Reuters
Reuters(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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SHOE FITS. When it comes to stock-market fashion, Diego Della Valle’s loafer-maker Tod’s has been downright dowdy, declining a third over the past five years compared to puffy-jacket manufacturer Moncler’s 250% surge. But the shoe is on the other foot of late: Tod’s turnaround hopes have propelled the shares nearly 40% higher this year while Moncler has languished.
LVMH’s purchase on Thursday of 6.8% of Tod’s from Della Valle, building Bernard Arnault’s conglomerate’s stake to 10%, follows the investor-titillating appointment of Instagram celeb Chiara Ferragni to its board two weeks ago. Moncler meantime reported first-quarter results which emphasised its dependency on the lockdown-stricken European market.
It’s understandable that Tod’s long-suffering shareholders would find succour in LVMH’s interest. But given Arnault’s penchant for creeping control, nickel-and-diming and browbeating his targets into submission – on full display in last year’s Tiffany deal – investors should be wary. To wit: LVMH snagged its latest Tod’s stake at a 10% discount. Caveat emptor lux. (By Rob Cox)
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