In April this year, Italian fashion house Roberto Cavalli agreed to sell a 90 percent stake to the Italian private equity firm Clessidra. The deal, which is estimated to have cost less than $1 billion, follows some other large private equity/fashion deals – most notably, Blackstone taking a 20 percent share of Versace, and Carlyle investing in Ski jacket manufacturer Moncler.

So has the private equity industry, which for a long time shut out fashion, finally embraced the rag trade? 

Well, it would perhaps be wise for it to do so: the luxury market has near doubled in size from around €128bn in 2000 to roughly €224bn in 2014

This growth has been driven by international tourism and a growing middle class. The luxury car market, for example, is up 10 percent from 2013; luxury hotels have seen demand rise by nine percent; and fine wine is growing slowly but steadily.

When it comes to fashion, which, in Italy, experienced growth for the first time in two years, many consumers are starting to favour smaller, independent brands, rather than mega-brands such as Gucci and Luis Vuitton. And this has had an impact on invest patterns.

This shift in consumer preferences has given the financial market confidence to invest in midsized luxury companies, as well as big groups. And this has been accompanied by a shift in the approach many private equity firms are taking to investments in the fashion industry.

Whereas previously private equity firms may have expected three-year turnarounds (as they expect from other industries), they’ve now discovered the returns in fashion investments are more interesting when viewed over seven to 10 years.

Do you think the big private equity/fashion deals mark a milestone for both industries?

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