mattress supplier and maker, agreed to buy rival Mattress Firm for $4 billion in May 2023. In July, the FTC voted to block the deal, arguing that the Tempur Sealy will have the “ability and incentive to suppress competition and raise prices for mattresses for millions of consumers” once it buys Mattress Firm. In September, Tempur Sealy said it believed a “successful litigation process can be completed in the coming months” and expected the deal to close later in 2024 or early 2025. It also agreed to divest some Mattress Firm retail locations and its Sleep Outfitters subsidiary. Tempur Sealy filed a motion in October asking a Texas district court judge for a preliminary injunction that would stop the FTC’s administrative proceeding that is set to begin on Dec. 4. The FTC is also pursuing a federal court case to stop the merger, also in the southern district of Texas, that began on Nov. 11 and is ongoing. Shares of Tempur Sealy have gained more than 11% since the election.

The fate of Japan’s Nippon Steel’s nearly $15 billion buy of U.S. Steel, announced in 2023, is unclear. The Biden administration has said it would block it. The Committee on Foreign Investment in the United States, or CFIUS, was reviewing the deal but has yet to issue its final recommendation. The merger has faced significant opposition from Trump, and the United Steelworkers. Eiji Hashimoto, Nippon’s chairman and CEO, told Japanese weekly Shunkan Bunshun on Nov. 13 that he hasn’t ruled out suing the U.S. government if regulators block the acquisition. U.S. Steel’s stock has gained about 6% since Nov. 5 while ADRs for Nippon are up about 2%.

Tesla CEO Elon Musk, who is also co-head of the new Department of Government Efficiency that is advising President-elect Donald Trump, called out the F-35 stealth fighter on Sunday while endorsing drones over jets piloted by humans.

On his social media platform X, he reposted a video of synchronized drone swarms flying in elaborate formations and added, “Meanwhile, some idiots are still building manned fighter jets like the F-35.”

“We have combat capable aircraft in operation today and they perform exceptionally well against the threat for which they were designed. Pilots continually emphasize that this is the fighter they want to take to war if called upon,” a spokesman for the Pentagon’s joint program office said. “The air system’s international footprint amplifies the platform’s benefits, and it is the aircraft of choice for Partners and Allies. The program includes the U.S. Services, seven International Partners and 12 Foreign Military Sales customers, and FMS interest in the platform continues to grow. In the next 10 years, there will be 700 F-35s in Europe and only 60 of these will belong to the US.”

Lockheed Martin, which is the prime contractor, said the company will work with the new administration and backed the F-35’s capabilities.

“As we did in his first term, we look forward to a strong working relationship with President Trump, his team, and also with the new Congress to strengthen our national defense,” a company spokesperson said in a statement. “The F-35 is the most advanced, survivable and connected fighter aircraft in the world, a vital deterrent and the cornerstone of joint all-domain operations.”

To be sure, the Pentagon has been flying a range of drones for decades, including for surveillance missions and air strikes. And a concept for a future next-generation air dominance program includes a mix of manned and unmanned fighters.

But Silicon Valley defense startups like Anduril are also developing drones while looking to change how the Pentagon develops and buys weapons. In fact, Anduril’s executive chairman has reportedly consulted with Trump and his team about revamping the military.

Meanwhile, hundreds of F-35s are already in use in the U.S. military and among top allies around the world. Over its production cycle, the Pentagon plans to buy about 2,400 F-35s for the Air Force, Navy and Marine Corps, to replace aging, non-stealth fighters.

The Pentagon first awarded Lockheed the contract in 2001, but the program has been a perennial punching bag due to cost overruns, delays, and its enormous price tag.

After including the expenses to develop, manufacture, operate, and maintain its eventual fleet of F-35s over the fighter’s total service life, which could extend into 2088, the Defense Department estimates that the F-35 will cost $1.8 trillion, making it the Pentagon’s costliest weapons program.

A recently declassified report from the Defense Department’s weapons testing chief found that the F-35’s reliability, maintainability and availability are “below service expectations.” In response to that report, Lockheed has said the F-35 “consistently meets or exceeds the reliability performance requirements we are contracted to deliver.”

