Pity The Poor People At Valentino

At the annual shareholder's meeting of the Valentino Fashion Group in Milan on Friday the Chairman Antonio Favrin said that he had been approached by several private equity firms looking to buy Valentino.

That is good news for Valentino shareholders, of course. Shares of the Valentino Fashion Group rose 5.4 percent on the news. Pretty much everyone is expecting Valentino to step down this year. It's the company's 45 anniversary and at 75, he's the last of his generation still designing his own line. So I can't help but feel sorry for the team he's worked with for so long. Not only because they'll miss him after he's gone, but also because this brand has been flipped more often than most. While sales are good for the investors, they're incredibly tiring and stressful for the staff.

Valentino and his partner Giancarlo Giammetti sold the brand to HdP in 1998. (The selling price has been estimated at between $233 and $300 million). Despite plans to invest some $70 million in the brand, it continued to lose money. In 2002 Hdp sold Valentino to Marzotto, for $210 million. In 2005 it was back in the black and that July the Marzotto Group decided to spin it off along with their other clothing brands (Hugo Boss, which makes most of the money and Marlboro Classics) and float the newly mined Valentino Fashion group on the Milan Bourse. It was valued at about $1 billion.

And now they're talking about taking it back off the exchange.

In the wake of every one of those announced deals was new management, new plans, new expectations. The fact that there hasn't been a mass defection of employees is, I think, a sign of how loyal they are to Valentino and to Giancarlo Giammetti who continues to work with the company. A new deal might be necessary to gather the funds to buy them out, but I wonder the staff can take the strain.

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