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FB Roundup: Exor, Ermenegildo Zegna, L Brands

Agnelli family’s Exor linked to Armani, Zegna family lists luxury group via $3.2 billion SPAC, Les Wexner distances from L Brands with $2.2 billion share sale.

Agnelli family’s Exor linked to Armani

The Agnelli family that made its fortune in the Italian auto industry is expanding its interests in luxury goods with apparent overtures to Armani, only months after acquiring a quarter-stake in Christian Louboutin.

Agnelli scion John Elkann (pictured left), 45, the billionaire chairman and chief executive of Exor, the family-controlled holding company, has been in talks with fashion designer Giorgio Armani, Reuters reported.

Elkann allegedly proposed to buy a minority stake in the $7.09 billion Milanese fashion house, Italy’s second largest after Prada, which is entirely owned by its founding designer Giorgio Armani (pictured right), 87. The deal could have been made through Exor or Ferrari, the $4.1 billon sports car marque of which the Dutch-registered holding company maintains 22.9% of economic rights and 35.8% of voting rights.

However, the designer was reportedly reluctant to sell and turned down Elkann’s proposal earlier this month. Exor told Reuters it had not approached Armani and the Armani company did not comment.

Several factors suggest that is not the end of the matter. Elkann and Exor have deep pockets and global-scale ambitions. They had the acumen to advantageously negotiate the merger of Fiat Chrysler Automobiles and PSA Group into the new auto giant Stellantis in early 2021.

The suitors may offer to keep Armani’s seat at the boardroom table as part of a deal, as they did with the Christian Louboutin founders, Louboutin himself and Bruno Chambelland. Exor bought a 24% stake in the luxury footwear brand for $645 million in March 2021.

In December 2020, Exor acquired a controlling stake in Shang Xia Paris. The decade-old Chinese luxury brand was founded by French luxury giant Hermes, majority owned by the sixth-generation Dumas family.

Elkan and Exor’s Italian heritage may appeal to Armani over French luxury family rivals Arnault (LVMH) and Pinault (Kering), who show no signs of slowing down their own acquisition sprees.

Octogenarian Giorgio Armani has not publicly anointed the successor to his fashion empire, instead establishing a foundation in 2017 to transfer control. Armani would not be the only founder to revaluate or accelerate his succession plans in the wake of the Covid-19 pandemic.

Zegna family lists luxury group via $3.2 billion SPAC

Ermenegildo Zegna, the Italian family-owned luxury group, expects to raise $880 million by merging with a New York-listed special purpose acquisition company (SPAC), giving the entity an enterprise value of $3.2 billion.

The 111-year-family business is set to merge later in 2021 with the SPAC called Investindustrial Acquisition Corp. The SPAC is sponsored by Investindustrial, a European group of independently managed investment, holding and advisory companies with $12.9 billion of raised fund capital. Investindustrial will claim its 11% stake in Zegna, plus shares as the SPAC sponsor.

The fourth-generation Zegna family will continue to control the company with its 62% stake. Ermenegildo “Gildo” Zegna (pictured left), 65, is chief executive, alongside cousin Paulo Zegna, also 65, as chairman, with sisters Anna and Benedetta, two sons and a nephew on board.

The founder Ermenegildo Zegna and his brothers Edoardo and Mario, sons of a watchmaker, opened a wool mill in the northern Italian town of Trivero in 1910. Their point of difference was to import natural fibres from around the world and use contemporary English machinery to produce high quality fabrics. The second generation expanded the family business into ready-made suits.

The vertically integrated company was an early western entrant into China in 1991. It was that growing luxury market which helped Zegna keep its revenues above €1 billion ($1.7 billion) in 2020, despite a 20% drop in sales due to the pandemic.

Gildo Zegna said the Zegna family “will remain at the company’s helm following the transaction’s completion and we will continue to invest in creativity, innovation, talent and technology in order to sustain Zegna’s leadership position in the global luxury market.”

Andrea Bonomi (pictured right), 56, founded Investindustrial in 1990 after five years working for BI-Invest, the holding company of his Bonomi family, which earned its wealth in construction.

Bonomi said with Zegna, Investindustrial identified a group that included a strong family heritage and a leading position in sustainability.

“We are supporting the Zegna Group with a long-term commitment and a significant investment to back the company’s ongoing expansion and growth, with the goal of spreading Zegna’s unparalleled heritage and luxury craftmanship more broadly to customers around the world.”

Les Wexner distances from L Brands with $2.2 billion share sale

Founder Les Wexner has left himself with a 2% stake in L Brands, the parent company of Victoria’s Secret, after selling his latest release of shares for $2.2 billion.

The Ohio billionaire (pictured left), 83, has almost completely cut ties with the $12.91 billion business he founded with a single clothes store for fast-selling garments called The Limited in 1963.

It was the third and by far largest sale of shares by Wexner and wife Abigail, 59, in 2021, all three amounting to $2.7 billion. The sales make the most of the quadruple increase in share value over the past year before L Brands’ public split into its main component parts—the popular bath chain Bath & Body Works and the uneven lingerie retailer Victoria’s Secret—in August 2021.

Sales at Victoria’s Secret fell to $5.4 billion in 2020 from $7.7 billion in 2015, but rallied in the first quarter of 2021 as lockdown restrictions eased and shops reopened. The retailer is attempting to become more inclusive in its appeal after its peak involved parading supermodels in the 2000s.

L Brands, through Bath & Body Works, Victoria’s Secret and PINK, operates almost 2,700 specialty stores in the United States, Canada and China, in more than 700 franchised locations worldwide and through its websites. L Brands is likely to disappear after the split.

Wexner retired as L Brands’ long-serving chief executive and chairman in 2020 amid investigations into his association with the disgraced US financier Jeffrey Epstein, who killed himself in 2019. The Wexners did not stand for re-election to the board at the annual shareholders’ meeting in May 2021.

The couple have four young adult children, but none appear to have joined L Brands or the philanthropic Wexner Foundation, which Wexner founded to strengthen Jewish leadership. Eldest son Harry Wexner is a middle school teacher.

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