In a Wall Street Journal op-ed Wednesday laying out DOGE’s agenda, Musk and fellow co-head Vivek Ramaswamy didn’t highlight any weapons programs but noted the the Pentagon recently failed a seventh consecutive audit, “suggesting that the agency’s leadership has little idea how its annual budget of more than $800 billion is spent.”

Any changes to the defense budget and weapons procurement ultimately must go through Congress, and F-35 production is spread across various districts and subcontractors.

The lawyer founded Chanel’s long-term private law firm and drafted the contract of Karl Lagerfeld in 1982.

PARIS — Eliane Heilbronn, the matriarch of the family that owns Chanel, has died at the age of 99.

Her death was confirmed by Chanel in a statement on Sunday.

“Chanel is extremely sad to confirm the death of Madame Eliane Heilbronn. The family will hold a private funeral,” it said.

Details on funeral and memorial services could not immediately be learned.

Heilbronn is best known for her career in law, which saw her draft the contract of Karl Lagerfeld when he was hired as creative director of Chanel in 1982.

Born in 1925 to Denise and Louis-Raymond Fischer, an architect who later took part in the French Resistance, Eliane Fischer grew up in Paris. Her parents divorced in 1939.

When Germany invaded France the following year, she and her younger brother Robert first found refuge in the South of France with their mother, who had remarried, before heading to Mexico City, where their new stepfather Marcel Bloch, a businessmann, had grown up and still had family ties.

Once World War II was over, Eliane Fischer, as she was then known, returned to France to pursue a university education with an eye toward law.

In 1947, she married Jacques Wertheimer, the son of Bourjois and Chanel co-owner Pierre Wertheimer. The couple welcomed sons Alain in 1948 and Gérard in 1951.

Following her 1952 divorce, she married Didier Heilbronn, a lawyer. The couple had a son, Charles Heilbronn, who is now the head of the family office Mousse Partners. The family moved to New York City where her husband joined the Louis-Dreyfus merchant firm.

Then in her 30s, Eliane Heilbronn enrolled in the New York Law School and graduated in 1958 with a master of law. After returning to Paris, she joined the newly minted law firm of Samuel Pisar in 1962.

When her former husband Jacques Wertheimer was sidelined from Chanel in 1974, leaving her eldest son Alain in charge at the age of just 25, Heilbronn became one of his key advisers. The same year, she was sworn in as a member of the Paris bar.

The lawyer would subsequently cofound Salans Hertzfeld & Heilbronn, now known as Dentons, which became Chanel’s long-term private law firm. Over the decades, she drafted the contract of the French company’s top executives.

An elegant yet discreet figure, she was active well into her later years, going to her office in the tony 8th arrondissement until the COVID-19 pandemic, according to French media. On the law firm’s website, she still held the position of senior counsel, with a specialty in contract law as well as distribution and intellectual property law.

Heilbronn is survived by her three sons and eight grandchildren.

Buyer of 3 per cent of world’s coffee holds less than $200mn in fixed-price contracts, down from $1bn in 2019

Starbucks has slashed its use of hedges against coffee price shocks even as the price of beans has soared, raising concerns that it may be unusually exposed to market swings. 

The world’s largest café chain held less than $200mn worth of fixed-price contracts for so-called green, or unroasted, coffee at the end of its fiscal year in September, according to its newly filed annual report, down from $1bn as recently as 2019. 

The decline has occurred at a time when roasters confront supply deficits after persistently poor crops in major exporters such as Brazil. Benchmark coffee futures rose above $3 a pound in New York on Friday to a 13-year high, following a more than 70 per cent gain in the past 12 months. 

Starbucks buys 3 per cent of the world’s coffee to supply its 40,000 cafés and retail businesses. A team based in Lausanne, Switzerland manages purchasing high-quality arabica beans under a subsidiary named the Starbucks Coffee Trading Company. The decline in the value of its fixed-price contracts has attracted attention on Wall Street. 

“They are substantially less hedged than they used to be. It makes the next 12 months of coffee prices more important than they’ve ever been,” said Gregory Francfort, a restaurant analyst at Guggenheim Securities. 

New Starbucks chief executive Brian Niccol is in the the early stages of a plan to revive flagging sales at cafés. One of his goals is to restore its appeal as a community coffee house. “At Starbucks, coffee comes first,” he said in video remarks last month. 

