Permira, a prominent investment firm, has recently made a significant move by acquiring a majority stake in Gruppo Florence, a leading hub for Italian luxury clothing and leather goods manufacturers. The deal, valued at over 1 billion euros ($1.1 billion) according to insider sources, emphasizes a growing trend among private equity funds. These funds are now shifting their focus from purchasing established brands to investing in the luxury industry’s supply chain.

Established in 2020 by VAM Investments, a private equity firm led by former Bulgari CEO Francesco Trapani, Florence has quickly become a prominent player in the luxury manufacturing sector. Trapani will continue to be involved with Florence as chairman, along with Attila Kiss, the current CEO who will retain his position. In 2022, Florence’s revenues exceeded 600 million euros, an impressive feat for such a young entity. The hub consists of 26 companies that specialize in designing and manufacturing clothing, shoes, and accessories for renowned luxury brands.

As part of the acquisition, VAM Investments, the minority shareholders, and the management team of Florence are reinvesting a significant portion of the proceeds into the group, maintaining a significant stake. Fondo Italiano d’Investimento, a fund controlled by state investor CDP Equity, will also retain a minority holding. However, investment holding Italmobiliare will sell its stake in Florence, earning a substantial gain of 78 million euros.

Marco Piana, the CEO of VAM Investments, expressed his satisfaction with being involved in the creation of Italy’s largest platform for luxury supply chain operations. He sees it as a privilege and an exciting challenge. The transaction is expected to be finalized in the fourth quarter with the guidance of BoFA Securities, Citigroup, JPMorgan, and UniCredit.

Permira’s acquisition not only signifies private equity fund’s growing interest in the luxury industry’s supply chain but also suggests the potential for the further expansion and development of Florence as a central hub for Italian luxury suppliers. With Permira’s resources and expertise, Gruppo Florence is expected to strengthen its position as a key player in the luxury manufacturing sector. This move has the potential to contribute significantly to the growth of the Italian luxury industry as a whole.

Links:
1. “Luxury Industry Trends and Statistics”
2. “Private Equity Investment Strategies”