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LVMH-backed L Catterton might not be a household name, but chances are you’ve encountered one of their products. With $34 billion (£26.29 billion) in assets under management, L Catterton is reportedly the largest consumer-focused private equity group in the world.
Ownership and Influence
The firm holds a majority stake in 52 companies, including popular brands like Birkenstock, Ganni, and Golden Goose. Additionally, L Catterton is a minority owner in 92 other firms, making it a significant player in the consumer market.
Leadership and Origins
L Catterton is led by co-CEOs J. Michael Chu and Scott Dahnke. The firm, initially known as Catterton Partners, merged with Bernard Arnault’s family office (LVMH’s founder) and LVMH itself in 2016 to form the current L Catterton.
The company’s origins date back to 1989 when it was founded by former US Secretary of the Treasury under Nixon, William Simon, along with Chu and Frank Vest. LVMH now owns a 40% stake in L Catterton, and both companies enjoy a “special relationship.” According to L Catterton, this partnership allows both organizations to actively collaborate in areas such as consumer insights, brand strategies, retail expansion, and economies of scale across their collective portfolio.
Investment Activities
In 2023, L Catterton invested $2.1 billion (£1.62 billion) in 17 consumer businesses globally, showcasing its robust investment strategy and commitment to expanding its influence in the consumer sector.
Impact of Market Conditions
Luxury firms, including LVMH, have recently faced challenges due to slower growth in crucial markets like China and the cost-of-living crisis affecting Western countries. LVMH is set to release a trading update tomorrow, which could provide further insights into its current market position.
L Catterton’s Stake in Bicester Village
Through a complex chain of company acquisitions, L Catterton now owns a substantial portion of the iconic outlet centre, Bicester Village.
Recent Acquisition
Silver Bidco, a newly-formed Jersey-based vehicle of L Catterton, recently acquired Hammerson’s stake in Value Retail, the owner of Bicester Village.
Value Retail operates nine luxury and premium fashion outlet centres across Europe, including Bicester Village in Oxfordshire. Other locations include centres near major cities such as Barcelona, Brussels, Dublin, Frankfurt, Paris, Madrid, Milan, and Munich.
Details of the Deal
The transaction involves transferring Hammerson’s entire 42% stake in Value Retail to Silver Bidco. However, the exact percentage of L Catterton’s stake in Bicester Village remains unspecified.
The sale is anticipated to generate cash proceeds of £600 million for Hammerson, underscoring the financial impact and strategic importance of this acquisition for both L Catterton and Value Retail.
With these moves, L Catterton continues to strengthen its position as a dominant force in the global consumer market, leveraging its strategic partnerships and investment acumen to navigate complex market landscapes.
