EXO Exor NV

By Matthew Dalton 

PARIS -- Christian Louboutin, the high-price stiletto brand known for its red soles, is selling a 24% stake to the investment firm controlled by Italy's Agnelli family, in a deal that values the French company at EUR2.3 billion, equivalent to $2.73 billion.

Exor NV, controlled by the heirs of industrial magnate Gianni Agnelli, will pay EUR541 million for the stake in Christian Louboutin, the two companies said Monday. The brand is based in Paris and has 150 boutiques around the world.

The deal gives one of the most recognized names in luxury footwear an infusion of capital to expand its operations, particularly in China. For Exor, the investment is part of a push to grow in luxury goods, a spokesman said. The investment firm, led by John Elkann, a grandson of Mr. Agnelli, is also the controlling shareholder of luxury sports car company Ferrari NV. Exor's biggest holding is auto giant Stellantis NV, which owns Fiat and Peugeot among other brands.

Christian Louboutin founded his eponymous brand in Paris in 1991 with a small salon. The Franco-Egyptian designer quickly attracted a roster of celebrity clientele for his stilettos, including Sarah Jessica Parker and Gwyneth Paltrow.

The investment is the first time a public valuation has been attached to Christian Louboutin, showing it is as one of the biggest high-end brands that has yet to be scooped up by luxury conglomerates such as LVMH Moët Hennessy Louis Vuitton SE or Kering SA, the parent of Gucci. LVMH earlier this year sealed the biggest deal ever in the luxury industry with its $15.8 billion purchase of American jeweler Tiffany & Co.

"I have admired over the years Christian's talent in creating one of the world's great, independent global luxury brands," Mr. Elkann said.

Christian Louboutin over the years has expanded into a number of other product categories, from menswear to handbags.

But the soul of Christian Louboutin remains the red sole. As Christian Louboutin has grown, the brand has waged legal battles to protect its distinctive color from imitators. A U.S. federal appeals court in 2012 ruled that Christian Louboutin was entitled to trademark protection for the color -- which the brand calls China Red -- if it is used just on the sole. But the court rejected an effort to block Yves Saint Laurent from selling a monochrome red shoe.

The European Court of Justice ruled in 2018 ruled that the color could be protected in the European Union. That decision led to a Dutch court ruling that the shoemaker Van Haren couldn't make a red-soled shoe.

The investment comes as Exor has sought to use its expertise in Ferrari and Mr. Elkann's connections to expand in luxury goods. In December, Exor and Hermès, the French luxury handbag company, jointly invested in Shang Xia, a Chinese luxury goods company. Exor invested EUR80 million as part of the deal.

Write to Matthew Dalton at Matthew.Dalton@wsj.com

(END) Dow Jones Newswires

March 08, 2021 14:25 ET (19:25 GMT)

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