Powerhouse Moves: Kering’s Acquisition of Valentino and LVMH’s Unprecedented Olympic Sponsorship

Kering's Acquisition of Valentino

The Kering Group has recently made a move to acquire a 30 percent stake in Valentino, a renowned Italian Maison, for a sum of €1.7 billion in cash. This strategic acquisition is a part of Kering’s larger collaboration with the Qatari investment fund Mayhoola. This decision comes as Gucci, another brand within the Kering portfolio, faces a transformative year towards expansion. Gucci contributes to almost half of Kering’s revenues. During this period of transition, the company is undergoing significant changes in its management structure. Notably, Sabato De Sarno has taken over as the new creative director, succeeding the previous head Alessandro Michele, who had overseen the Italian label’s operations since 2015.

ABC News has reported that while Gucci is experiencing sales stagnation, Kering, on the other hand, has achieved €10.1 billion in revenues for the first half of the fiscal year 2023. This marks a two percent year-on-year increase, both as reported and on a comparable basis. As part of the acquisition deal, Kering holds the option to purchase the entirety of Valentino by the year 2028. In 2022, Valentino recorded revenues of €1.4 billion, possibly influenced by the consistent leadership of creative director Pierpaolo Piccoli, who has held the position since 2008. This acquisition announcement follows Kering Beauté’s acquisition of luxury fragrance house Creed from BlackRock Long Term Private Capital Europe. This strategic move is aimed at propelling the company’s future growth within the beauty industry.

Sabato De Sarno is set to make his first appearance at Gucci, showcasing the women’s Spring 2024 collection during the upcoming Milan Fashion Week in September. He also expressed satisfaction with the initial phase of their partnership with Mayhoola, aimed at fostering the growth of Valentino. Pinault emphasized the brand’s commitment to a robust strategic journey for brand elevation, which will be continued under the leadership of Jacopo Venturini.

Kering's Acquisition of Valentino

As Kering gets ready for a potential acquisition, LVMH is gearing up for a distinctive form of takeover. Bernard Arnault, head of LVMH, has unveiled plans to sponsor the 2024 Summer Olympics, marking an unprecedented deal. This arrangement involves a substantial payout of US$166 million (approximately €150 million), along with the inclusion of Chaumet medals and Moet Hennessy wine. The Summer 2024 games, hosted in Paris, the global fashion hub and home of haute couture, are anticipated to attract attention from sports enthusiasts and fashion aficionados worldwide. LVMH aims to capitalize on this opportunity to enhance brand awareness and forge potential connections through associations with athletes. Bernard Arnault fittingly describes this move as one that will significantly contribute to enhancing France’s global appeal.
LVMH’s approach goes beyond conventional product placement marketing strategies. The company is committed to playing a comprehensive role in the upcoming games, extending from the design of medals by renowned Parisian jeweler Chaumet to the creation of wines and spirits by Moet Hennessy, which will be served to guests. An official statement from LVMH emphasizes that leading up to the opening ceremony, brands like Louis Vuitton, Dior, and Berluti will also showcase various facets of their involvement. While the magnitude of this endeavor is unprecedented, LVMH has a history of sponsoring global sporting events. Given the immense value of streaming national sports, LVMH’s objective is to establish a presence within the realm of pop culture.
The Olympics are set to occur from July 26, 2024, to August 11, 2024. Despite initial concerns among Parisians about hosting the event due to worries about traffic and rising rents, Forbes highlights that the Olympics will undoubtedly contribute to the French economy by injecting money into it.