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Roberto Cavalli Calls Off Sale of His Label

July 8, 2008

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Designer Roberto Cavalli announced today that he will not be selling his namesake label due to bad market conditions.  In an interview with Il Sole 24 Ore, an Italian financial paper, Cavalli said that the worth of his company based on current earnings multiples were short of his goals for the year. The designer said the possibility of a sale of the label will not be an option before 2009.

“The timing is not ripe yet for such a step. What’s more, as I have already said a thousand times, we don’t need [to sell],” Cavalli said in the Il Sole interview.

Merrill Lynch, which was advising on the sale, valued the company at 1.4 billion euros, or $2.19 billion at current exchange — almost 17 times earnings before interest, taxes, depreciation and amortization of around 84 million euros, or $115 million at average exchange, in 2007.

Luxury and fashion companies listed in Europe are trading on average on an EV/EBITDA multiple of 8.9.

“A year ago, [the banks] spoke to me about certain numbers, which today have vanished with the stock market crisis,” Cavalli told Il Sole. “I’m not selling for 800-900 million [euros].”

Candover, Carlyle, Doughty Hanson, Lion Capital, and Texas Pacific were some of the private equity funds that were expected to bid in the auction for the Roberto Cavalli label next week. [WWD]
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