People walks past a Salvatore Ferragamo shop in downtown Rome, Italy, on February 10, 2016. (REUTERS/Tony Gentile)
The family owners of Italian fashion house Salvatore Ferragamo have held informal talks with financial investors to sell a minority stake in their holding firm as they seek to turn around the luxury brand and cope with the fallout of COVID-19, five sources told Reuters.
The company's chairman Ferruccio Ferragamo, son of late founder Salvatore, held the discussions sometime after the summer, offering about a 20 percent stake in the holding vehicle that controls the Milan-listed business, banking and private equity sources said, speaking on condition of anonymity as the matter is confidential.
A spokeswoman for the company - which has a market value of 2 billion euros ($2.4 billion) - denied that the Ferragamo family planned to sell the stake.
The sources told Reuters that the family is still in the preliminary stages of testing market appetite and that a deal might face resistance from investors since the family is not willing to give away any governance control.
Famous for shoes worn by Hollywood stars such as Audrey Hepburn, the Florentine leather goods brand saw its revenues plunge 60 percent in the second quarter, piling pressure on its family members - who control an overall 65 percent - to turn around the business.
"They have been calling around for a few months, targeting both private equity investors and sovereign wealth funds for a minority deal," one of the sources said.
A stake sale to deep-pocketed financial investors would help resolve internal disagreements over the company's turnaround strategy, allowing some of its family members to cash out, the sources said.
The heirs of founder Salvatore Ferragamo, including his four surviving children and several grandchildren, are all invested in Ferragamo Finanziaria SpA, which owns 54.3 percent of the company. Other family members hold an additional 10.7 percent.
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