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Ferragamo shares up after matriarch’s death

From straitstimes

ROME • Need a fashion acquisition to help dress up the company’s bottom line? Salvatore Ferragamo shares gained the most in two years as the death of the founder’s widow prompted speculation that her heirs might sell their stakes in the Italian luxury shoemaker.

The shares, which peaked in 2015, rose by as much as 8.8 per cent in Milan.

Mrs Wanda Ferragamo died last Friday at age 96, nearly six decades after she took over running the Florentine company favoured by silver-screen icons like Audrey Hepburn.

She was a key member of the family shareholders who controlled the company, opposing any sale after it was floated on the Milan stock exchange in 2011.

Her death “opens up potentially interesting scenarios” for mergers and acquisitions, wrote Mr Flavio Cereda, an analyst at Jefferies.

“There will be a greater concentration of control in the hands of fewer members in the family, some of whom have been sellers in the recent past.”

Mrs Ferragamo held 20 per cent of voting rights in the family holding, and a further 15 per cent has yet to be allocated following the death of her daughter Fulvia earlier this year, according to the analyst.

Mrs Ferragamo was part of a generation of female entrepreneurs whose ambitious leadership transformed the fashion landscape.

Alongside the Fendi sisters, and later figures like Miuccia Prada and Donatella Versace, she helped turn Italian craftsmanship into a global commodity.

Following the death of her husband in 1960, she added handbags, ready-to-wear and perfumes to build up the footwear icon into a complete fashion brand.

While Salvatore Ferragamo has struggled to keep up profitability and brand awareness, the company might still be attractive to buyers.

It is one of the few remaining independent luxury companies with a historic brand that a buyer could try to rejuvenate.

There are plenty of possible purchasers too. American companies Michael Kors and Tapestry are trying to build fashion conglomerates while France’s luxury behemoths are sitting on big cash piles and Chinese companies increasingly have been looking to snap up European brands.

Last month, Versace sold itself to Michael Kors Holdings for US$2.1 billion (S$2.9 billion).

Mrs Ferragamo’s eldest son Ferrucio, who is the company’s chairman, said in April that the family did not intend to sell. This summer, the family tapped former Gucci executive Micaela Le Divelec to take over as chief executive officer.

Some analysts do not expect any quick sale.

“We would not take this event as a clear-cut catalyst for any corporate action” even if takeover speculation may boost Ferragamo’s share performance in the long-term, wrote Fidentiis analyst Alberto Checchinato.

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