LuisiaViaRoma Forges First Partnership With Style Capital

After 90+ years of going it alone, LuisaViaRoma is taking a partner. The Florence-based retailer is teaming up with Style Capital, an Italian private equity firm focusing on the fashion and luxury industry. The deal, which is expected to close in 2021, will infuse $130 million to fuel the retailer’s international growth plans and leaves Luisa Via Roma’s S.p.A. Chairman and CEO, Andrea Panconesi, with the majority of the share capital and a 60% stake. Style Capital will hold relevant governance rights, with a common objective to make the brand a publicly-traded company.

Founded in 1929 by Panconesi’s grandmother, Luisa Jaquin, the retailer remains with a single physical store location but parlayed their multi-brand designer business into an international luxury online retailer by adopting the digital store platform before many of their competitors. Known for a distinct, highly curated selection of over 600 luxury brands that spans menswear, womenswear, childrenswear, home, beauty with a dedicated street style and sportswear division, the uniquely Italian point-of-view emphasizes experience as well. 

The investment, which a significant portion of is through a capital increase, will drive Luisa Via Roma’s ongoing rapid growth in its core markets alongside its international expansion plans. Paconesi and his team were advised by Jefferies, SLVB (Avv. Augusto Dossena), PwC TLS, Studio Associato Bartolini Pieralli, and KPMG to complete the binding agreement.

Panconesi said of the timing that the Company was well poised to accept outside investments to further its growth. He assured day-to-day operations won’t be affected but rather “things will change in the middle and long term.”  In terms of business operations, Panconesi will retain the majority of the capital and remain president and work together with a new CEO to be announced in a few weeks. “Style Capital perfectly aligns with the DNA of LuisaViaRoma, and we are excited and look forward to working together and continue to innovate our technology and logistics both on and offline,” he continued.

Style Capital has also invested in Italian luxury and accessible luxury brands such as Golden Goose designer sneaker and streetwear label, Damiani fine jewelry, Twinset Milano women’s apparel, Luciano Padovan footwear and Sunder, an Italian beachwear brand, among others. Their extensive knowledge of the sector, longstanding strategic relationships with prominent global consumer brands and successful investment track record will aid in Luisa Via Roma accelerating a global growth trajectory. The retailer will consolidate leadership in Europe and expand its international presence.

One of the first places the brand is focusing on is the US market. Panconesi pointed out in an earlier article on the retailer that because Florence has American university and college campuses such as NYU, Stanford and Sarah Lawrence there, American students studying abroad have been a part of their foreign client base for years. Recently the brand invested in its messaging in the US by launching a LVR Magazine, a digital publication echoing its point of view to an American audience, led by Kate Davidson-Hudson.

The next focus of expansion is closer to home, says Panconesi. “The main market is Italy followed by the rest of Europe,” Panconesi said in an interview, adding, “This is certainly because we are Italian first and because we started four years ago doing big events in Italy in partnership with UNICEF Italia and Extreme E, the electric off-road racing event.

The CEO says several factors outpace Luisa Via Roma from its competitors, which differ by region. In the US, its large department stores with robust e-commerce such as Neiman Marcus, Saks Fifth Avenue, and Nordstrom JWN ; in Europe, its Net-a-Porter and Farfetch, albeit through a different model and platform.  One is the product assortment. “We are the biggest in the Italian luxury fashion segment to represent ‘Made in Italy’ as most big fashion brands are Italian or made here. Our clients come to us because they feel they are buying from the original market,” he explains, also citing their longevity in business. 

Another is the marketing approach, a large portion of which is due to a philanthropic effort that shines a light on the retailer, pointing to the Unicef Italia partnership. “Investing in charity events was a huge step ahead which was highly appreciated and perceived by a new generation who is looking to buy from a company that is doing good. We want to do good and receive good consequently,” Panconesi said. The organization plans to do the same with a big charity event with UNICEF in St. Barths on the 29^th of December. Their do-gooding also extends to environmental concerns, notably the sustainable partnership with Extreme E. According to Panconesi, the aim is ‘to sustain and raise awareness of the challenges facing our planet today.’

To that end, in 2021, LuisaViaRoma launched a new sustainable project called My Earth is Beating, a photojournalistic documentation project designed to raise awareness of the planet on issues of ecological transition. “#myEIBis a project that reinforces LuisaViaRoma’s environmental commitment through a series of visual stories of crisis and environmental defense that will be documented to address the climate crisis through inclusive, humane, open, and honest dialogue,” he said.

The virtual world is also equally attractive to the retailer. They also recently invested in MOD4, a fashion-centric video game app. (MOD4 has also partnered with digital clothing platform DRESSX to outfit the fashion avatars featured in the game.) “I always thought since the beginning the virtual reality and the physical reality are getting closer and closer, like two parallel lines which are becoming closer every day without ever being able to touch,” Panconesi admits. The retailer is willing to bet that selling digital clothing will lead to selling actual garments to the next generation.