Compagnie Financière Richemont expands its portfolio beyond hard luxury and acquires Belgian elite leather goods company Delvaux from its Chinese owners.
Richemont said it bought 100 percent of Delvaux “in a private transaction” and did not name the seller: First Heritage Brands, a vehicle of Hong Kong billionaires brothers Victor and William Fung, who have already left their other European fashion investments, Sonia Rykiel and shoemaker Robert Clergerie .
Financial terms were not disclosed.
In a statement released after the close of trading on the SIX Swiss Exchange, Richemont said it would “position Delvaux to its next stage of development by enabling Delvaux to leverage the Group’s global presence and digital capabilities to develop its omnichannel opportunities and customer engagement. ”
Philippe Fortunato, CEO of Richmont’s fashion and accessories magazines, paid tribute to Delvaux’s “strong legacy, distinctive savoir-faire and unique production capacity.”
“The house’s rich archives and creative momentum over the past 10 years form a solid foundation from which the company can grow in the long term, strengthening Richmont’s presence at the top of the leather goods category,” he added.
Founded in 1829, Delvaux is considered the oldest luxury leather goods house in the world, the first to patent leather handbags in 1908 and one of the first luxury goods companies to introduce seasonality to its collections in the 1930s. It has been an official supplier to the Kingdom of Belgium since 1883 and boasts a meticulous archive of more than 3,000 styles, all patented.
In a statement, Richemont said the acquisition of Delvaux would have “no significant economic impact on Richemont’s consolidated net assets or operating profit” for the fiscal year ended March 31, 2022, noting that Delvaux’s results would be grouped under the area ” other business “.
First Heritage Brands acquired a majority stake in Delvaux in 2011 with Singaporean state-owned investment firm Temasek, growing sales from 18 million euros to around 120 million euros, according to market sources.
The brand pushed into China, South Korea and Japan and opened flagships on New York’s Fifth Avenue, Bond Street in London and in Palazzo Reina in Milan, as well as a pop-up on Rue Saint-Honoré in Paris with plans for a permanent store there. The share of sales generated outside Belgium increased from 3 percent to around 85 percent, while the store network increased from 10 to 50 under the ownership of First Heritage Brands.
The Delvaux disposal represents one of the last remaining fashion assets affiliated with Fung Group, the Hong Kong-based sourcing giant. In 2017, it sold its stake in the men’s fighting clothing unit Trinity – which includes Gieves & Hawkes, Kent & Curwen and Cerruti 1881 – to Shandong Ruyi.
Over the years, the spread of the Li & Fung empire began to take its course, with CEO Spencer Fung explaining to investors not long after he took over the reins of the company that he realized the company had many business departments, but none that were particularly unusual. He soon began streamlining the company for sourcing and logistics. But as the company began to turn around, pressure in the supply chain only accelerated, and this coincided with the transformation of the retail landscape. Many of Li & Fung’s biggest customers were sunset retailers struggling to adapt as the next generation of DTC and omnichannel retail concepts arrived on the scene.
Meanwhile, its brand management and license utilization Global Brands Group has also been exposed to problems. In mid-June, Hong Kong’s listed group reported that its liabilities exceeded its assets by $ 899 million. The company has aggressively cut costs and cut off its assets, revealing that it would use the proceeds from the recent sale of its Spyder division in South Korea to keep the company running instead of paying off its overdue debt.
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