French-based luxury conglomerate Kering Group has acquired a 30 per cent stake in fashion house Valentino from Mayhoola for €1.7 billion (US$1.86 billion).  

The company said the deal is part of its broader strategic partnership with Mayhoola, which could lead to Mayhoola becoming a shareholder in Kering. The acquisition, expected to close by the end of this year, also includes an option for Kering to acquire 100 per cent of the share capital of Valentino no later than 2028. 

Valentino has 211 directly operated stores in about 25 countries, reporting a €1.4 billion in revenue last year with an EBITDA of €350 million. 

“Under our stewardship, Valentino has strengthened its foundations as a highly desirable luxury brand and we will keep reinforcing the brand in the next chapter with Kering,” said Rachid Mohamed Rachid, CEO of Mayhoola and chairman of Valentino. 

The deal follows Kering’s acquisition of a 100 per cent stake in luxury fragrance brand Creed for $3.83 billion last month. The group also announced its major management shuffling last week, including the department of Gucci’s president and CEO Marco Bizzarri. 

The French luxury group has reported a modest 2 per cent increase in revenue during the first half of this year, generating €10.1 billion ($11.1 billion).

While the group experienced solid performances in Asia Pacific, Japan and Western Europe, the growth was affected by a sales fall in North America. The flagship label Gucci recorded €5.1 billion in sales during the first half of the year, up 1 per cent on a comparable basis. 

“In the first half, we pursued our investment in our houses’ desirability and exclusivity,” said Francois-Henri Pinault, chairman and CEO at Kering. “While engaging in critical forward-looking initiatives, we maintained a high level of profitability.”

Net income attributable to the group was €1.8 billion for the period.