Kering Has Said That Future Acquisitions Will Focus On Small And Medium-Sized Brands.

The news of "P > LVMH buying Italy's luxurious worsted brand Loro Piana for 2 billion euros has shocked the capital market. As if suddenly aware of the few independent luxury brands in Italy, it seems that it has the potential to become the target of luxury group acquisition, and there are few luxury brands with high quality, potential growth and international reputation.

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< p > Salvatore Ferragamo, Tod 's, and even the price of fashion Yoox Yoox has soared 3 to 4%, reaching the highest point in history - and the largest increase in Brunello Cucinelli has been done in the same category as Loro Piana.

Although these stocks were all down in the next few trading days, the market still relished the prospect of their acquisitions.

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< p > as of July 12th, the market value of Salvatore Ferragamo, Tod 's, Brunello Cucinelli listed in Milan was 4 billion 240 million euros, 3 billion 590 million euros and 1 billion 400 million euros respectively.

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At present, Italy's domestic economic situation is at a historical low level, and the credit support of banks to private enterprises has declined. In order to hedge the risks of traditional European markets and seize the growth opportunities of emerging markets, these independent luxury brands are spared no effort to expand internationally - but capital and talent are bottlenecks.

Through mergers and acquisitions, members of large and diversified international luxury goods groups can not only get funds, marketing and talent support, but also make family owners early to secure their bags.

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< p > in fact, Loro Piana's two brothers Sergio and Pier Luigi Loro Piana are just beginning to worry about the prospect of the family business, only a month ago they found the chairman of the LVMH Arnault to consult.

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< p > Loro Piana valuable wool and cashmere resources; top level fabrics a target= "_blank" href= "http://www.91se91.com/" > textile > /a > technology; and Cen GUI brand image has urged Arnault to make up its mind that its profit margin before more than 20% interest tax depreciation will also help to enhance the profitability of the brand portfolio of LVMH.

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The P > Loro Piana 80% bid was 2 billion euros, which was close to 2 billion 200 million euro cash reserves at the end of 2012.

A large part of the acquisition will come from LVMH's new borrowing (although there is a 6 billion 800 million euro bank loan, and LVMH's leverage ratio at the end of 2012 is 17%, there is still plenty of room for borrowing).

By the end of 2012, LVMH still had 3 billion 300 million euros in the amount of financing that banks had not yet undertaken.

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< p > another potential buyer, the French luxury group Kering (PPR) also bought Italy jewelry brand Pomellato in about 300 million euros in April this year, although the scale is smaller than that of LVMH. However, at the end of 2012, Kering accounted for the equivalent of cash, 2 billion 100 million euros, plus 3 billion 800 million yuan euro's uncommitted bank financing commitments. However, Kering has said that the future acquisition will be dominated by small and medium-sized brands.

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