Richemont Acquires Belgian Luxury Handbag Maker Delvaux
Richemont Acquires Belgian Luxury Handbag Maker Delvaux
(Bloomberg) -- Richemont has acquired Belgian leather-goods label Delvaux, adding a niche handbag maker to a lineup of luxury brands that includes Cartier and Dunhill.
Delvaux was controlled by Hong Kong billionaire brothers Victor and William Fung as well as Singapore’s Temasek Holdings Pte. The brand is known for bags like the $4,800-and-up Brilliant, which features a top handle and a buckle lock.
Richemont didn’t disclose terms of the transaction but said the deal will have “no material financial impact” on netthe Swiss firm’s assets or operating results. Shares in Richemont rose 0.8% in early trade in Zurich on Thursday.
The move is “consistent with Richemont’s desire to grow in the leather accessories segment,” according to Thomas Chauvet, an analyst at Citigroup, adding that the estimated cost of the deal could be as much as 250 million euros ($296 million).
A problem for Richemont remains soft luxury, where the company has underperformed for over a decade,” Chauvet said, referring to the segment that includes fashion and leather goods as opposed to jewelry.
Founded in 1829 by Charles Delvaux in Brussels, the brand was granted the title “Purveyor to the Court” in 1883, supplying leather goods to Belgium’s royals, according to its website. The Fung brothers acquired the stake together with Singaporean state investment company Temasek in a 2011 deal. Stanhope Capital advised the Fung brother’s First Heritage Brands for the sale of their stake in Delvaux.
“This transaction marks further consolidation in the luxury sector,” Pierre Mallevays, co-head of merchant banking at Stanhope Capital Group said in a separate statement.
Richemont said it will develop Delvaux’s global presence and digital capabilities. Annual sales of Delvaux amount to as much as 130 million euros, while operating losses represent up to 10 million euros, Citi’s Chauvet estimates.
Fashion news website Miss Tweed reported earlier this month that Richemont was in talks to buy Delvaux.
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