The company is not alone among roasters in letting price-cover slip during an explosive market rally. Data from the US commodity futures regulator shows commercial traders have sharply reduced their contracts to buy arabica.

A coffee trader familiar with Starbucks’ operations says the majority of its purchases are made with so-called “price-to-be-fixed” contracts, which establish a quantity, delivery month and the amount of price premium to New York’s futures market. The final purchase price is agreed later.

“When a market rallies significantly and quickly, as coffee has done, the roasting community in general tends to let coverage decline,” the trader said.

Starbucks’ 56 “tier one” suppliers range from global commodities trading houses such as Louis Dreyfus and Olam to farmer co-operatives. The company in 2021 said it bought 800mn lbs of coffee annually — an amount that would cost $2.4bn at current benchmark prices. 

Starbucks had $1.1bn in green coffee purchase obligations on its books as of September, according to its annual report.

The company buys green coffee using two types of contracts: fixed-price and price-to-be-fixed, according to its annual report. For the latter, the company also uses derivatives contracts to insure against market gyrations. 

“Like others, right now we’re remaining agile in a very dynamic market,” Starbucks said in response to questions. “An example of that agility is that our current priced coverage is slightly lower than our typical range of 9-18 months.”  

Starbucks executives rarely discuss coffee hedging with Wall Street, but in 2021 — another period of furious price rises — then-CEO Kevin Johnson told analysts the company purchased 12 to 18 months in advance, and at the time had locked in prices for the next 14 months.

“We may be the only large buyer of green coffee that uses this approach, and that will serve us well as it gives us a significant advantage relative to our competitors who, if they don’t buy this far in advance, will certainly not have that cost structure that we put in place,” he said.

The value of Starbucks’ price-to-be-fixed contracts has fluctuated, ending the fiscal year in September at $929mn, according to the annual report.

That sum was more than a year ago, but well below levels of 2021 and 2022. Coffee derivatives contracts held by Starbucks were worth $154mn, the lowest September value since 2020. 

Starbucks’ coffee trading operation is headed by Andres Berron, an eight-year employee of the company, according to his LinkedIn page. The company declined to make him available for comment. 

Starbucks said its approach to purchasing coffee hasn’t changed. The company pointed out that its current stocks of physical coffee are a cushion against volatility in the spot market.

Inventories of unroasted and roasted beans combined were worth about $920mn as of September, according to the annual report, the lowest fiscal year-end figure since 2021. 

“We keep a healthy and ample green coffee inventory that outpaces other roasters,” Starbucks said. 

Global coffee production has been rocked by poor weather. The US Department of Agriculture last week cut its production forecast for Brazil, the top supplier, citing irregular rainfall and high temperatures that could depress its next harvest. 

“The global coffee market just can’t seem to catch a break,” said Kona Haque, a commodities analyst at ED&F Man in London. “Just when you think maybe this year we’re going to get a big crop and finally get back to a surplus and rebuild our stocks, you get another adverse-weather event in either Brazil or Vietnam, and things get tight again.” 

“Because markets now are tighter than usual, there is upward pressure on prices,” she added. “In a rising price environment, clearly you want to be hedged. You do not want to be exposed to rising spot prices.” 

Ukraine war pushes Europe into a race to build up its defence base

The focus on industrial capacity is vital but change must come as fast as possible to make a difference to European security

The Biden administration’s decision to let Ukraine conduct Atacms strikes inside Russia illustrates a reality of modern warfare: industrial capacity now shapes deterrence as powerfully as political will. As Washington creates a narrow window for Ukraine to employ American precision strike capabilities before January’s transition to a Trump presidency, European powers are racing to rebuild their defence industrial base for a more uncertain future.

Last month’s UK-German Trinity House Agreement underscores the trend. Their commitment to “rapidly develop brand-new extended deep strike weapons” represents more than military co-operation. It’s an acknowledgment that peacetime production models cannot meet the demands of sustained high-intensity conflict. When German defence minister Boris Pistorius speaks of “what these times require”, he’s articulating a new industrial imperative that could reshape Europe’s defence sector.

The timing is crucial. At roughly $1.3mn a pop, every American Atacms missile fired at North Korean positions in Kursk or Russian logistics nodes is a costly loss of capability irreplaceable until production lines adapt. As the US moves from Atacms to the Precision Strike Missile system, manufacturers must maintain legacy systems while ramping up next-generation capacity.

