hnnhcronin There are three big luxury conglomerates: LVMH, Kering, and Richemont. But there may be a new name to add to this list–the Qatar-based Mayhoola. Mayhoola is the investment fund of the royal family of Qatar. Mayhoola’s portfolio consists of Italian fashion house Valentino, British handbag company Anya Hindmarch, Italian menswear brand Pal Zileri, and its most addition the French high fashion brand Balmain. The most successful and renowned luxury conglomerates have arisen from western Europe, but this company from an emerging market has made an impressive number of significant acquisitions since it first acquired Valentino in 2011. Qatari investors see growth prospects with fashion and luxury brands and share similar visions about the future of the two industries.
Mayhoola reportedly acquired Balmain for 500 million euros and was faced competition from European and American investors and private equity firms. Balmain, a company who was on the brink of bankruptcy just a decade ago, has become one of the most sought-after brands due to its strategy of attracting two very distinct target markets: the hip millennials and the wealthy. Balmain’s strides with the younger generation come from its impressive social media presence, popularity among celebrities, including the Kardashians and the supermodel sisters Bella and Gigi Hadid. Additionally Balmain’s collaboration with fast-fashion chain H&M has broadened its appeal to the younger consumers unable to afford the main-ticket items. Balmain’s decision to sell out to Mayhoola goes to show the expansion opportunities that the firm can offer high fashion brands. With Mayhoola’s help, Balmain has continued to open stores in growing economies and has developed a less expensive line of accessories in order to keep the millennial market interested.
Mayhoola’s other big brand, Valentino, is speculated to launch an Initial Public Offering to the Milan market sometime this year. Mayhoola plans to float at least 25% of Valentino’s shares. However, whether or not the brand chooses to become a publicly traded entity depends on the market conditions, which has experienced a great deal of volatility over the past week. Based on Valentino’s financial strength and relevance in the fashion world, Valentino is expected to become even more valuable once it is listed on the market, so taking the company public would increase Mayhoola’s financial relevance as well as establish a public value for Valentino, which can bring about great advantages. So far under the control of the Qatari company, one of Valentino’s co-creative directors Maria Grazia Chiuri left the company leaving sole creative director to Pierpaolo Piccioli in 2016. Together, the two modernized Valentino and built up its menswear and accessories collections. However, Mayhoola is confident that Piccioli’s vision and creativity will allow Valentino to continue to attract an international audience. In the seasons that he has been the solo creative director, Piccioli has capitalized on the glamorous take on casual wear and was recently named designer of the year for 2017.
In recent years, residents of Qatar have very high consumption of luxury goods, and this consumption is only projected to grow, making it a perfect place for a luxury conglomerate to be based. Qatar has the highest GDP per capita, and therefore one of the highest standards of living, of any country in the world, meaning that many Qatari have a certain level of wealth–wealth that they like to show off through luxury goods.
Tapestry, formerly known as Coach, as well as Michael Kors have also been trying to achieve similar conglomerate status to that of the European LVMH, Kering, and Richemont. Coach acquired shoe company Stuart Weitzman in 2015 and Kate Spade in 2017, while Michael Kors recently acquired the upscale shoe brand Jimmy Choo. While American brands like Coach are making attempts to become less accessible to the mass market and more luxurious, the ability of Coach (Tapestry) to achieve high end luxury portfolios like Kering or LVMH will take more audacious moves to acquire luxury legacy type properties such as Balmain. Because of the reputation of American brands as “accessible luxury”, a company like Mayhoola, with its growing portfolio of true European luxury brands, has a better chance of reaching worldwide success in the fashion industry
