Category Archives: Luxury acquisition

Italy-Qatar invest 4bln euro in joint business venture ‘ IQ Made in Italy’

ROME, NOVEMBER 19 – The Italian Strategic Fund (ISF), controlled by the CDP and Qatar Holding (QH) signed an agreement today for the establishment of a joint venture called ‘IQ Made in Italy’.The ISF and QH pledged 4 billion euro to the project over the next four years with an initial installment of 300 million euro. The agreement was signed during Mario Monti’s visit to Qatar today.According to a statement IQ Made in Italy Venture will invest in Italian businesses operating under the ‘Made In Italy’ umbrella. These include food production, fashion, design, tourism and lifestyle. ßß”By combining the local know-how of the FSI with the global comprehensive knowledge of QH, the venture is able to provide companies with a unique set of skills that enhance growth processes” said the CDP, a joint-stock company under public control.

The FSI and QH will run IQ Made in Italy with joint governance.

“This first accord with Gulf investors is of great importance for the whole group”, said CDP President Franco Bassanini, “because it will foster the development of other co-investment deals with both the IFS and other instruments of the Group”. “We are really pleased with the accord with a partner of high quality”, said IFS President Giovanni Gorno Tempini.

“The joint venture shows how certain sectors of the Italian economy can be tempting for foreign investors who understand the potential for global expansion”, he added. Italian Premier Mario Monti on Monday said he is satisfied with Italy-Qatar cooperation. ”It is multiform, with a great deal of commercial relations in both directions, and which today are moving on the investment front,” the premier said.

The premier also voiced his satisfaction at the signing of a joint venture agreement between Italy’s Fondo Strategico Italiano (FSI) and Kuwait’s Al Qurain Holding Company (QH). ”Corporate governance is equal, and the Italian part assumes a good finalization of these investments,” the premier said. He used this example to point out that anyonw who thinks foreign acquisitions in Italy are a way to sell out ”is making a huge mistake.” (ANSAMed)


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E-Commerce in Saudi Arabia: Driving the evolution, adaption and growth of e-commerce in the retail industry

Report by Sacha Orloff Consulting Group

Author: Alexandra de Kerros Boudkov Orloff

Full report download: E_Commerce in Saudi Arabia_Driving_The_Evolution_Adaptation_and_Growth_of_ecommerce_in_the_Retail_Industry_SOCG_2012June

Should Saudi Arabia build on the impetus that has been created through the adoption of e-government, a domino effect would trickle down into the private sector and consumer behaviour, with a wide spread of e-commerce penetration. This would create new economic opportunities and enhance the technological innovation capabilities of businesses providing enhanced competitiveness in domestic and international markets.

The Report “E-Commerce in Saudi Arabia: Driving the evolution, adaption and growth of e-commerce in the retail industry” highlights the steps which need to be taken to support the adoption and diffusion of the e-commerce model in Saudi Arabia. Key findings demonstrate that the current spread of e-commerce has been hampered by specific socio-cultural business traits which inhibit the risk-taking characteristics of enterprises. These traits are characterized by a need to implement proven business models;   reduce the risk of failure and an aversion to adopt a business model which may not be suitable to current consumer habits. Moreover, the sluggish uptake of e-commerce technologies by major competitors continues to prove detrimental to the spread of e-commerce.

Saudi Arabia needs to take the lead in driving its retail and e-retail growth, consequently to enforce its position as a key retail business hub in the region with national and foreign direct investment, and technical expertise to drive growth, innovation and positive business confidence.

Opportunities are emerging for private sector firms in Saudi Arabia to address numerous pressing challenges to the adoption of e-commerce solutions. A clear focus on change management processes, innovation, and bridging the talent-gap must be prioritized to ensure the widespread growth of these new channels.

