May 13, 2021
Tod's sees possible venture with LVMH, but no talks ongoing
May 13, 2021
Struggling Italian fashion company Tod’s could further strengthen its ties with LVMH but there are no ongoing talks and no decision has been made, a top Tod’s executive said after the French giant increased its stake in the group.
Last month’s announcement that industry leader LVMH would raise its holding in Tod’s to 10% has fuelled market talk it could help relaunch the Italian brand and eventually take it over.
Tod’s finance chief Emilio Macellari told analysts in a post-results conference call the two groups “spoke the same language” and could co-operate further, both from an industrial and commercial point of view, citing for example the possibility of sharing space in shopping malls.
“It is a reasonable possibility that something in the future can be done together,” he said. But, seeking to dampen expectations that any announcement may be imminent, he added: “There is nothing already decided or discussed with LVMH.”
Tod’s Chairman and founder Diego della Valle has been an LVMH board director for the past two decades and is a friend of LVMH’s billionaire boss Bernard Arnault, who has built his empire through a string of acquisitions.
Tod’s reported a rebound in first-quarter sales, which grew by 19% from a year earlier when stripping out currency fluctuations and were powered by a 142% jump in China - the first region to be hit by the coronavirus crisis but also the first to re-open shops and relax travel curbs.
Overall revenue for the period came in at 178.7 million euros ($215.76 million) slightly above analyst forecasts of 168 million euros, but still below the 216 million euros mark reached in the first quarter of 2019.
Revenue fell 15% in the Americas and also posted a double-digit decline in Europe, where new lockdowns were imposed in the first part of this year.
Last year, the fallout from the pandemic triggered a revenue fall of almost a third for Tod’s, one of the worst performances in the sector, marking the fifth year in a row of falling annual sales for the group known for its loafer shoes.
However, shares in the group have rallied to rise 57% in just over a month, boosted by news of the LVMH stake acquisition and also by news that Italian influencer Chiara Ferragni would join the board - a move which Macellari said was also meant to help Tod’s lure younger customers.
Macellari said the group was confident it would meet a consensus forecast for 741 million euros in sales this year, which would be 16% higher than last year.
“It’s totally feasible,” he said.
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