Italian designer Roberto Cavalli
, is said to be nearing sealing the deal to sell a majority stake in his eponymous fashion company.
The designer has apparently signed a letter of intent to sell a 60 percent stake in his company to VTB Capital (an arm of Russia's second largest lender VTB) for 500 million euros ($667.5 million) according to the publication Women’s Wear Daily (WWD). The total cost of the designer's fashion house is estimated at 830 million euros ($1.1 billion) which is four times the amount of the company's sales in 2013, which was reported at 201 million euros last year. The agreement is expected to be finalized sometime mid-October.
The news comes after many months of speculation. Cavalli has been looking for an investor for more than five years but has repeatedly halted negotiations with different investment firms in the past, reportedly due to disagreements over the financial valuation of his brand. In May, The Financial Times said the designer was discussing the sale of the controlling stake with an investment company Investcorp. Before that, he held talks with European equity firm Permira but failed to agree on the management strategy. The same reason ended Cavalli's discussion with other potential buyers, including private equity fund Clessidra in 2009.
According to WWD, Cavalli is particularly concerned about the role his wife Eva will have in the company once a new shareholder steps in. Eva is known to help him in the label's creative process.
VTB Capital holds shares in restaurant chain Burger King, food retailer Lenta and fitness clubs World Class and Fizcult.