Drawing Interest
M&A talk swirling around Golden Goose.
MILAN — Golden Goose is the latest
Italian brand at the center of merger and acquisition talk here — and there is one tidbit that could bring some additional interest to the label. According to market sources, former Gucci creative designer Frida Giannini has been designing the brand’s ready-to-wear and accessories for several months.
“After focusing on her daughter Greta, she wanted to get back to work but without her name coming out, she wanted to stay behind the scenes and work with the team. But she’s been there since January and she is also a shareholder in the company,” contended one source. “This is not a gig, she is under a multiyear contract.”
After exiting Gucci in 2014, Giannini kept a low profile and eased out of the fashion world. Last year, the designer made a brief comeback to fashion for a humanitarian project in partnership with retailer OVS for which she created a Christmas capsule collection of sweaters to benefit the nonprofit association Save the Children, which she joined as a member of the board in 2017.
Golden Goose did not comment on the speculation on Monday, highlighting how the collections are designed by a group of “in- house collective creative minds or consultants.”
The brand is helmed by chief executive officer Silvio Campara and the role of chairman is held by Patrizio di Marco, who is Giannini’s husband and the father of Greta. The couple worked together at Gucci, as di Marco was that brand’s chairman and ceo before Marco Bizzarri. He joined Golden Goose in September 2018, succeeding Marco De Benedetti, who remained a director and who is managing director and cohead of Carlyle’s Europe Buyout group, the label’s parent fund. One source said it was actually Campara who hit it off with Giannini and convinced her to return to work.
Sources told WWD that a “teaser dossier” has been presented to potential bidders and that seven to eight companies have shown some interest. These range from PVH Corp. and Permira to Advent and Ralph Lauren Corp., according to sources. Tapestry Inc., parent of Coach, Kate Spade and Stuart Weitzman, has also expressed interest, one source said.
To be sure, Golden Goose relies on a loyal customer base and its 2019 revenues are expected to reach $300 million, up from $205 million in 2018. Earnings before interest, taxes, depreciation and amortization are forecast to reach around $90 million in 2019, an increase from $51 million last year. According to a source, the plan is to reach sales of $510 million and EBITDA of around $160 million in 2022.
“That plan was made without taking into account the injection of accessories and ready-to-wear, the opening of stores and the proprietary online store — it was based only on organic growth,” the source noted. Sneakers are the brand’s core business and account for around 80 percent of sales. Online is expected to account for 10 to 15 percent of sales in two or three years.
With a potential multiple of between 13 and 14 times the EBITDA, Golden Goose’s enterprise value could reach between $1.4 billion and $1.5 billion in any potential sale, the source said.
The U.S is a strong market for Golden Goose and Carlyle also could be exploring an initial public offering on Wall Street, another source said. That would be the usual practice for private equity players seeking to realize their investments, since most engage in a dual-track process that examines an ipo and a sale at the same time — opting for whichever would give the biggest payout.
Any sale of Golden Goose would be a quick turnaround for Carlyle, which acquired the Marghera, Italy-based company in 2017 from Ergon Capital Partners and Zignago Holding SpA, controlled by the Marzotto family, as well as the company’s founders and management team.
Ergon acquired a majority stake in Golden Goose in 2015. Style Capital held a minority stake in the Italian brand, which was founded by creative directors Alessandro Gallo and Francesca Rinaldo.
In February, Campara told WWD that the goal was to continue to expand at a 30 percent organic clip. Revenues almost doubled since the acquisition of Golden Goose by Carlyle in 2017, from 100 million euros in the 2016 fiscal year. When it was acquired, Golden Goose was valued at 420 million euros, with EBITDA of 32 million euros. Since March 2017, the company has opened 50 stores, reaching a total of 58 last year, and the brand is available at around 900 wholesale accounts. Wholesale accounts for 60 percent of sales.
While Golden Goose achieved much of its success with the Superstar sneaker, which offers 400 variations in one year and still accounts for 35 percent of the total business — or 55 percent of the sneaker business, which in turn represents 85 percent of total sales — the brand now offers total look collections for men and women. The women’s division accounts for 70 percent of sales.