Such constraints force hard choices about immediate battlefield impact versus long-term deterrence requirements. Joe Biden’s protracted hesitation over Ukraine’s strike capabilities reflected this reality. In particular, Pentagon officials focused on how Nato’s decade of defence austerity had created vulnerabilities to Kremlin pressure.

Washington’s scepticism about European strategic autonomy has been well founded, given the EU’s fractured defence priorities amid rising far-right influence. Yet Brussels’ rollout of an unprecedented unified defence industrial strategy signals an emerging appetite for change.

Europe is starting to grasp that defence industrial capacity has become as crucial to diplomatic leverage as military heft. The Trinity House pact paves the way for a new artillery gun barrel factory in the UK, supporting 400 jobs and promising nearly £500mn in economic benefits. More significantly, it could reduce British and German reliance on US precision strike systems.

This industrial realignment comes as German Chancellor Olaf Scholz conducted his first conversation with Vladimir Putin in nearly two years. The timing — just weeks after the defence accord with Britain — shows how industrial capacity undergirds diplomatic engagement. European leaders are increasingly framing support for Ukraine in terms of sustainable production capability rather than immediate military aid.

In contrast to Washington, which is racing against a political calendar that could see sharp policy shifts under Donald Trump, European powers are building industrial capacity that can survive political transitions. A Franco-British-German alignment on precision strike capabilities is a hedge against potential changes in US strategic priorities.

For defence manufacturers, this creates opportunity and urgency. Storm Shadow missiles’ effectiveness against high-value targets in Crimea has confirmed the value of precision strike capabilities. Yet current production rates cannot sustain high-intensity operations while maintaining deterrent stockpiles. European defence firms must scale up production capacity at a pace not seen since the cold war.

The industrial shift goes beyond missiles. The Trinity House pact — with its extra focus on unmanned systems, underwater defence and integrated air capabilities — signals a deeper transformation of European defence manufacturing. Rheinmetall CEO Armin Papperger’s pledge to bolster UK defence technology leadership with German knowhow reflects the new approach.

The next six months will test whether this industrial mobilisation can meaningfully affect battlefield dynamics in Ukraine. As Putin and Kim Jong Un calculate their responses to expanded western strike capabilities, they’re betting against industrial capacity rather than military capability.

For investors and policymakers, the message is that European security will depend on industrial policy as much as military strategy. Along with Storm Shadow strikes in Ukraine, innovations in defence industrial co-operation suggest that European powers understand this. The question is whether their defence industrial base can adapt quickly enough to matter.

Giorgio Armani, the king of timeless elegance and founder of one of Italy’s last remaining independent fashion brands, denied on Friday that he was in talks to hire the French designer Hedi Slimane.

Slimane left Celine last month after more than doubling the French label’s sales to €2.5 billion – roughly the size of Armani’s fashion business. In the past few weeks, there has been speculation that Armani, who turned 90 in July, could be preparing to pass the design baton to Slimane.

Several industry sources said Slimane was looking to buy a flat in Milan and this fuelled rumors that he could be preparing to join Armani. Although Slimane’s record is strong and he is seen as a good fit, Armani denied it was talking to the French designer.

“These are unfounded rumors,” a spokeswoman for Armani told Miss Tweed in an email.

Several senior industry sources said this week they heard there had been talks between Slimane and Armani and this made sense.

Like Armani, Slimane’s fashion involves a lot of tailoring and black and white. No matter how talented Giorgio Armani may be and how popular his designs and shows, he is not immortal.

PRADA EXAMPLE

Some industry sources said it would be wise for the Italian couturier to prepare for the future in a way similar to Miuccia Prada. Four years ago, Prada stunned many in the industry when she hired Raf Simons to co-design Prada’s collections with her.

The duo has defied doubters who believed Miuccia Prada would struggle to work with another designer. The new ethos of co-design at the heart of Prada has been highly successful, helping Prada beat the industry’s worst downturn in recent history. Prada’s retail sales were up 4 percent in the nine months to Sept. 30.

