Armani Stake Sale Talks Begin with LVMH, L'Oreal

Giorgio Armani's will has triggered active discussions over the sale of a 15% stake in his fashion empire. The company is now in early talks with French luxury giant LVMH, beauty products maker L'Oreal, and eyewear group EssilorLuxottica, the three groups named as preferred buyers in the founder's testament.

Giorgio Armani stipulated that an initial 15 per cent stake in the business should be sold between 12 and 18 months after his death. The founder, who died aged 91 in September last year, left open the possibility of bringing in other investors of comparable standing. His will also stated that after this initial sale, either a larger holding should be disposed of or a stock market listing should occur. The luxury giant remained privately controlled throughout Armani's lifetime.

CEO confirms talks underway, no decision yet

Chief Executive Giuseppe Marsocci confirmed the discussions at the Giorgio Armani fashion show in Milan on Sunday. Marsocci, who took over as CEO last October, stressed that the process is still in its early stages. "No decision had yet been made," he said. He added that any transaction would ultimately depend on reaching agreement on price and other terms.

Marsocci clarified that the 15 per cent holding could potentially be split between more than one investor. "It is not written in stone that it has to be one investor," he said. The CEO declined to comment on whether Armani had been approached by investors other than those named in the will. He stated the fashion house intends to respect the timetable set out by Giorgio Armani.

Joint bid and alternative paths under discussion

One option discussed informally would see LVMH, L’Oréal and EssilorLuxottica jointly take the 15 per cent holding. Earlier reports indicated EssilorLuxottica could consider partnering with other bidders for a potential joint offer. If negotiations with these groups fail, a stock market listing remains an alternative path for the company, as outlined in Armani's will.

Business context: valuation, performance and market pressures

The company is weighing a deal to sell a 15% stake to some of Europe's biggest luxury groups. In its most recent financial year, Armani recorded sales of €2.2bn, a figure down 2.8 per cent from the previous period. The company held around €500m in net cash.

Analysts have provided a range of valuations for the privately held business, while deal talks suggest a higher figure.

The company intends to follow the timetable laid out by its founder Giorgio Armani for the stake sale.