Golden Goose SpA is an Italian maker of distressed-looking sneakers that can set you back $2,000 for a crystal-studded pair. The more than €2.5 billion ($2.9 billion) price its private equity owner just snagged for the business is more opulent than shabby, too.
Customisation at Golden Goose – Golden Goose
Permira’s sale to HSG, known formerly as Sequoia Capital China, with Singapore’s Temasek as a minority investor, is one of the few landmark exits from a troubled vintage of buyout deals struck as the world was emerging from the pandemic, just before interest rates spiked. The transaction- twice the size of Prada SpA’s purchase of Versace earlier this year- also comes at a time of depressed demand for luxury goods. The valuation may be less extravagant than what was mooted in an abandoned initial public offering 18 months ago, but the PE firm has roughly doubled the company’s value in five years.
It acquired most of Golden Goose from Carlyle for €1.3 billion in 2020. Investors balked at a €3 billion enterprise value in that doomed Milan IPO effort last year, pointing to the troubles of Dr Martens, another footwear company previously owned by Permira. A slowing market for top-end goods didn’t help after three years of blockbuster growth.
And yet, the worst luxury downturn since the financial crisis (excluding the pandemic) has been good for Golden Goose. As comfortably off but not superrich consumers reined in their spending, megabrands such as Louis Vuitton and Gucci went upmarket to follow the money.
As they concentrated on the 1%, they abandoned entry level products such as designer sneakers, leaving that market to Golden Goose. They also raised prices on shoes, handbags, and other core goods. The average cost of a basket of iconic luxury items in Europe rose by 54% between 2019 and the end of 2024, according to analysts at HSBC Holdings Plc.
For comparison, Golden Goose has lifted prices by just 4% over the past five years. That makes its sneakers, hardly a snip at an average price of €550 including customisation, look better value for money. The company increased sales from €266 million in 2020 to €655 million in 2024. Growth has continued this year, with sales up 13% in the first nine months and earnings before interest, tax, depreciation, and amortisation up 7%. Assuming similar momentum for the full year and a stable Ebitda margin, Golden Goose could generate about €740 million of sales in 2025 and close to €250 million of Ebitda.
The price equates to about 10 times Ebitda, a discount to Moncler SpA’s 13 times and Birkenstock Holding Plc’s 11 times, but still at least a doubling of Permira’s equity value. The firm will stay as a minority investor.
HSG previously backed Labubu maker Pop Mart International Group Ltd., TikTok owner ByteDance Co Ltd. and Chinese social media platform Red Note, so expansion will likely be focused on Asia. Golden Goose makes only 12% of its sales in the region, with just 7% in China, far less than most luxury brands. About half its sales are in the Americas; the rest in Europe and the Middle East.
There is clearly more to go for in China. With Gucci handbags and Chanel pumps no longer so prized, there is appetite for quirky items that connect emotionally with young shoppers. Take Crocs Inc.’s clogs, which can be customised with charms. They have become a hit with the country’s Gen Z consumers. That bodes well for Golden Goose.
Sneakers account for 90% of the company’s sales, so there’s room to diversify. Bags and clothing, which can also be personalised, are other opportunities in the US as well as China. Temasek’s experience as an investor in Stone Island, Ermenegildo Zegna NV, and Moncler chairman Remo Ruffini’s holding company should help. Ex-Gucci boss Marco Bizzarri will become chairman.
But hitting Golden Goose’s long-term target of lifting yearly sales to €1 billion won’t be easy. Although there are hopes that China’s luxury market is past the worst, any recovery will take time. And consumers there are more focused on sneakers that help them run faster or tackle more challenging hikes. Nike Inc. said recently that it was seen more as a casual fashion shoe brand, rather than a performance one, holding back sales and forcing it to discount prices.
Meanwhile, big luxury has decided it wants its middle-class customers back. Sneakers and similar goods will be key, bringing more competition.
If Golden Goose can successfully expand in China and become a broader lifestyle brand like Ralph Lauren Corp., its future will be far from scruffy. But given the travails of PE owners over the past couple of years, it’s not a bad time to take some money off the table.
Mothercare’s latest half-year results on Tuesday came just three months after it had reported its full-year figures, but we have no objection to companies reporting more promptly. So what did they show?
Mothercare
The brand owner said the 26 weeks to late September showed worldwide retail sales by franchise partners of £90.7 million, down 25% from £121.2 million, or a fall of 22% at constant currency.
This “largely” resulted from ongoing store closures in its Middle Eastern markets and the planned exit from Boots in the UK. On a like-for-like basis retail sales were down ‘only’ 6% on last year.
It made adjusted EBITDA of £0.8 million, down from £1.7 million, and the group adjusted loss from operations was £0.5 million, worse than the £1.1 million profit a year earlier. The adjusted loss before taxation was £1.1 million, narrower than the loss of £1.4 million this time last year. And the net loss narrowed slightly to £1.7 million from £1.8 million. The company’s net debt fell to £5.8 million from £17.1 million.
The sales fall came as in Middle Eastern markets a net 50 stores were closed in the 12 months to 27 September. These closures were as a result of the “region-wide reduction in footfall and resultant sales, driven by the continuing regional unrest and evolving consumer behaviour. However we do not expect any further significant store closures, as now that the majority of the old inventory has been cleared the profitability of our franchise partner is improving, despite the challenges currently facing retailers in the region”.
Big international deals
Also internationally, Mothercare said it’s made “significant progress” with both the India joint venture with Reliance Brands Ltd and the license agreement for Türkiye, with Ebebek Mağazacılık AŞ.
