We often hear about companies going public, but the Italian luxury shoemaker Tod’s is moving in the opposite direction.
The family behind the brand is planning to make it a private company, The Wall Street Journal reported on Wednesday. The move serves as an attempt to help boost growth and profits at Tod’s, which has lagged behind other luxury goods companies. Although sales were up 23 percent in the first three months of 2022 (compared with the same period in 2021), overall revenue last year was only 883 million euros, down 2.7 percent from 2019.
“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, adding that private ownership would free the company from “limitations” that exist due to its current, publicly traded status. The Della Valles also said that the new ownership structure would allow other brands in Tod’s Group, such as Roger Vivier, to have more visibility and autonomy.
As part of the plan, CEO Diego Della Valle and his family are hoping to increase their holding in the company to 90 percent, by buying 25.55 percent of the company’s stock at 40 euros a share. In all, the acquisition would cost them 338 million euros and value Tod’s at 1.32 billion euros, according to the WSJ.
The news of the Della Valle family’s offer resulted in Tod’s Group stock jumping more than 20 percent. In recent years, however, the stock’s value has dropped, and it was trading at about 33 euros before the announcement, less than a quarter of its peak value almost a decade ago.
Tod’s had previously been trying to increase sales with a strategy focused on growing online retail and attracting younger customers. However, those efforts weren’t all that successful, analysts said, which likely led to the decision to go private. And while the Della Valles will now own most of the company, the remaining 10 percent of shares will be held by LVMH, a business that has been faring quite well recently, with 2021 profits up 20 percent compared with 2019.