LVMH is increasing its stake in the Italian fashion company Tod's. The leather goods manufacturer is struggling financially and calls the move "friendly support".
Twenty years of friendship
The transaction strengthens "the twenty-year-old friendship between the Arnault and Della Valle families", Tod's said in a press release. The brand's founder and chairman, Diego Della Valle, has, in fact, also been a member of the LVMH board of directors since 2002.
The price LVMH has agreed to pay is 33.10 euros per share, 10 % less than the current share price. After the transaction, which is expected to happen on 28 April, Diego Della Valle himself will still hold 63.64 % of the shares.
Attempt at rejuvenation
LVMH, owned by French multimillionaire Bernard Arnault, already holds a 3.2 % stake in Tod's. Adding another 6.8 %, the luxury giant will own exactly 10 % of the shares. Reuters says the participation would remain at that level for the time being, although some rumours already speak of a takeover. The LVMH group, which already owns more than seventy brands, has just completed a takeover of the American jewellery chain Tiffany & Co and says it wants to focus on that for now.
Tod's has been hit harder by the Covid crisis than most of its competitors, with sales falling by almost a third last year, making it the fifth consecutive year of decline. However, the leather goods group, best known for its shoes, launched a new strategy at the end of 2017 to revamp the brand and attract younger consumers. Earlier this month, Italian influencer Chiara Ferragni joined the board of directors in an effort to rejuvenate the brand's image.