Valentino in Talks With Banks as Luxury Drop Prompts Debt Breach

(Bloomberg) – Valentino Spa beats the creditors after beating the results of the slowdown of demand for luxury goods and caused the fashion house to violate the conditions of the debt, according to people familiar with the issue.

The Italian company owned by Qatar Mayhoola’s Mayhoola and Kering SA for investments, after overcoming the threshold of anonymity after overcoming the threshold of debt / earnings in the credit agreement, he benefits from his contracts.

Valentino was injured from a global luxury decline with economic uncertainty and increasing tariffs, which led to consumers to prevent expenditures on high -level goods. The design house, known for Rosso Valentino Crimson, first violated its contracts in December, but in the first half of 2025, performance worsened with a significant deterioration.

Most of Valentino’s debt was created last year with financing of 530 million € ($ 619 million) provided by a bank pool such as Banca Monte Dei Paschi Di Paschi Di Paschi Di Paschi Di Paschi Di Paschi Di Paschi Di Paschi Di Paschi Di Siena, Banco BPM SPA and BNP Paribas SA. The documents, the contract signed in July 2024, said Valentino should be below a certain net debt / earning rate to be tested every six months.

Valentino, Mayhoola and Kering did not respond to comments. Intesa refused to comment on Banca Monte Dei Paschi and Banco BPM, BNP Paribas did not answer.

In 2023, Kering, owner of the Gucci, acquired his first 30% stake in Valentino, and this month expanded the rest of his purchase from Mayhoola to 2029.

Kering’s investment was seen as a way to reduce the exposure to Gucci, who explained most of his profit and struggled in recent years.

However, according to a Valentino statement in April, the design house reported a decrease of 2.8% in 2024, and in 2024, EBITDA fell 21% to € 1.31 billion. The decline was attributed to a decrease in wholesale income and slowing down in European and Chinese markets.

In June, consulting company BAIN & CO. A report made by 2% to 5% in the sector this year envisaged a contraction.

Valentino’s net debt, including leasing obligations, is € 1.08 billion as of December 31.

Valentino has also been subjected to management and design changes in the last 18 months and brought Riccardo Bellini as CEO at the beginning of September.

There are more stories like this Bloomberg.com