1.     Introduction
2.     Saudi Retail Sector Overview
3.     ICT adoption and penetration in KSA
4.     Emergence and growth of e-government and e-commerce
5.     Challenges and barriers to e-government
6.     Enablers to e-government
7.     Challenges and barriers to e-commerce
8.     Enablers to e-commerce
9.     Online Customer behaviour and intention in Saudi Arabia
10.   Case study – eXtra iconic retailer but non e-conic success story
11.    Conclusion

©Sacha Orloff Consulting Group – all right reserved – June 2012

Also in Arab News – June 21, 2012 – Despite challenges, KSA ripe for e-commerce in retail industry


Filed under Consumer, eCommerce, Luxury acquisition, Luxury Middle East, Report, Saudi Arabia, Study

Luxury-goods makers are racing into China

September 2011 – The Hong Kong Institute of Certified Accountant has published a relevant article on Chinese Luxury Business. This article is for a broader audience of professionals; especially for valuers and investors looking to assign a number to a luxury brand’s name.  Sacha Orloff is quoted in the following article, and would like to add other significant points, which we believe to be relevant below:

By Alexandra Orloff

The Chinese purchasers of luxury brands differs from those elsewhere

The Chinese purchaser differs from any other consumers due to its history of luxury consumption in China. This factor remains profoundly rooted into China’s cultural and sociological landscape. If one goes back few decades ago, during the Cultural Revolution there was a void in the luxury culture, however the same generation would purchase products, nevertheless their taste would be less than subtle and would be a mimic of the western signs of richness and power.

Now that social classes have reappeared, the strong desire of the Chinese constumer is to pursue his dreams of certain grandeur through the embedded tastes of their western counterpart; these principles influence strongly their purchases, thinking that their value system can be
leveled to the Western one. However, these scaled values have to compromise between their own traditional Chinese values, the socialist values and the western values regarded as the trend to follow in order to be seen as modern achievers, successful in their own society and worldly travelled. They still have to find peace and equilibrium between their own society and their personal display of wealth and status recognition inside China.

There are particular difficulties in measuring the value of luxury brands in China , after all, brands that do not command a premium in the West, such as Marks & Spencer, Wrangler and Buick, are considered chic in China

It has been demonstrated that 13 million households in China’s upper middle class offer the biggest new growth opportunity, thus accounting for approximately 12 percent of the market. For the western luxury brands, this new customer segmentation has a higher quality of life. The upper middle class population is capable to acquire luxury products.  It might be a mistake on luxury brands to try mould and refined the Chinese customer to their own standard of taste; a great effort should be put in understanding the Chinese mentality to gain their loyalty. One important point also, is that the Chinese consumer is relatively young compare on average of their counterpart in Europe, Japan and other old economies.

All depends of the perception of luxury; in my views, the Chinese consumer enjoys the thought of buying and acquiring luxury brand products, they are prepared and willing to show off their purchasing power, but they lack the know-how to leverage brands to create a sophisticates lifestyle. Now in the Chinese luxury market, with its rapidly increasing incomes, and a great access to internet, there is a wide display, choice and information on available luxury products.  I believe than a larger number of Chinese consumers feel comfortable buying all sorts of products which in their eyes are consider as being luxury. A certain refinement has to be acquired by this new upper middle class; only time will tell if the West should not drastically change their own perception to be lined up for the Chinese market.

There is something  unusual about the way Chinese consumers approach brands, compared with the West

With a high number of luxury stores, fashion magazines, websites and other use of social media, the Chinese consumer is extensively familiar with a larger number of brands and becomes more aware of the world of luxury goods and brands. In this process of time vs. awareness, the Chinese consumer becomes savvier about the relationship between quality and price. It is a matter of time before their knowledge of refinement will be intensified to the same level of their counterparts in the old Europe.





George W. Russell reports

Luxury-goods makers are racing into China, but the intangible nature of brands – especially on the mainland – spells trouble for valuers and investors looking to assign a number to a name

When Italian luxury-goods company Prada made its initial public offering in Hong Kong in June, it was an unabashed bid to court Asian, and especially Chinese, investors. “An IPO’s location represents the market where we’re heading,” Prada’s chief executive, Patrizio Bertelli, said before the listing.

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Al-Futtaim planning $500m of acquisitions in Middle East

©Sacha Orloff | May 2011

by Rorry Jones

Al-Futtaim Group, one of the Middle East’s largest conglomerates, expects to sign acquisitions worth more than US$500 million (Dh1.83 billion) in coming weeks as it expands in Saudi Arabia and elsewhere in the Middle East.

