Under the terms of the agreement, Gucci Group will acquire a 66.67% interest in Bottega Veneta through a capital increase of Lit 200 billion ($96.2 million) and the purchase of shares from the current shareholders for Lit 126 billion ($60.6 million). The current shareholders will retain the balance of the share capital. The capital increase will be used to accelerate the development of the Bottega Veneta brand globally.
Bottega Veneta was founded in Italy in 1962 and rapidly became known for the high quality of its leather products, particularly its luxury “Intrecciato” woven leather handbags and accessories.
All of the company’s design and production activities are based in Italy, in the Vicenza and Milan areas. The company’s consolidated sales for 2000 were approximately Lit 100 billion.
Vittorio Moltedo will remain as Chief Executive Officer of Bottega Veneta and will become Chairman of the company’s Board. Laura Moltedo will continue in her role as Creative Director.
Gucci Group will work with Bottega Veneta’s management to develop the brand’s penetration in all of the major luxury markets, through a mix of directly operated stores in key locations and selected luxury wholesale channels.
Bottega Veneta currently operates directly 12 stores in the United States, 5 in Europe and 4 in Asia, while its Japanese presence is currently managed by a third party distributor. As part of the agreement with Gucci, this distribution arrangement will be terminated on 30 June 2001, at which point Bottega Veneta will take direct control of the distribution and marketing of its products in Japan, including the operation of 19 stores.
Domenico De Sole, President and Chief Executive Officer of Gucci Group, said: “Bottega Veneta is a luxury brand with a wonderful heritage based on high quality leather accessories and shoes - products that fit neatly with our own core areas of expertise and that can generate high margins.
Since Bottega Veneta was founded in the 60’s, the image of the products has always been maintained at the highest level and the company has never granted licences or otherwise diluted its brand. Together, we have all the skills and resources needed to boost Bottega Veneta’s presence and recognition in all the key markets worldwide. We look forward greatly to working with the Bottega Veneta team.”
Vittorio Moltedo, Chief Executive Officer of Bottega Veneta, said: “With the support of Gucci Group, we have already regained direct control of the Japanese market and we are confident that in the future we will be able to take other important strategic initiatives more quickly and extensively than we could have on our own.
We are delighted with our new partnership, and look forward to taking the Bottega Veneta brand to the next stage in its development.”
Gucci Group noted that it expected the transaction to have a neutral impact on its 2001 earnings per share (before goodwill and trademark amortisation) and to be accretive thereafter. The transaction will give rise to annual goodwill and trademark amortization of approximately 4 cents per share.
Gucci Group N.V. is one of the world's leading multi-brand luxury goods companies.
Through the Gucci, Yves Saint Laurent, Sergio Rossi, Boucheron, Roger & Gallet and BÉDAT & Cº brands it designs, produces and distributes high-quality personal luxury goods, including ready to wear, handbags, luggage, small leather goods, shoes, timepieces, jewelry, ties and scarves, eyewear, perfume, cosmetics and skincare products. The Group directly operates stores in major markets throughout the world and wholesales products through franchise stores, duty free boutiques and leading department and specialty stores.
The shares of Gucci Group N.V. are listed on the New York Stock Exchange and on the Euronext Amsterdam Stock Exchange.
