Cavalli is bang on trend

Italian fashion legend Roberto Cavalli is on the verge of selling part of his family business, according to a private equity firm. It’s yet more proof that smaller luxury brands are flavour of the month.

Cavalli began his business over 40 years ago, and became famous for his exuberant animal prints, which depending on taste are either vibrant or vulgar.

His clothes have been worn by the likes of singer Jennifer Lopez and model Karolina Kurkova, which added to his the brand’s glamour. (The claim by Mohammad Al Fayed – the owner of Harrods – that he wears Cavalli underpants perhaps did less to enhance its reputation.)

Four of Cavalli’s five children have worked for the family firm, which had a turnover of €200m in the last financial year. Healthy enough for Cavalli to indulge his flamboyant tastes – he owns a 36-acre estate outside Florence, purple helicopter, a zebra-patterned Ducati, and is married to 1977 Miss World runner-up.  But in the world of high-end fashion, it doesn’t place the business not in the premier league.

Which is exactly why Italian private equity firm Clessidra is in negotiations to take a stake in the business. Prada, Gucci, Hugo Boss and and other mega-brands have seen sales decline recently as Chinese consumers look for more niche luxury goods. Cavalli would be ideal, having huge glamour but not mass appeal. It is bang on trend for 2015.

Clessidra isn’t the first to try to take a chunk of Cavalli. Fellow PE firms Permira and Investcorp have also been in negotiations in the past, as has jeans brand Diesel and Russian bank VTB, but deals have always foundered on Cavalli’s desire to keep control, and his demands over succession.

What is different now? Possibly that the septuagenarian founder is happier to give away some control. Or possibly that the offer is more attractive. Expect to see more China-facing investors looking to snap up mid-market fashion brands – and families being tempted.