Simons, 56, has given Miuccia Prada more freedom and mindspace to focus on the smaller sister brand Miu Miu and develop it with gusto. Every major brand has suffered a drop in sales this year but Miu Miu’s revenue was up 97 percent in the first nine months of the year. An impressive feat. Miuccia Prada, 75, is confident Prada’s creative direction will be in good hands when she decides to retire and leaves Simons in charge.

Miuccia Prada, Italy’s female fashion authority, could inspire Armani himself to consider hiring an experienced pair of hands, as she did, such as Slimane, to prepare for the day when he can no longer design and work.

CHANEL MISTAKE

Chanel’s owners, the Wertheimers, made the mistake of not looking for a proper replacement for many years before Karl Lagerfeld died in 2019. They opted for the easy solution of continuity by appointing his right-hand woman Virginie Viard as Chanel’s creative director instead of hunting for someone who could bring a strong new creative vision into the brand and keep it relevant.

Viard helped the French powerhouse muddle along and continue to grow sales, albeit more thanks to steep price increases in leathergoods than to higher volumes. Stepping into the big shoes of Lagerfeld, a visionary and a genius, was never going to be easy. It turned out Viard did not have that much to say from a cultural point of view and her last collections appeared out of sync with the times, fashion critics said. Last week, Miss Tweed was first to report that Bottega Veneta’s Matthieu Blazy, a Franco-Belgian designer with roots in Antwerp’s creative design cauldron, was the top contender to replace Viard. His appointment could be announced as early as next month.

Giorgio Armani may not want to repeat the Wertheimers’ strategic mistake and prepare for the future better. The designer has several people in-house whom he has trained to replace him should he keel over tomorrow. He regularly invites them to take a final bow at his side after his shows. However, he is not only a talented couturier but also a shrewd businessman.

He is one of the few people in this industry said to have “a right brain and a left brain,” in other words business acumen as well as fashion vision. This is rare. Normally, two different people embody such skills – the CEO and the designer. Armani has both. This dual talent enabled him to create a fashion juggernaut and conquer the world in spite of his humble origins in a provincial town outside Milan.

LOSS OF RELEVANCE

No doubt the nonagenarian knows that the day he is no longer in charge, and the brand continues to be designed by people in-house, it risks losing relevance over the years unless he finds a rare talent with a strong point of view.

Should the company be sold, Armani would be worth much more with a designer in place, ready to take it to the next level, than without a designated successor, which would create uncertainty about the company’s future. Slimane, who is 56, has a big fan club. Among his admirers was Lagerfeld. The late German designer liked to say he forced himself to lose 42 kilos to fit in Slimane’s tight-fitting suits after he started as creative director of Dior menswear in 2000, a job that would propel him to stardom and which he kept for seven years.

In an interview with Le Figaro in 2013, when Slimane was the creative director of Saint Laurent, Giorgio Armani had said he admired Slimane’s work. “Hedi is a poet,” he told the French daily. “But our business is measured in concrete terms, and obviously his Saint Laurent is selling very well,” he added. That’s important for the Italian couturier.

Every brand Slimane has worked for has seen its sales grow significantly. The French designer would make Giorgio Armani feel more relaxed about the future of the company he founded in 1975. Armani’s sales in 2023 totalled €2.44 billion, up6percent at constant exchange rates.

However, license revenues from products such its as perfume, cosmetics and eyewear were down, the company said,declining to provide precise details. Armani said this was a sign of weaker demand for accessible luxury. Armani also declined to disclose how bad the decline was in fashion sales in the first half of this year and in the second half of 2023. When the company released its 2023 and first-half statement for 2024 in July, it would only say that the decline was “in single digits” in percentage terms. However, its profitability last year remained stable, it said.

OPEN TO A DEAL

Armani said total brand turnover, with fashion revenues and including those generated by its licenses with L’Oréal and Luxottica, stood at about €4.5 billion in 2023-- a 2.6 percent decrease comparedwith2022. In its statement, the company pointed out that the total retail value of Armani-branded products worldwide stood at approximately €6.5 billion for 2023.

So, would Giorgio Armani be open to a possible deal?

For decades, the patriarch of Italian fashion flatly refused to countenance a merger or a sale of his company. However,this year, on the cusp of his 90th birthday, the billionaire tycoon, who started out as a window dresser in Milan department stores, told Bloomberg he “couldn't rule anything out.”

