LVMH, Moët Hennessy Louis Vuitton, and PRADA today announced an agreement whereby LVMH will acquire PRADA's stake in Fendi, representing 25.5% of the company's share capital.
Following this transaction, LVMH will hold 51% of Fendi's share capital, alongside the Fendi family, who hold 49%.
In October 1999, LVMH and PRADA announced an agreement providing for their acquiring 51% of Fendi through a joint venture in which they held equal stakes.
LVMH is delighted with this new agreement, which paves the way for accelerated development of one of Italy's greatest luxury brands. Since October 1999, significant progress has been made in reorganisation and development in cooperation with PRADA and the Fendi family. Its fruits have been particularly visible in a considerably strengthened network of proprietary stores. In the space of 18 months, the number of proprietary stores in the Fendi global network has risen from 4 to 83. Fendi has also opened flagship stores in the famous avenue Montaigne in Paris, and in London, as well as other stores in cities including Bologna, Tokyo, Sydney and Bangkok.
Fendi has also terminated a number of licences and has reorganized the company on both an operational and industrial level in order to position it for international development.
Almost two thirds of Fendi's sales now stem from proprietary stores, against less than a quarter in October 1999.
Yves Carcelle, President of the LVMH Fashion Group, commented : "This transaction is a very positive strategic step and an excellent opportunity for LVMH to take majority control of a brand with significant development potential. The quality and geographic transferability of Fendi's products position the brand amongst the luxury leaders. Fendi is a star brand with long-term growth potential. We are happy to be pursuing this development in the context of support and friendship from the Fendi family.
I would like to thank Patrizio Bertelli and all of the PRADA team for their great contribution to the initiatives we have undertaken together.
We are confident that our two groups will have further opportunities to work together in the future."
Patrizio Bertelli, CEO of PRADA Holding, commented : "This decision has been made in the vein of friendly cooperation with has always typified our relations with LVMH. This transaction gives PRADA the financial wherewithal to strengthen its development strategy focusing on brands in which it owns either all, or a majority, of the share capital."