Golden Goose is an Italian luxury fashion brand that sells handmade leather sneakers, footwear, ready-to-wear, and accessories, all characterized by a vintage feel and the company's Star logo. Venice-based Golden Goose retails its products worldwide through a network of exclusive multi-brand stores and franchises, along with single-brand stores. It all started from a workshop near Venice, where Golden Goose was founded in 2000 by two stylists, Francesca Rinaldo and Alessandro Gallo, who began their adventure in collaboration with a Venetian tailor and close friend who helped by making tailor-made samples. The small Venetian shoemaker has now grown to a multimillion euro cash cow with yearly revenues of €277mln and an EBITDA margin of over 36% as of the end of 2021. The brand is looking to use its money to acquire one of its main suppliers, Italian Fashion Team, with the aim of gaining further control over their supply chain.
Over a decade of M&A
In 2010, with lifetime sales of €30mln through a worldwide network of high-end retailers, the company was bought by Style Capital Group. With 600 showrooms, 7 mono-brand flagship stores, and several corner shops all over the world, Golden Goose was already distributed globally. However, with the support of the acquirers, the brand reached even greater success, more than tripling its yearly revenues reaching €48mln in 2014 and exceeding €75mln in sales by 2015.
This incredible growth whetted the appetite of bigger players - "Golden Goose is already an amazing success story that we believe can be replicated on a larger scale going forward," said Emanuele Lembo, managing partner of Ergon Capital Advisors Italy. In May 2015, 75% of the company was acquired by a pool of investors led by Ergon Capital, in a deal understood to be worth more than €100mln. The remaining 25% remained in the hands of brand founders Alessandro Gallo and Francesca Rinaldo, as well as DGPA CEO Roberta Benaglia, who was also president of Golden Goose. The latter will continue as CEO of the brand.
After 16 years of growing a sizable presence and investment from two local private equity funds in Italy, Golden Goose needed a partner to accelerate the brand's global footprint and reimagine its digital capabilities to expand the brand worldwide. Although the company already had a strong domestic base and had generated more than €100mln in revenue in 2016, there was a fantastic opportunity to further expand the business in the United States and China. To launch it, Golden Goose needed a trusted partner who could establish the company as one of the fastest growing and most distinctive global luxury lifestyle brands, while keeping intact the emphasis on quality craftsmanship assimilated with the "Made in Italy" mark. Carlyle Group partnered with Golden Goose bringing its decades of experience in working with luxury consumer brands, global network, deep operational experience, and understanding of the technological innovations that were changing the luxury fashion landscape, acquiring 100% of the brand in March 2017. Carlyle’s contribution in terms of both capital injection and skills for the creation of a corporate management culture were key to Golden Goose’s success. Indeed, in just three years, Golden Goose's EBITDA had grown from €32mln in 2016 to €83mln in 2019, a compound annual growth rate of 37%. The company grew rapidly from seven directly operated stores to nearly 100 stores, with direct-to-consumer sales increasing from about 10% to 45% over the same period.
Carlyle Group announced they were “delighted to pass the baton to Permira” in a deal to sell the Italian luxury sneaker brand for €1.28bln, who will continue to contribute to the company’s exceptional growth and the creation of a market-leading omnichannel platform.
Golden Goose’s First Acquisition
On the 4th of October of this year, after more than a decade of being the target of acquisitions by private equity firms all around the world, Golden Goose finally decided to make a purchase of its own announcing the acquisition of one of its major suppliers, Italian Fashion Team (IFT). The deal should be closed by the end of 2022.
Italian Fashion Team Overview
IFT is a fashion company, based in Apulia, specialized in the design and manufacturing of high-quality footwear. The company is quite young: it was born in 2006, initially providing fashion consultancy only, starting its new manufacturing business model by 2016, reaching more than 200 employees and €36.5mln in revenues by the end of 2021. Michele Zonno, the CEO, announced that “it is a pleasure to become part of the Golden Family,” as a culmination of a collaborative partnership that began from the very foundation of IFT. He stressed that the key synergies of the transaction could be summed up in the “commitment for Italian excellence and local talent,” - both essential values found at the core of the two companies.
Financial Analysis
The deal is not closed yet, and most financial values are undisclosed. However, looking at its balance sheets, we can say that Italian Fashion Team’s numbers are solid. As shown by the graph below, the company delivered a 37.3% CAGR since it first undertook the manufacturing business model, with a positive trendline even during the Covid Crisis, when the fashion industry was hit hard. Its EBITDA margin is also strong, standing at around 18% in 2021, higher than the average of the industry by circa 5 percentage points.
