Kering, Mayhoola Amend Agreement, Postpone Valentino Put Options

Core Insights - Kering and Mayhoola have agreed that the ownership structure of Valentino will remain unchanged until at least 2028, reflecting a strategic partnership aimed at supporting Valentino's long-term success [1][4]. Ownership Structure - The amendment to the shareholders' agreement follows Kering's acquisition of a 30% stake in Valentino for 1.7 billion euros in 2023, as part of a strategic partnership with Mayhoola [2][3]. - Kering had the option to acquire 100% of Valentino by 2028, while Mayhoola could become a shareholder in Kering, with the final purchase price dependent on Valentino's performance [3]. Financial Implications - The postponement of Mayhoola's put options for its remaining 70% stake in Valentino to 2028 and 2029 allows Kering to defer additional debt, which is crucial given Kering's net debt increase from 200 million euros in 2021 to approximately 10.5 billion euros by the end of 2024 [5]. - Kering will need up to 3.4 billion euros in cash to acquire the remaining stake in Valentino [5]. Valentino's Performance - Valentino's revenues for 2024 decreased by 3% to 1.31 billion euros, with a 2% decline at constant exchange rates. However, direct retail, including e-commerce, improved by 5% and accounted for 70% of revenues [6]. - The brand has been reducing its wholesale channel by about 20% in 2024, a strategy that is expected to continue into 2025, potentially leading to double-digit revenue declines for the year [7].