In his written interview with Bloomberg in April, the veteran couturier said that he “currently did not envisage a takeover by a large luxury conglomerate” but stressed that he did not “want to exclude anything a priori because that would be an ‘unentrepreneurial’ course of action.” Asked about a potential IPO, he said: “Listing is something we have not yet discussed, but it is an option that may be considered, hopefully in the distant future.”

Senior bankers in Milan say that, should Armani consider even selling a stake, “everyone” would be interested. That ranges from LVMH to Kering to Prada to Mayhoola, the Qatari investment fund that controls Valentino and Balmain. John Elkann, the Fiat scion behind family office Exor, has spoken at least twice with Armani about buying the company but talks,which started in 2021, never amounted to anything because of disagreements over prices, industry sources have said. Still, one veteran fashion executive in Milan who knows Armani well, says it is widely expected Elkann will want to try again to negotiate with Armani's heirs after the tycoon's death.

There is some speculation a foundation could lock up Armani's ownership once he dies, but bankers say they expect heirs will be able to make their own decisions once any lock-up expires, if there is one. Expectations are that the sale of Armani is likely to take place once Armani himself is no longer in the driver's seat. However,given he rules Armani as a dictatorship, bankers are all “at the window” ready to jump should the man suddenly decide, even in his waning months and years,that he would like to do a deal after all.

CORPORATE GOVERNANCE

Armani would benefit not only from new design blood, but also from clearer and more transparent corporate governance. The company is run by managing director Giuseppe Marsocci, to whom regional bosses and different Armani sub-brands report, and Daniele Ballestrazzi, who is finance director and chief operating officer.

Giorgio Armani likes to keep power split within his company. A spokeswoman would not disclose who was in charge of production, an important position within the company. She said: “There are no other management figures we are disclosing.”

On the board of Armani sit several members of the founder’s family, including Andrea Camerana, his nephew and John Elkann’s cousin via their grandmother. A potential deal with Elkann would allow Armani to“remain in the family,” industry sources said, and preserve its independence.

Camerana, who founded the Italian publishing house Pelledoca Editore, returned to work full-time for Armani in 2021 as sustainability managing director. Camerana had left in 2014 following a spat with management but he never left the board, on which he sits with Armani cousins Roberta and Silvana and his mother Rosanna.

Also on Armani’s board is Federico Marchetti, Yoox-Net-A-Porter (YNAP) former CEO and founder of Yoox. Giorgio Armani recruited him in 2020 to help craft the company’s digital strategy. Marchetti, who made tens of millions of euros by offloading his lossmaking company to Richemont, was once eyeing the CEO job at Armani.

He is no longer very involved with the company, several industry sources said. The YNAP disaster has not reflected particularly well on Marchetti, they said. Marchetti and Armani did not respond to requests for comment on that point.

Strange that Marchetti would have advised Armani on digital matters, since it is one of the few Italian brands of its size and importance that does not sell on online fashion retail websites such as Farfetch, or NAP or rival Mytheresa, which has just been promised a big cheque from Richemont once regulatory authorities clear its acquisition of YNAP. Armani, however, sells on the discount website Yoox, which Marchetti founded in 2000. Armani declined to confirm whether Yoox was still powering its e-commerce business and what would happen once the business belonged to rival Mytheresa.

Also on Armani’s board sits Leo Dell'Orco, a close associate of Armani who has worked for his company for more than four decades and is head of the men's styling department for the Giorgio Armani, Emporio Armani and Armani Exchange collections. Together with Marchetti, they are the only non-family board members.

REPUTATION SUFFERED

The Armani Group is run in a top-down, paternalistic fashion. The company provides jobs for life and is known for taking good care of its staff and business partners. However, like LVMH’s Dior, it is in dire need of tighter control over its supply chain. Armani and Dior’s reputations suffered this year after they were both busted by the Italian police for relying on underpaid Chinese immigrants to produce some of their expensive handbags. The police told the media that Chinese subcontractors were paid €93 for an Armani handbag, which the fashion house would sell for about €1,800 in its boutiques.

Italy’s last independent megabrands such as Armani, Prada Group, Zegna and Dolce & Gabbana all want to be king of their own patch and resent the fact that LVMH is much bigger and the French group and its archrival Kering have snapped up many big Italian brands in the past 20 years. Giorgio Armani may deny he is in talks with Slimane but he has not said his last word yet.

