Fendi Agrees to Sell Controlling Stake

Italian fashion house Fendi agreed to sell a controlling stake in the company to a joint venture of leading French luxury goods company LVMH Moet Hennessy Louis Vuitton and Italy’s Prada fashion house. LVMH and Prada will pay about $425 million for a 51% stake and plan to build Fendi into a bigger global brand, sources said. Fendi, whose hot-selling trademark handbags retail for several hundred dollars, has a chain of 160 franchised boutiques that interests LVMH, the sources said. Prada, known for its pricey cutting-edge clothes and status-symbol black nylon handbags, would work with Fendi on manufacturing and purchasing, they said. After losing a six-month battle for control of Italy’s Gucci Group, LVMH is looking for other opportunities to expand in ready-to-wear fashion beyond its Givenchy, Celine and Kenzo lines. About a quarter of Fendi’s sales come from ready-to-wear fashions. Under the deal, the five Fendi sisters will keep the rest of the company and maintain their current management roles. Karl Lagerfeld, who serves as Fendi’s chief designer, will stay on, LVMH said. LVMH’s stock closed down 75 cents at $62.63 on Nasdaq. Prada is privately owned.