Marwan Shehadeh, the group’s director of corporate development, said the acquisitions would “complement” the group’s existing core businesses and raise its profile in Saudi Arabia.

“It is a priority for us to grow our Saudi auto business, and we are in the process of making a couple of acquisitions in the auto sector there,” Mr Shehadeh said. “Our aim and strategy is to become much more substantial in Saudi.”

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Conversing with a Sensation – Adriana Mulassano – the Italian Fashion Expert

Ms. Mulassano with Giorgio Armani 1999 © Adriana Mulassano | 2011


By Alexandra Orloff
olumnist  LuxuryFactsEditor Soumya Jain

There are very few people who leave an indelible mark on people and the industry they strive for. Adriana Mulassano is one of them. A strong hand in yesteryears for today’s elite designers and a silent observer of all that is happening…she is one woman who never lets her passion for fashion die out, even at the prime age of 72!

In her beautiful apartment inRome, Ms. Adriana Mulassano, Italian fashion journalist, author of many reference books on fashion, Professor and an amazing friend, shares with me the spirit of Italian fashion – where genius and inspiration are part of one’s lifestyle.

First of all, Adriana is a dear friend and admired by many, as well as feared by the rest. She is, and remains ‘the reference’ in the history of the fashion institution.

From Amica to El Corriere de la Sera, passing by Giorgio Armani’s Press Office, she has played every role in the theatre of fashion – being the adviser, the friend, the confidante of many renown designers, such as Versace, Missoni, Valentino, Fendi, Ferrè, Armani, to name only a few. Ms. Mulassano knows by heart the wheels of this unpredictable business and never stops to astonish us in predicting the trends.

It was my delight to get a chance to coax out of her some memories of those glamourous times. She is a woman who has a huge contribution in the history of fashion. Indeed, she is the history of fashion…

Alexandra Orloff: You have worked for magazines, newspapers and fashion designers. You have written books, and are at present a lecturer at IED – Instituto Europeo di Design inRome. What is next? What else do you wish?

Adriana Mulassano: Today, at the age of 72 years, my goal is to live long enough to transmit to my Fashion Communication students not only the emotions and history of fashion that I have experienced first hand, but above all, my love for the discipline. I would like to change the perceptions regarding the fashion industry, and eliminate the belief that this is a futile industry. The future of fashion lies in our continued ability to create and push the boundaries of this industry. It demands an intuition, which will allow you to find new talents that will change history.

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Tapping China’s luxury-goods market – Study April 2011


By 2015, Chinese consumers will account for more than 20 percent of the global luxury market. How is their behavior evolving?

APRIL 2011 • Yuval Atsmon, Vinay Dixit, and Cathy Wu

Source: Marketing & Sales Practice


(c) McKinsey research

China will account for about 20 percent, or 180 billion renminbi ($27 billion1), of global luxury sales in 2015, according to new McKinsey research. Even during the global recession in 2009, sales of luxury goods in the mainland rose by 16 percent, to about 64 billion renminbi—down from the 20 percent growth of previous years but far better than the performance of many other major luxury markets. To get a better idea of the dynamics, McKinsey surveyed more than 1,500 luxury consumers in 17 Chinese cities in spring 2010.2 Three findings stood out.

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Saved by the BRICs

By Julian Evans for WSJ – published on March 24, 2011

Emerging markets, in particular China, are protecting the luxury sector from the worst of the global economic downturn

The global economic downturn hit the luxury sector hard. Joelle de Montgolfier, head of the luxury sector at the consultancy Bain & Co in Paris, go so far as to say that 2009 was the worst year in decades. “The sector had seen continued growth since 1995, even after 9/11 or the SARS crisis. Then, in 2009, revenues declined by 8%. It was unprecedented, and it really shook the market,” he says.

Luxury companies went into crisis-mode, shedding staff, restructuring debt, and digging in for a long, cold recession. But then, much to everyone’s surprise, the crisis passed. Pierre Mallevays, former head of mergers and acquisitions for Louis Vuitton Moet Hennessy and now the managing partner of mergers and acquisitions boutique Savigny Partners, says: “During the crisis, all the big luxury groups were heavily restructuring. They didn’t know how long the recession would last. Now, they’re in the happy situation of having a lean cost base while sales go through the roof.”

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