“We are buyers, not sellers,” said Tod’s chairman and CEO, Diego Della Valle, on Tuesday. Speaking at the 2018 Milano Fashion Global Summit, Della Valle brushed off speculation he was setting in motion a possible sale of the Tod’s brand.
Della Valle said this rumor is “recurring,” but “if we really had to do an operation, it would be to buy, not to sell.” To further support his involvement, Della Valle emphasized the steps taken to turn around the company and “prepare it for the next 10 years, when we will surely be attentive to new consumers, but carefully avoiding going overboard in chasing trends. We must not lose sight of who we are.”
The entrepreneur addressed rumors set off by speculation on a reorganization of his holdings, which would isolate his 50.3 percent stake in Tod’s under the Di.Vi. Finanziaria vehicle. This also controls activities ranging from real estate to media, including a stake in RCS MediaGroup, which are said to be spun off into a new holding called Di.Vi. Immobiliare Holding. Della Valle also has a 9.6 percent stake in Tod’s through another holding, the Diego Della Valle & C.
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The rumors were further fueled by Equita analysts, who believe the restructuring is preparatory to a future sale of Tod’s. On Tuesday, analysts at Fidentiis said that Della Valle could be working on fiscal efficiency with the new distribution of shares, and that if a sale were to take place, it would not happen in the short term, as Della Valle is restructuring the company to return to growth.
The rumors helped lift Tod’s shares, which in midafternoon rose 2 percent to 52.3 euros ($60.6), despite Della Valle’s denial at the summit, after a morning peak at 52.6 euros, up 2.4 percent. Shares closed up 3.12 percent at 52.9 euros.
As reported in February, the Italian luxury group is overturning its business model and launching a new project called Tod’s Factory, in a reference to Andy Warhol. Employing a system mirroring the streetwear drop, the company is to release a mix of capsules and limited editions in collaboration with designers and friends of the house. Last month in Paris, Tod’s unveiled a capsule collection with Alessandro Dell’Acqua, which will hit stores in mid-November.
Last year, Della Valle also refuted speculation he was stepping aside, following a management restructuring at Tod’s, which also saw the arrival of new CEO Umberto Macchi di Cellere.
As reported in August, currency fluctuations affected the performance of Tod’s SpA in the first half as the Italian luxury group reported a 2.8 percent decrease in net profit to 33.7 million euros, from 34.7 million euros in the same period last year, but Della Valle said he was “confident” in the group’s performance in the coming months and said he believed it “will achieve good results in the current year.” Sales decreased 1.3 percent to 477 million euros, from 483 million in the first six months last year. At constant exchange rates, sales grew 1.8 percent. “Today’s results are a first validation that the strategy, announced during the last Investor Day, is beginning to work; at constant exchange rates, both Tod’s and Roger Vivier’s revenues have returned to growth,” Della Valle said at the time.
In the six months ended June 30, sales of the Tod’s brand decreased 3.4 percent to 256.2 million euros. At constant exchange, they inched up 0.1 percent. The label recorded positive results in its retail network in the second quarter of the year, which offset the weakness of the wholesale channel.
At the summit, Della Valle touched on different subjects ranging from avoiding being conditioned by the stock market every quarter to politics. “This government is supported by 60 percent of the population. Let’s see what the politicians will do, and then we can judge them. They have such a large consensus. I think if I were in their shoes, I would cut back on the slogans and take the time to stay in the office and think.”
Asked about his decision to hire Italy’s former GQ and Rolling Stone editor in chief Michele Lupi as Tod’s first men’s collections visionary, effective Dec. 1, Della Valle said “we have become communicators of ourselves. When you have a site, you talk to millions of people. We are no longer brand managers but editors in chief. In building brands, communication is important. Product and communication square off and perhaps communication wins eight to two.”
Without naming any specifically, Della Valle emphasized that “there are successful brands that are no longer what they were,” and he wondered how long that success will last. “We are adapting, but we must not forget who we are. I don’t want to lose that, even if Lady Gaga wants my boots in Canton [now known as Guangzhou, China]. We must guide and defend our brands and drive the persuasion of consumers.”
He also spoke of the We Italians project, which will help employees, the territory and the country, including the group’s support of La Scala, the Colosseum and building a new manufacturing plant for Tod’s in the town of Arquata del Tronto, hit by a devastating earthquake in 2016.
This story was reported by WWD and originally appeared on WWD.com.