Agnelli family buys 24 per cent stake in Christian Louboutin

Italy's billionaire Agnelli family has continued its expansion into the luxury sector with the acquisition of a stake in French luxury shoe maker Christian Louboutin.

Exor, the industrial dynasty’s holding company, said on Monday it will invest €541 million in the French brand, whose signature design is a towering stiletto with red-lacquered soles, to acquire a 24 per cent stake.

The deal values the 30-year-old Paris-based brand, named after its eponymous designer and co-founder, at a total of €2.3 billion. Exor will also appoint two of the seven board members.

The investment follows Exor's acquisition last December of a majority stake in Chinese luxury lifestyle label Shang Xia, which is co-owned by France's Hermès. It signals the Agnelli family's further push into the luxury sector, which it has flagged for expansion alongside tech, and where the Arnault, Pinault and Rupert families dominate brand ownership through their LVMH, Kering and Richemont holding companies.

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Louboutin, whose shoes are regularly worn by royalty and Hollywood stars, has declined many offers to buy the company over the years, including from LVMH, the world’s largest luxury group by revenues. When asked in a 2018 interview if Christian Louboutin would remain independent, he said: “You can never say forever, but it’s been 27 years and for me it’s an important thing to be free.”

In a statement on Monday, Louboutin said Exor’s “steady long-term focus and a strong entrepreneurial culture” makes it the right partner to “write a new page in the history of our Maison.”

“The partner with whom we would associate should respect our values, be open-minded and should have an ambitious, young dynamism,” he added. Louboutin will retain the company’s majority stake with his business partner, Bruno Chambelland.

Sales contraction

The deal comes after sales in the wider luxury sector contracted last year, as restrictions on international travel and widespread lockdowns to combat the march of the coronavirus pandemic curbed spending on high-end goods.

Sales were set to contract 22 per cent in 2020 to reach €217 billion globally, representing a return to 2014 levels, and they will take up to three years to recover, according to a November study by consultancy Bain and Altagamma, the Italian luxury association.

Christian Louboutin said the brand fared well during the pandemic thanks to its existing ecommerce platform, which it plans to expand further. Exor had previously indicated the tech and luxury sectors as its new areas of focus.

John Elkann, the Agnelli family scion and Exor’s chief executive, said: “Christian Louboutin’s extraordinary creativity, energy and unique vision are precisely the qualities needed to build a great company.”

Elkann and Louboutin have known each other for many years and both insist their partnership is based on “mutual trust”. Exor will be a long-term investor which will help support the company’s further growth, the company said.

The Christian Louboutin stake marks Exor's third investment alongside French partners after the blockbuster Fiat Chrysler and PSA merger was finalised last month to create Stellantis, the world's sixth automobile manufacturer.

Exor’s firepower to do further acquisitions was boosted by the €1 billion in dividends it reaped following the deal. – Copyright The Financial Times Limited 2021