Tod’s Founding Family to Take Luxury-Loafer Maker Private

Tod’s Founding Family to Take Luxury-Loafer Maker Private #Tods #Founding #Family #LuxuryLoafer #Maker #Private Welcome to Lopoid

The family behind luxury Italian shoemaker

Tod’s

TOD 20.17%

SpA said it plans to take the company private as part of an effort to boost growth at the maker of high-end loafers.

Chief Executive

Diego Della Valle

and his family on Wednesday said they were offering to pay 40 euros a share, equivalent to $40.67, to acquire 25.55% of the company’s stock and increase their holding to 90%. The acquisition would cost the family €338 million and value the company at €1.32 billion.

Luxury giant

LVMH Moët Hennessy Louis Vuitton SE

currently holds 10% of Tod’s shares, and would continue to own a 10th of the company after a proposed delisting from the Milan Stock Exchange.

“The Della Valle family has decided to make a big investment in the Tod’s Group in order to accelerate its development,” the family said in a statement. It added that delisting would free the company of “limitations” imposed by its 22-year status as a publicly traded firm.

The family said the move would also allow it to give other brands within the group, which include Hogan and Roger Vivier, more visibility and autonomy.

At a time of booming spending on luxury goods, sales at Tod’s—best known for its Gommino loafers—have failed to keep pace with industry leaders like LVMH, analysts say. Tod’s increased its sales last year relative to a Covid-19-hit 2020, but revenue of €883 million was down 2.7% compared with 2019. By contrast, LVMH’s 2021 sales rose 20% relative to 2019.

Tod’s has, though, fared better in the first three months of this year, with sales up 23% compared with the same period in 2021.

Tod’s launched a turnaround plan five years ago in response to flagging sales. The strategy was designed to boost online sales and court younger consumers, but the results were disappointing, analysts have said, likely prompting the decision to take the company private.

The company’s stock has broadly drifted lower in recent years, trading at around €33 before Wednesday’s announcement, less than a quarter of its peak value nearly a decade ago. In response to the Della Valle family offer, the stock jumped more than 20%.

Mr. Della Valle, the 68-year-old grandson of the company’s founder, controls Tod’s together with his brother Andrea. He also serves on LVMH’s board of directors. LVMH roughly tripled its stake in Tod’s last year, leading some analysts to anticipate that the French group might try to acquire the company.

Other Italian luxury firms have been going public as a way of raising funds to drive their development.

Ermenegildo Zegna

NV listed in New York in December, with the company’s chief executive and namesake telling reporters at the time that it was becoming more difficult for relatively small independent luxury companies to compete with conglomerates such as LVMH and

Kering SA

.

Write to Trefor Moss at Trefor.Moss@wsj.com

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