Prada’s profit rate this year has dropped by 22%, but there is no clue of any merger and acquisition so far. The problem is the owner is not willing to sell. It is just like what Mr. Rupert of Richemont Group said early last month that any company they would like to acquire was not for sale. Headquartered in Switzerland, this fashion group’s report this month shows that by the end of March this year, their net profit is 1.08 billion Euros, dropped by 31%.
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According to Karen Walker, Senior Managing Director of Michel Dyens & Co., an investment banking firm focused on mergers and acquisitions, luxury goods companies, especially those most coveted are mostly family business, who are usually not interested in selling their shares. Besides, as the stock prices are going down on a continuous base, it is not a good timing to sell now.
Private companies like Hermes, and Chanel also state clearly that they don’t want and need, from the point of finance, to sell their shares.
In Italy, about 40% of the companies engaging in luxury goods business are private owned, such as Giorgio Armani. Analysts in Milan hold that whether or Armani, although their business cross multiple aspects, and thus not affected by any industry shakeout, they still have to cut their expenditure.