- Executive says he will depart by the end of the year
- Leoncini had been in charge of apparel and accessories unit
Loro Piana Chief Operating Officer Fabio Leoncini is leaving the cashmere clothier after almost 17 years as LVMH reorganizes the business it acquired in 2013.
Leoncini, who joined Loro Piana in April 1999 and sat on the company’s board, will depart by the end of the year, he said via his LinkedIn account. A spokesman for LVMH declined to comment.
The executive was the right hand of brothers Sergio and Pier Luigi Loro Piana, who sold 80 percent of their company to LVMH two years ago. Leoncini had been in charge of Loro Piana’s apparel and accessories division, which accounts for about two-thirds of sales, and developed a retail network of more than 130 shops. Sergio Loro Piana died in 2013.
Leoncini’s departure shows how LVMH is seeking to tighten its grip on Loro Piana as luxury demand slows in Asia and the Americas. When the luxury-goods maker paid 2 billion euros ($2.1 billion) for its stake, it said it saw significant growth potential in expanding Loro Piana’s store network and product offering. LVMH in April described the brand’s performance as “solid.”
Parting with management after acquiring companies is typical of LVMH Chairman Bernard Arnault. He replaced the leadership at Bulgari after purchasing the jeweler in 2011 and named LVMH insider Matthieu Brisset as Loro Piana’s chief executive officer in 2013. Arnault’s son Antoine is chairman of the cashmere company.
The Loro Piana family has been trading wool and textiles since the beginning of the 19th century and established the business bearing their name in 1924. Franco Loro Piana, nephew of the founder, started exporting fine fabrics to international markets in the mid-1940s and from the 1970s his sons Sergio and Pier Luigi developed the brand and expanded into luxury retail. Loro Piana gets a third of revenue from selling fabrics such as vicuna.
There are put and call options for three years on the Loro Piana family’s 20 percent stake, with the price based on a multiple of trailing earnings before interest, tax, depreciation and amortization. That means LVMH can ask the family to sell it, or the family can make LVMH buy it during the period.