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.