Mayhoola Said Poised To Acquire Balmain

balmain fall 2016 sneaker
Balmain quilted high-top.
Courtesy Image.

PARIS – Olivier Rousteing, who is slated to show his spring 2017 men’s collection for Balmain on Saturday, may have new guests in the front row – the house’s new owners.

According to sources, Valentino parent Mayhoola for Investment is finalizing a deal to acquire the Paris fashion house. A deal could be disclosed as early as Wednesday.

Contacted by Fairchild, Balmain declined all comment. Mayhoola officials could not immediately be reached for comment.

Balmain is considered one of France’s hotter fashion properties, fueled by Rousteing’s va-va-voom designs, his rabid popularity on social media and his tight clutch of celebrity friends, headlined by the Kardashian clan.

Fairchild reported on Feb. 12 that the company was in play after a mandate to explore a sale of the company had been been given to Bucéphale Finance, a boutique mergers and investment firm in Paris founded by Jean Marc Forneri, who is also a director and shareholder of Balmain SA.

Sources suggested Spanish fashion and beauty firm Puig and private equity fund Eurazeo also looked at the dossier, along with unidentified American and Chinese contenders.

Late on Tuesday, French financial daily Les Echos, which has pegged the company’s revenues at 120 million euros, or $135.1 million at current exchange rates, said the majority stake could go for as much as 500 million euros, or $562.8 million.

The brand is seen having strong potential to expand its retail footprint, and capitalize on the buzz around it, fanned by Rousteing.

Balmain has 17 directly owned stores, concentrated in China as well as in Tokyo, Seoul, Hong Kong and Dubai.

It has also yet to make serious inroads with leather goods, a cash-cow category for most of Europe’s luxury fashion houses.

In an interview last April when it planted a flagship in New York, Balmain chief executive Emmanuel Diemoz said the company has been tracking an average of 25 percent sales growth the last three years.

Question marks about Balmain’s future ownership have hung over the house since December 2014 when Alain Hivelin, the company’s majority owner and the architect of its recent global expansion, died at age 71. Majority ownership passed to a family holding company. It is understood Hivelin’s principal heirs, his wife and three daughters, were not involved in the fashion business.

Several members of Balmain’s management board also own stakes, and it could not immediately be learned if all plan to sell their shares as they pilot the company through a profitable expansion phase. Besides Diemoz, other key members of management include Jean-François Dehecq, chairman.
Balmain’s niche positioning — with its showy and sexy ready-to-wear commanding nosebleed prices — and its extensive licensing were seen as barriers to attracting interest from Europe’s big luxury groups.

Meanwhile, Qatari investors continue to actively build their fashion, retail and real estate portfolios in Europe.

Mayhoola, said to be controlled by Qatar’s royal family, bought the Valentino fashion house in July 2012 and is a minority shareholder in the Anya Hindmarch accessories brand.

In 2014, it added a majority stake in Forall Confezioni SpA, which produces Pal Zileri and also holds licenses for Moschino and Cerruti 1881.

Pierre Balmain founded his Paris house in 1945 after design stints at Molyneux and Lucien Lelong, and became known for wearable, elegant clothes: safe and classic for day; extravagant for evening.

The late Oscar de la Renta was its last couturier, while subsequent designers, notably Christophe Decarnin, heated up the house with more audacious and racy styles, including strong-shouldered jackets, motorcycle jeans and heavily embellished minidresses. Rousteing has continued in that vein, winning fans around the world.

The term “Balmainia” was coined last November when H&M conscripted Rousteing for its annual holiday designer collaboration. Shoppers hoovered up the merchandise in minutes, with sources describing the tie-up as the Swedish fashion giant’s most successful to day.