Dusty Springfield recorded the 1967 track for a seduction scene in ‘Casino Royale’

The comedian and filmmaker Mike Myers was on his way home from hockey practice in Los Angeles when “The Look of Love” came on the car radio. Myers’ British-born father, who had recently died, had always loved the scene in the spoof Bond movie Casino Royale featuring the song — Ursula Andress leading Peter Sellers through a luxury apartment to a sunken sofa, where she seduces him. Those three and a half minutes “just delighted my dad, because it was a combination of Sellers, James Bond and Burt Bacharach”, he recalled in 1997.

And in that flash of memory came a moment of inspiration: “I instantly felt the character and the movie of Austin Powers enter my brain.”

It’s entirely understandable. That Dusty Springfield recording of Burt Bacharach and Hal David’s song still summons a particular vision of the 1960s: one not of flower power and the Democratic convention in Chicago and the Soixante-Huitards, but of little red Alfas, cocktails at dusk, beautiful people in beautiful clothes doing beautiful things. Bacharach had written music that was intended to reflect Andress’s appeal: the music had to sound sexy, and what is sexier than bossa nova?

Though Bacharach was always the more high-profile of the pair, “The Look of Love” is elevated by David’s lyric, something that is apparent when you listen to the first recorded version, an instrumental by Stan Getz, from late in 1966. It’s beautiful and sophisticated, but without the tang David adds, it’s subtle and sensuous rather than indelible. The lyric was added at the last minute, for the movie, and it transforms the song: with words, the scene with Sellers and Andress makes perfect sense — it is itself a seduction.

David’s conceit is to use words to describe everything that is said without speaking: “The look of love is in your eyes”, “And what my heart has heard, it takes my breath away”, “I can hardly wait to hold you, feel my arms around you”. It’s a song that embraces sexiness without ever straying anywhere near raciness. It is perfectly judged.

According to Elvis Costello, its status as a standard means it should be considered the greatest Bond theme. “How many people are gonna get up there and say, ‘I’m gonna sing a standard now,’ and sing ‘Thunderball’? Nobody,” he said after Bacharach’s death. “But people are going to sing ‘The Look of Love’, and ‘The Look of Love’ is from Casino Royale, even if that’s the anomaly of the Bond films.”

This is the rare song where the creator’s own version is inessential. Bacharach’s recording, on his 1967 album Reach Out, is instrumental, and misses David’s lyric just as Getz’s did. The pair’s great muse, Dionne Warwick, sang it in 1969, taking it at a slower pace than Springfield had, with more insistent rhythm, and a sense of regret and pain. When she sings of wanting it to be “the first of many nights like this”, it seems more in hope than expectation.

The first big hit version, though, was by neither of those. It came from Sergio Mendes and Brasil ’66 — sung by Janis Hansen — and reached number four in the US after they performed at the 1968 Oscars. It’s brassy and over-egged, with backing vocals that date it instantly. As could sometimes be the case, Nina Simone sounds less desirous than faintly disapproving on her version. Andy Williams is processed white bread compared to Springfield’s sourdough.

Of the big cabaret stars who sang it, the most interesting version was Shirley Bassey’s, from 1972, which begins with stark wah-guitar and rattling cymbals, like the opening of The Beatles’ “Come Together”. It suggests that maybe we’ll be getting something in the stark vein of Ann Peebles’ “I Can’t Stand the Rain”, but then the strings get slathered on. The chorus leaps into storming R&B, and you can sense the record it might have been had someone had the foresight to do less. Certainly not doing less was Isaac Hayes, who turned it into 11 minutes of sinewy funk.

Great singers have continued to record excellent versions — Shelby Lynne, Diana Krall — but one of the most interesting journeys has been that of the 1969 recording by the guitarist Barney Kessel, part of the famed “Wrecking Crew” of LA session players. His version was sampled by the great underground hip-hop producer J Dilla on the track “Look of Love” by his rap group Slum Village. After Dilla’s death in 2006, the jazz pianist Robert Glasper took the sample used by Dilla and played it himself as part of “Dillalude No 2”, one of his tributes to Dilla. And the song came full circle: once again sounding like beautiful people in beautiful clothes doing beautiful things, generations later.