Sensational: Stroili for sale, as happened two years ago with Bulgari and as it was last year with Pomellato. And while waiting for a buyer to buy the company, Stroili is preparing to expand abroad, with one hundred new jewelry stores in Russia and China. The weekly magazine «il Mondo» reports the news. We offer you the article by Daniela Polizzi and Carlo Turchetti
From «il Mondo»
The sums will be drawn within a couple of weeks, with the results of Christmas sales and ongoing promotions, a key step for the preliminary budget of the Stroili group and its network of 370 jewelry stores. Then CEO Maurizio Merenda and the board will select the advisor who will have to evaluate the future options for the largest Italian retailer of precious metals in the hands of the private equity Investindustrial (31% indirectly), 21 partners and Wise (10% each) plus Intesa Sanpaolo (12%), i.e. the consortium that eight years ago joined the previous partners L-capital (6.6%) and Ergon (2.4%). The strategic review will examine the market opportunities: alliances, merger with another retailer, sale to a big name in the sector or to another buyout fund. There is not yet a formal assignment but a short list of investment banks that have so far presented ideas and credentials. And among these, the hypothesis of a mandate to Lazard stands out, already introduced in the Stroili world with some suggestions incorporated into the 2017 industrial plan.
Of course it will not be a flash sale because jewelry retail is going through a phase of reflection throughout Europe. And because Merenda wants to first accelerate the path that will lead the group to gain positions abroad. Today Italy accounts for 95% of the approximately 220 million in revenues, in line with 2012, and this is not the best way to attract international investors and obtain advantageous value multiples. The priority is therefore to shift the weight abroad, bringing revenues to 15-20% of the total. And this means putting on the track one hundred new jewelry stores in China (currently Stroili has only six), Russia (one) and other Eastern European markets. The key to speeding up the repositioning will be master franchising agreements with chains of commercial malls and retail specialists, capable of guaranteeing attractive locations in the commercial arteries of many cities. The other lever will be wholesale for the brands Stroili Oro, Franco gioielli and Exx. Italy will absorb only a small part of the new investments, completing the network up to 390 stores. Between Milan and Udine, the two Stroili locations, the recurring word is “discontinuity”, a term shared by Merenda, the board and the shareholders, even with different accents and sensitivities on how to translate it into practice. And this means a change of pace on foreign markets, commercial strategy, products, store concepts in order to increase profitability (today the EBITDA is at 15-16% of revenues) and the climb to higher multiples, which reflect a more attractive mix. And therefore a hopefully advantageous way-out for the group that eight years ago invested 130 million in equity with 70 between bank loans and mezzanines. Today the group’s numbers have doubled and so has the possible valuation. It will depend on investors’ appetite for a business that replicates the Zara model in jewelry in terms of price, restocking and fashion content. Among the natural candidates for an aggregation with Stroili are, for example, two names. The first is Histoire d’Or, the largest chain in Europe of jewelry for all budgets, 540 stores and 344 million in revenue, born in France with branches also in Italy and Portugal. Bridgepoint has controlled it for over three years and in the past it evaluated an investment in the Italian competitor, without going ahead. The other name is Oro Vivo, based in Geneva and 170 jewelry stores in Switzerland and France, part of the Christian Bernard goldsmith group controlled by the Butler Capital fund and participated in by the founder Bernard Nguyen. Daniela Polizzi and Carlo Turchetti
