Arabian Gulf investors have been out on a shopping spree for luxury fashion brands – and it’s a trend expected to continue for many seasons to come, analysts say.
Two major deals emerged on a single day last month, marking the latest in a string of fashion forays by regional investors.
Luca Solca, the head of luxury goods research at the investment firm Exane BNP Paribas in Switzerland, said “we have just seen the beginning” of such investments from the Gulf – despite a recent slowdown in the global luxury sector.
Bahrain’s Investcorp on June 21 said it had bought a majority stake in the Italian menswear company Corneliani, valuing the group at US$100 million. On the very same day, it emerged that the Qatari fund Mayhoola for Investments had agreed to buy Balmain, the French fashion house powerful enough to lure celebrities such as Beyoncé and Kim Kardashian to its parties.
“Gulf investors have identified fashion and luxury as an area of opportunity,” said Mr Solca.
“I don’t think these are trophy assets. Rather, I see these brands as relatively small. Their acquisition [is] a bet on their potential growth, given appropriate management and resources.”
It is not the first time Investcorp and Mayhoola have ventured onto the catwalk when it comes to their investment strategies.
Investcorp is a former investor in luxury brands such as Tiffany and Gucci and currently has Dainese and Georg Jensen in its portfolio.
(Read more at The National)