LVMH, the prominent French luxury goods conglomerate, is planning to raise its stake in Italian fashion company Tod’s to 10%, according to a statement released by Tod’s. This move is being seen as a gesture of “friendly support” for Tod’s, which has been facing challenges in the fiercely competitive fashion industry. LVMH will be acquiring a 6.8% stake from Tod’s founder and Chairman, Diego Della Valle. Currently, LVMH already holds a 3.2% stake in the company.

Tod’s, renowned for its luxurious leather goods, particularly its iconic loafer shoes, has been greatly impacted by the adverse effects of the COVID-19 pandemic. The company witnessed nearly a one-third decline in sales in 2020, marking the fifth consecutive year of dwindling annual sales. In an attempt to counter this downward trend, Tod’s introduced a new strategy in late 2017 to revive its brand and attract younger consumers. Unfortunately, the ongoing global health crisis has posed significant obstacles to these efforts.

Recently, Tod’s made headlines with the appointment of Italian influencer Chiara Ferragni to its board. This move was perceived as an effort to rejuvenate the brand’s image and led to a substantial surge in the company’s shares. Speculation in the market has suggested that Tod’s could potentially become a target for acquisition by a larger group. However, Della Valle, who has increased his stake in the company in recent years, has consistently denied these possibilities.

The increased stake by LVMH in Tod’s is considered a positive development for both organizations. It solidifies the longstanding friendship between the Arnault and Della Valle families. Della Valle expressed optimism about the future, stating that the increased stake may open doors for further collaboration between the two companies.

LVMH, led by French billionaire Bernard Arnault, possesses an extensive portfolio of more than 70 brands, acquired through strategic acquisitions. The group recently finalized a $15.8 billion takeover of American jeweler Tiffany. While there have been rumors about LVMH’s interest in Tod’s, the company has emphasized that its current focus is on integrating the Tiffany acquisition. Nonetheless, analysts have speculated that there may be potential for LVMH to further increase its stake in Tod’s.

The agreed price for LVMH’s stake purchase is €33.10 per share, representing a 10% discount to Tod’s share price. After the completion of the transaction on April 28, Della Valle will still retain ownership of 63.64% of Tod’s outstanding shares. Overall, LVMH’s increased stake in Tod’s serves as a clear demonstration of support for the struggling Italian fashion company, raising hope for its future success.

Useful links:
LVMH official website
Tod’s official website