LAST OF THE RED HOT MERGERS?
At press time, just as the Italian conglomerate HdP was negotiating the sale of Valentino to the apparel group Marzotto, luxury analysts issued a warning that this could be the last sale of its kind for some time. Following a protracted period that saw houses as diverse as Donna Karan, Balenciaga, Helmut Lang and Alexander McQueen being snapped up in an acquisition frenzy, the market appears to have sated its appetite.
Some analysts are pre dicting a dry spell of at least a year or two, save for smaller houses and brands in distress. “A lot of people are stili recovering from the excesses of a few years ago,” said Andrew Gowan, luxury analyst at Lehman Bros, in London. “We’re not generally fans of acquisitions in the industry.
“İou might be better off being a smaller company with a few star brands than a sprawling empire.” At least two of the majör cata lysts behind the feeding frenzy look to be retrench ing as well. Following a year of depressed profits, LVMH dumped its plans to expand Phillips, de Pury & Luxembourg into a majör auction house and abandoned its e commerce initiative. Prada, meanwhile, has taken to issuing near weekly press releases to assure its critics that it is not selling Helmut Lang or Jil Sander.