In October 2024 it announced the Reliance deal with an entry valuation of around £30 million for the South Asian region.
It retains a residual 49% shareholding in the new joint venture company covering Mothercare’s franchise operations in India, Nepal, Sri Lanka, Bhutan and Bangladesh, which was granted perpetual rights for the use of the Mothercare brand and related intellectual property in those regions.
For FY25, its retail sales in India had amounted to £18.6 million and contributed around £0.4 million to adjusted EBITDA. But in FY24 under the previous franchise arrangements those figures were ar £24 million retail sales and £0.9 million adjusted EBITDA.
That may seem like it’s going backwards but despite receiving revenues at lower rates than previously, it noted that “Reliance have recently confirmed their aspirations for the reinvigorated business to significantly grow revenue levels, and we believe it is possible for them to grow their retail sales to around £300 million in five years, supported by a store opening programme targeting 50 new stores in the region in 2026. We also expect to benefit from both sourcing fees (supplying the joint venture with product) together with the value creation accruing to our residual 49% equity stake”.
As for the Türkiye deal, that was announced in June this year. Its partner Ebebek has some 280 stores and an online business producing revenues of around £400 million together with three stores recently opened in the UK. The license agreement gives Ebebek the exclusive right to use the Mothercare brand in Türkiye on products either designed and sourced by Ebebek or Mothercare for a period of 10 years.
It also allows Mothercare to purchase products Ebebek has sourced for itself, either under its own brands or Mothercare, for sale by its franchise partners outside of the territories where Ebebek trades and to rebrand these products with the Mothercare brand if relevant.
Ebebek is launching Mothercare products in-store imminently, with the full range available in the spring. And it has “expressed interest in extending the relationship to other territories”.
While the headline numbers in the half-year report didn’t look great for the brand, there were obvious signs of improvement in some areas, especially those international deals.
And Clive Whiley, chairman of Mothercare, seemed happy enough. He said: “Mothercare is making good progress against our strategic priorities. After the strategic and operational challenges of the last few years, our performance in the first half shows that Mothercare has been stabilised as a smaller and cash generative business with greatly reduced debt. Our new partnerships with Reliance in South Asia and Ebebek in Turkey are now bearing fruit, underlining the intrinsic value of and opportunity for our brand.”
From this position of “relative strength”, he noted that the key focus for 2026 is to “pursue options to rebuild our scale and operations both in the UK and globally, alongside pursuing the refinancing of our existing debt financing facilities. This is an exciting prospect for our partners, our colleagues and all our stakeholders as we look towards the new year and those opportunities ahead”.
Indian textile and apparel business Suditi Industries Limited plans to raise Rs 58.87 crore through a combination of equity shares and warrants to expand its children’s apparel and lifestyle brand Gini & Jony.
Denim by Gini & Jony – Gini & Jony- Facebook
“The Indian kid’s wear market presents a once-in-a-generation opportunity,” said Suditi Industries’ chairman and managing director Pawan Agarwal in a press release. “With Gini and Jony’s legacy, national footprint, and emotional connection with Indian parents, we are uniquely positioned to build a truly integrated ‘everything kids’ super brand. This fresh capital, combined with the experience and strategic depth of our incoming investors, enables us to accelerate growth while staying focused on our long-term vision- to be a trusted partner in every mother and child’s journey across the country.”
Keen to evolve into a vertically integrated kids’ retail business, the company will use the capital infusion to support its ambitious expansion plans for Gini & Jony. These include omni-channel retail expansion, deepening its product categories, and building a scalable backend infrastructure.
Participants in the funding round include Edelweiss co-founder Venkat Ramaswamy, former GlobalBees CEO Nitin Agarwal, Capwise Financial Services founder Naresh Biyani, and Rajesh Palviya among others. They join existing investors including Dream Sports’ chief marketing officer Vikrant Mudaliar and Third Wave Coffee co-founder Sushant Goel. The funding round was both led and advised by Capwise Financial Services Private Limited, which also took part as an investor.
“Building a modern consumer brand today demands excellence across technology, supply chain, data, marketing, and governance,” said Gini and Jony’s CEO Harsh Agarwal. “We are fortunate to have seasoned operators and founders as investors and advisors who have scaled businesses in exactly these areas. Their collective experience will help us compress learning cycles, sharpen execution at scale, and institutionalise governance frameworks befitting a market leader.”
Nestle views its stake in L’Oreal as a financial investment, and while it is regularly reviewed, there is nothing new to report on the matter, Nestle CEO Philipp Navratil was quoted as saying on Tuesday.
Nestle has a stake in L’Oréal – L’Oréal
“This stake is a financial investment for us,” Navratil told Swiss newspaper Finanz und Wirtschaft in an interview, when asked about the stake. “We review it time and again with the board of directors, but there’s nothing new to say.”
Navratil, who took the helm in September after a period of unusual turmoil at the company, said Nestle intended to reach its goal of 4% organic growth as fast as possible.
“I’m not asking myself what else we need to acquire. What we need are innovations to accelerate growth,” Navratil said. Nestle is sticking to plans to review its water business- for which it is looking for a strategic partner- and its mainstream vitamins and nutritional supplements division, Navratil added.
“We’re working to finalise these deals as quickly as possible, but also with the right details. Both are complex separations,” he said.
The CEO said the planned divestitures would help reduce Nestle’s debt levels, noting the firm is also reviewing its balance sheet to see what other measures are possible. Ideally, Nestle wants to bring cash flow back towards 10 billion Swiss francs, Navratil said.
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