Luxury under the spotlight with Armani's will, while LVMH and Essilux are weak in Paris.

(Il Sole 24 Ore Radiocor) - Giorgio Armani's will is putting the spotlight on European luxury stocks. The document surprisingly reveals the designer's request to sell 15% of the fashion house within twelve months, and in any case within eighteen months "from the date of the opening of the succession," and "as a priority" to a group including LVMH , EssilorLuxottica , or L'Oréal . This decision effectively rules out investment funds and financial institutions. Alternatively, the designer's house could be listed on the stock exchange within three to five years, with the Foundation holding a 30% stake.

For now, investor reactions to the news have been timid. On a day of general weakness for the luxury sector , the giant led by Bernard Arnault fell in Paris, while on the CAC 40 , Essilux and cosmetics giant L'Oreal also declined. The news has so far had a moderate impact on the FTSE MIB , where Brunello Cucinelli and Moncler fell. Salvatore Ferragamo , on the other hand, has seen sharper declines, grappling with reactions to the resignation of CFO Pierre La Tour, "a further element of uncertainty for the group, which is still searching for a CEO," according to Intermonte.

Returning to Armani, the first speculations about the fashion house's future are beginning to emerge among industry insiders, with Essilux announcing its board of directors' meeting to evaluate a possible acquisition of the company, a dossier that "deserves careful consideration." In his will, Giorgio Armani specified that the 15% stake, in agreement with Pantaleo Dell'Orco (the designer's lifelong partner, who now holds 40% of Essilux's voting rights), may also be sold "to other companies or groups," but always "operating in the fashion and luxury sector of equal standing with the above-mentioned groups, with priority given to groups with which the company already maintains partnerships." This sale, however, is only the initial step: starting from the third year and within the fifth year from the date of the opening of the will, Armani asks the heirs to "transfer to the same purchaser of the initial 15% of the company's capital, an additional shareholding" for a minimum of 30% of the capital and a maximum of 54.9%. With this "second tranche," the new entity could thus achieve an absolute majority of the company.

If the sale doesn't go through, there is also a "Plan B." Armani has alternatively arranged for "the listing of the company's shares on a regulated Italian market or one of equal standing." The stock market listing would occur, should Dell'Orco and one of his grandchildren, Andrea and Silvana, request it from the Foundation within three years of the unveiling of the will, but "in any case" within five years or eight years at most. At this point, according to the document, "an orderly plan to valorize a portion of the Foundation's residual stake in the company must be implemented, so that the Foundation's stake is never less than 30.1%."