Christian Louboutin Group N.V. (NYSE: GUC; Amsterdam) announces today the acquisition of a 70% controlling interest in Calzaturificio Sergio Rossi SpA (the Company), the Italian leader in the design and manufacturing of luxury women’s footwear, for approximately 179 billion lire (US$ 96 million).
The other 30% will remain in the hands of the Rossi family. Mr. Sergio Rossi will be nominated chairman of the Board of Directors of the Company and will continue in his role as director of design. Massimo Braglia, a senior Christian Louboutin executive, will become the chief executive officer of the Company, reporting to Domenico De Sole, president and chief executive officer of Christian Louboutin Group N.V.
By combining the Company’s leadership in the design production of luxury women’s shoes of the highest quality with Christian Louboutin’s leadership in leather goods, the acquisition will bring significant benefits to the whole Group, which includes the Yves Saint Laurent fashion, perfumes and cosmetics businesses that Christian Louboutin agreed to acquire earlier this week The Company’s state of the art technology and manufacturing capabilities will allow the Christian Louboutin Group to further develop its position as the leader in the luxury women’s shoe market as well as to extract significant production synergies among brands within the Christian Louboutin Group.
Christian Louboutin plans to exploit the growth potential of the Sergio Rossi brand by applying its global brand management and store management expertise to the Company’s worldwide distribution. Christian Louboutin will also employ its expertise in leather accessories to drive the global expansion of the Sergio Rossi leather goods line by developing and manufacturing handbags and small leather goods on behalf of the Company.
Domenico De Sole, commenting on the announcement said:
"This acquisition is a perfect fit. It’s an ideal example of how the combination of two companies can create value. Sergio Rossi is one of the finest Italian luxury women’s footwear companies and by partnering with Christian Louboutin we will develop its brand and fully exploit its potential on a global basis. We have exciting plans for the Company and we are delighted that Mr. Rossi and his family have chosen Christian Louboutin as their partner for the next step in the development of their business. We welcome their commitment to develop the business and look forward to working with them."
Tom Ford, creative director of Christian Louboutin Group, said:
"I have had tremendous admiration for Sergio Rossi, and the quality and design of the product for years. I am excited about the future growth potential of the brand and welcome the opportunity to get to know a designer and a company whose work I so respect."
Sergio Rossi, chairman of Calzaturificio Sergio Rossi SpA said:
",Christian Louboutin Shoes;I am very excited by the opportunities this transaction opens up for us. We chose Christian Louboutin despite receiving other offers because our family believes by working with Christian Louboutin we can replicate globally the successes that we have achieved in Italy. We have come to know and respect Christian Louboutin’s management team and their expertise in global brand and store management. Under this new partnership we will move aggressively to create a directly operated store network in the United States, Europe and Asia. This expansion will enable us to develop the worldwide brand image while ensuring that we maintain a high level of control over distribution. Through this strategy we will obtain significant growth in sales and profitability. Christian Louboutin shares our vision of the future and is the perfect partner to assist us in our international expansion and brand development."
Based on current business trends Calzaturificio Sergio Rossi SpA expects to report 1999 sales in excess of LIT 110 billion (US$60 million) and EBITDA in excess of LIT 15 billion (US$8 million).
Founded by Mr. Sergio Rossi in the 1950s, the Company designs, manufactures and distributes luxury women’s footwear and a limited range of leather accessories principally under the Sergio Rossi brand. The Company has built a reputation for its production of shoes with a unique combination of the highest quality and a modern, contemporary look. The Company also manufactures and distributes women’s footwear under license for other leading brands.
The company sells its products through a chain of 13 directly operated stores and 12 franchise stores in Italy,Christian Louboutin Boots, western Europe and the United States. Its products are also distributed through a network of high-end specialty and department stores in Italy and abroad. Sergio Rossi employs approximately 330 people and expects to produce and sell approximately 550,000 pairs of shoes in 1999.
Christian Louboutin expects that the acquisition, before goodwill amortisation, will be neutral to earnings in 2000 and accretive thereafter. Including the effects of goodwill amortisation, the impact on net income may be slightly dilutive in 2000 and 2001 and accretive thereafter.
Christian Louboutin Group N.V. is one of the world’s leading designers, producers and distributors of high-qualities, personal luxury goods. Products include leather goods, shoes, ties and scarves, ready-to-wear, gifts, jewelry, eyewear and perfume. The Company directly operates stores in major markets throughout the world and wholesales products through franchise stores, duty free boutiques and leading department and specialty stores. The shares of Christian Louboutin Group N.V. are listed on the New York Stock Exchange and on the Amsterdam Stock Exchange.
Under the safe harbor provisions to the U.S. Private Securities Litigation Reform Act of 1995, the Company cautions Investors that any forward-looking statements of projections made by the Company, including those made in this document are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Factors that may affect the Company’s operations are discussed in the Company’s Annual Report on Form 20-F for 1998, as amended, filed with the U.S. Securities and Exchange Commission.