Editor’s Note
This article discusses a capital injection by LVMH-backed L Catterton into Italian fashion house Etro, highlighting ongoing financial maneuvers within the global luxury sector.
Mergers and acquisitions are actively taking place in the global luxury market. Etro, acquired by the private equity fund ‘L Catterton’ co-founded by the luxury group LVMH in July 2021, recently raised a capital increase of 15 million euros (approximately 20.9 billion KRW).
According to information first reported by the Milan daily MF Fashion, Etro stated, “This equity strengthening intervention by shareholder L Catterton, aimed at funding important investments for the group, is part of the overall brand revival project that began in December 2021.”
The maison, with majority shareholder L Catterton holding 60% and the Etro family holding the remaining 40%, has undergone fundamental organizational changes over the past two years under the leadership of CEO Fabrizio Cardinali. These changes included process re-engineering, strategic repositioning, and the introduction of a new aesthetic direction overseen by Creative Director Marco De Vincenzo, who was recruited last year.
Comprehensive efforts have also been made for overall improvement, including product line refinement, image reconstruction, digital enhancement, supply chain management, distribution network, and entry into new markets.
A year later, significant progress has been made, but there is still a long way to go. Etro’s 2022 sales increased by 17% compared to 2021, reaching 277 million euros, but it incurred a loss of 23.6 million euros. Etro explained that this loss was “primarily due to the impact of depreciation and special expenses. However, there was a clear improvement compared to the previous fiscal year.”
The Swiss group ‘Oerlikon’ acquired Riri, a company that manufactures snap fasteners and zippers for major luxury leather goods and haute couture houses, in March.
Riri conducts rigorous work, including long-term mechanical testing to confirm the elasticity of zippers and ensure that logos and monograms do not fade due to wear. The market value of the Riri brand is estimated at 3.5 to 4 billion euros (approximately 487.7 to 557.3 billion KRW), with individual zipper prices ranging from 2 euros to 20,000 euros for gold zippers. The average unit price is about 50 times higher than in Asia.
Recently, Riri has expanded into Physical Vapor Deposition (PVD) technology, a process for coating metals to prevent corrosion, which is one of Oerlikon’s specialties. PVD coatings are used in aviation, automotive, and industrial tools, and Oerlikon has been striving to offer this technology to luxury brands as a future challenge.
To formally enter the luxury sector, Oerlikon acquired Riri after purchasing the French company ‘Coeurdor,’ which makes clasps, rings, and belt buckles, in 2021.
Founded in 1906, Oerlikon’s textile machinery equipment division is struggling due to reduced consumption caused by inflation. The coatings division was severely impacted during the COVID-19 pandemic by shocks to the aviation and automotive industries. However, diversifying into the luxury business has provided a more stable source of income.
Oerlikon recently reported that orders for Q3 2023 decreased by 25.8% year-on-year to 567 million Swiss francs (approximately 819.7 billion KRW), and sales decreased by 15.9% to 623 million Swiss francs.
French jewelry maison ‘Boucheron’ has made its first acquisition of an atelier adjacent to Place Vendôme in Paris as part of its brand growth and development strategy. The historic maison, owned by the French luxury group Kering, has thereby strengthened its high jewelry production capacity.
The atelier, formed by combining four companies—E.Blondeau, Belter, Chanson & Cie, and FG Développement—has been recognized for its expertise with an outstanding tradition. Since 2017, about 60 artisans (designers, jewelers, setters, polishers, finishers) have been working together under one roof, participating in each stage of high jewelry manufacturing.
The exact terms of the acquisition have not been disclosed. The workshop will maintain its current location and officially joined Boucheron on October 31, 2023, set to combine forces with the maison’s historic atelier located at 26 Place Vendôme.
Meanwhile, owning a high-end jewelry workshop on or near Place Vendôme remains a symbol of luxurious prestige. Louis Vuitton and Chanel each set up workshops in their boutiques in 2012. Cartier also recently renovated its flagship store (13 rue de la Paix) with a redesign featuring 18 dedicated high jewelry display cases that reflect natural light from outside.
Luxury companies are securing the skills and expertise of the jewelry ecosystem through training programs while also securing suppliers to enhance their manufacturing capabilities in the long term.
Last April, the LVMH group announced plans to acquire the French jewelry manufacturer ‘Platinum Invest Group’ to strengthen its high-end jewelry manufacturing capabilities, with a particular focus on improving production for Tiffany & Co.
The group had previously acquired the jewelry manufacturer ‘Pedemonte,’ which employs about 350 people in northern Italy. Christian Dior acquired the French jewelry companies ‘Oteline’ and ‘FG Manufacture,’ both certified as “Entreprise du Patrimoine Vivant” (Living Heritage Company).
Cartier does not intend to acquire partners immediately, but according to CEO Cyrille Vigneron, its latest jewelry factory in Turin considers training and recycling-related aspects as essential parts.
Van Cleef & Arpels, owned by the Swiss Richemont group, announced in April that it would open two new jewelry ateliers in France over the next three years and expand its existing training programs.