Struggling Italian fashion company Tod’s is considering strengthening its partnership with luxury conglomerate LVMH, according to a senior executive from Tod’s. Although there are currently no ongoing discussions or decisions made, LVMH recently increased its stake in Tod’s to 10%, leading to speculation that it could potentially acquire the Italian brand in the future and assist in its revitalization. During a post-results conference call, Tod’s finance chief Emilio Macellari mentioned the possibility of further collaboration between the two companies, citing shared visions and potential cooperation in terms of operations and commercial activities. For example, sharing retail space in malls could be a way to collaborate. However, Macellari cautioned that nothing has been finalized or discussed with LVMH at this point.

Diego della Valle, Tod’s Chairman and founder, has been a board director at LVMH for the past twenty years and has a close relationship with Bernard Arnault, LVMH’s billionaire CEO, who has built his empire through strategic acquisitions. The recent increase in Tod’s first-quarter sales further supports the idea of a potential turnaround for the brand. Sales grew by 19% compared to the previous year when excluding currency fluctuations, driven by a remarkable 142% surge in China. China was one of the first regions impacted by the COVID-19 crisis but also one of the first to recover, reopening shops and easing travel restrictions. While revenue for the period exceeded analyst forecasts at €178.7 million ($215.76 million), it still falls short of the €216 million mark achieved in the first quarter of 2019. The Americas experienced a 15% decline in revenue, and Europe also saw a double-digit drop due to the implementation of new lockdown measures earlier this year.

Last year, Tod’s experienced a significant revenue drop of nearly one-third, making it one of the worst performers in the fashion sector. This decline marked the company’s fifth consecutive year of declining annual sales. However, recent developments have led to a surge in Tod’s share price, rising by 57% in just over a month. The acquisition of a stake by LVMH and the appointment of Italian influencer Chiara Ferragni to Tod’s board have contributed to this positive momentum. Ferragni’s appointment aims to attract younger customers to the brand. Macellari expressed confidence in meeting the consensus forecast of €741 million in sales for this year, representing a 16% increase from the previous year. He emphasized that achieving this target is completely feasible.

In conclusion, although there are currently no ongoing talks with LVMH, Tod’s sees potential for future collaboration with the luxury conglomerate. Tod’s recent rebound in sales, driven by its strong performance in China and its efforts to attract younger customers, has generated renewed optimism for the brand’s turnaround. As the fashion industry continues to recover from the impact of the COVID-19 pandemic, Tod’s aims to leverage its partnership with LVMH to drive its growth and regain its position as a leading luxury fashion brand.

Useful links:
1. Tod’s Official Website
2. LVMH Official Website