Tod’s chief executive, Diego Della Valle, has said he is open to selling an additional stake in his Italian luxury shoemaker to French conglomerate LVMH, as he announced plans to step back from day-to-day management at the group.
Della Valle, whose family in the 1920s founded the group he would later rebrand Tod’s, said that while he loves to have “control” he is ready to relinquish it to other members of his family and potentially to his longtime friend, French billionaire Bernard Arnault, who owns LVMH.
“No one believes me but I need one year to prepare the team and I am ready to [free up my time] by 60-70 per cent,” he said speaking at the Financial Times’s Business of Luxury Summit on Wednesday.
“I have a family and a nephew, we love what we do . . . but if one day I decide [to sell] I believe in people like Bernard,” he added.
LVMH last month bought a 6.8 per cent stake in Tod’s for €75m, fuelling speculation of an eventual takeover of the shoemaker. The French group already held a 3.2 per cent stake in the Italian company.
“[The stake sale] was a sign to show we like to stay together . . . we have the same idea about luxury, fashion. If we have an occasion to do something in the future we try to do it,” said Della Valle. “If it’s possible we are ready.”
Della Valle ruled out alternative options, saying that if he were to ultimately sell the group it would be to LVMH “100 per cent, for sure”.
Amid a steady drop in revenue over the past few years and a challenging turnround plan aimed at attracting young customers, Tod’s has been viewed by analysts as a prime takeover target.
Recent takeovers of Italian high-end brands — such as Gucci, Bulgari and Bottega Veneta — by the French luxury giants have been viewed with scepticism in Italy as industry experts have voiced fears of a dilution of the “Made in Italy” brand and a loss of jobs to foreign competitors.
But Della Valle insisted that while he is committed to cutting costs and rethinking the retail store experience, Tod’s would “defend the employees”.
In April Tod’s appointed Italian influencer and entrepreneur Chiara Ferragni to its board of directors, helping boost its share price by more than 50 per cent over the past month. Della Valle said Ferragni, who has more than 23m followers on Instagram, would help communicate Tod’s message to younger customers.
“We try to work together on some ideas for solidarity and welfare . . . we will launch projects targeted at the younger generation.”
Creative director Walter Chiapponi has been revamping the label’s leather goods offer, expanding its selection of ready-to-wear and emphasising the “T” logo in a bid to draw younger customers. Some analysts believe, however, that the latest stake sale to LVMH is a sign that Tod’s acknowledges its turnround efforts have not gone as planned.
Tod’s has fared worse than some domestic as well as larger luxury rivals during the pandemic, with full-year revenues of €637m down 30 per cent year on year in 2020 compared with 17 per cent at LVMH.