A range of luxury sector merger and acquisition opportunities exist in the Europe, Middle East and Africa market for 2014, generating liquidity events that wealth managers should keep on their client-acquisition radar, according to a new report by Wealthmonitor

A range of luxury sector merger and acquisition
opportunities exist in the Europe, Middle East and Africa
market for 2014, generating liquidity events that wealth managers should keep
on their client-acquisition radar, according to a new report by Wealthmonitor. (This
publication has issued a number of previous Wealthmonitor
research reports on an exclusive basis, such as here.)

The research organisation said that a “flurry of M&A
activity is bound to happen in the European luxury space in 2014, as players
assess divestitures of their less-profitable units, stake sales to larger
players and acquisitions within more lucrative subsectors, including affordable
luxury, watches and leather goods”.

Although the European luxury sector has seen a slowdown for
the first time since the 2007 economic crisis, Wealthmonitor said, interviews
it has carried out with senior executives show an “array of opportunities”,
particularly in Italy and France.  

Potential deals:

Bompard

French private luxury cashmere specialist Bompard is
interested in joint venture agreements to enter the US
and Asia, particularly India
and China,
chief executive Eric Bompard has said. The €90 million turnover company
welcomes approaches from potential partners. It would take a 20 per cent stake
in India and China JVs but
aims to be the majority shareholder in any US joint venture it closes.

Vestiaire Collective

French fashion e-commerce site Vestiaire Collective has
mandated an undisclosed advisor to find targets in the US. The €18 million
turnover company is interested in complementary second-hand luxury fashion goods
platforms. It received $20 million in a Series C funding round this year from
Conde Nast and Idinvest, together with previous investors Balderton and
Ventech.

Groupe Verotrade

French manufacturer and retailer of luxury clothes and
accessories Verotrade, part of Groupe Veropam, is scouting Italian, French,
German, Spanish and UK markets for targets, chief executive Allan Bensoussan has
said. Targets with a size between €5 million and 20 million are of interest to
the €30 million turnover firm. It works with Societe Generale and law firm
Francis Lefebvre. JV agreements could also be considered to expand in new
markets. Among its competitors is shoe retailer Royer.

Folli Follie

Athens-listed jewellery and accessories producer and
retailer Folli Follie is eyeing a 30 per cent to 40 per cent stake listing in Hong Kong to raise up to €2 billion to fund its expansion
plans, sources said. A sale of its remaining 49 per cent stake in its travel
retail division Hellenic Duty Free by 2016 could raise a further €400 million.
Future acquisitions could include luxury clothing or cosmetics targets. Latin
America, particularly Brazil,
and Turkey
are markets of interest for further growth.

Roberto Cavalli

Italian fashion group Roberto Cavalli has seen mounting
interest from private equity suitors in recent months, though management has no
plan for an exit at this stage, a spokesperson has said. With revenue of €185 million
and EBITDA of €20 million, the company could be 18 months away from a sale,
bankers with knowledge said. It already sounded out interest two years ago, but
it failed to attract investors matching its exit expectations.

Ermanno Scervino

Italian private fashion house Ermanno Scervino is looking to
buy domestic targets operating in the high-end fashion space, particularly
eyeglass, perfume and homeware producers, chief executive Toni Scervino has said.
Approaches from interested parties and advisors are welcome. The "Made in Italy"
character is a must of any potential target. The €93 million turnover company's
core markets include Japan, Russia and Eastern Europe.

Industrie Testi

Italian private jeweller Industrie Testi, which operates the
Rebecca brand, is interested in receiving approaches from private equity and
strategic bidders, chief executive and owner Alessandro Testi said. An ideal
bidder would be a private equity with a track record in the luxury sector.
Offers for the whole group are preferred but a minority stake sale would also
be considered. It expects €25 million turnover this year. The US is its main
international market. Danish Pandora is its main competitor.

Vignola Nobile

Italian private tannery company Vignola Nobile could
consider a strategic investor and is keen on mandating a bank to find suitable
buyers, chief executive and owner Sabatino Vignola said. A 30 per cent stake
could be released though offers for a majority stake could also be assessed. A
large luxury goods company the likes of Prada, Gucci and LVMH would be an ideal
buyer. It expects turnover of 16 million this year.

Orla Kiely

London-based lifestyle fashion brand Orla Kiely has
appointed a new financial director, Matthew Emerson, to review strategic
options, co-owner and Managing Director Dermott Rowan said. A financial or
strategic partner that would inject cash to develop the business internationally
via new flagship shops and franchises is of interest. The nature of the deal or
stake size have not yet been defined. It had turnover of €26 million in 2012
and targets €50 million by the end of 2014.

Giada

Italian private luxury group Giada, which holds a license
for the Jacob Cohen brand, denied comments by a source that it has appointed
BNP Paribas for a potential sale. Earlier this year the company held talks with
private equity and strategic suitors, but has decided to pursue a standalone strategy.
It had revenue of €50.07 million in 2012. It plans to open up to 15 flagship
stores in China, the US, France,
Japan
and GCC.