B&B Italia owner lays out plan to become ‘LVMH of design’

Design Holding has made ambitious plans to acquire more luxury interior design brands while not ruling out a float, as the Italian group is betting the switch to hybrid business will spur demand for B&B Italia’s high-end sofas and Louis Poulsen lamps.

CEO Daniel Lalonde said the Milan-based company, owned by private equity firms Investindustrial and Carlyle, could become “LVMH Design,” referring to the former employer who built the world’s largest luxury empire by acquiring several labels. European business.

Design Holding, which was set up as a joint venture in 2018 by two private equity backers, already controls furniture and lighting brands such as Flos and Fendi Casa, which were part of the luxury fashion group.

Lalonde said the group wants to expand through more acquisitions and that the opportunities are plentiful given that many high-end furniture and interior design companies are small or mid-sized.

“We need to be the pioneer, across this fragmented sector, in bringing together sustainable craftsmanship on a global scale,” he said.

Design Holding is looking to partially float and appoint banks including JPMorgan and UniCredit as advisors earlier this year, according to people familiar with the matter. A possible initial public offering would see the group valued at more than €2 billion, according to the people, but they stressed that no move was imminent.

Lalonde refused to be drawn to whether there were plans to go public with the company but acknowledged that there was “some thinking about the group’s strategic options”.

Casa Flagship Store, Piazza della Scala, Milan, Italy
Fendi Casa in Italy © Andrea Ferrari

“Carlyle and Industrial Investments love the business, but they are both privately owned companies, so their decision is to see if something will happen, when and where,” he added.

Massimiliano Carava, managing director of Carlisle in Milan, told the Financial Times Luxury Business Summit last month that Design Holding would be a potential candidate for an IPO in the future, without providing a time frame.

Investindustrial and Carlisle declined to comment on their plans.

Lalonde, a Canadian, worked for coffee maker Nespresso before spending over a decade at LVMH where his roles included CEO of Champagne Moët & Chandon and then International President of Ralph Lauren. He then served as CEO of SMCP, a French group whose brands include women’s clothing brands Sandro, Maje and Claudie Pierlot, which were included during his tenure.

Design Holding reported revenue of more than 700 million euros in 2021, the first year it announced its financial results. EBITDA was €190.3 million, up nearly 28 percent. Sales of 190.3 million euros were recorded in the first three months of 2022, up more than 18 percent year-on-year.

Lalonde argued that the coronavirus pandemic has permanently transformed the way people around the world live in their homes, encouraging many to renovate. Many professionals across Western countries have also moved to the countryside, creating growth potential for outdoor lighting and sophisticated furniture.

“There has been a renaissance in beautifying outdoor spaces and the home. Covid was the industry’s wake-up call,” he said, speaking this week at the Salone del Mobile in Milan, the sector’s main global event. The trade show ran a mini version in person last September, but the meeting suffered cancellation during the epidemic.

The Italian design sector is the largest in the world, with 30,000 companies and more than 60,000 employees in 2020, according to a joint report by Fondazione Symbola, Deloitte Private and Poli. But the pandemic has been a difficult period as the sector lost a fifth of revenue in 2020 compared to 2019.

Lalonde said the picture is getting better. “High-end design has grown in the past 3 to 4 percent annually, then Covid has changed consumer trends and accelerated the growth of our segment to low double digits.”

The Design Holding catalog includes items by designers including Antonio Citterio, Paul Henningsen and Patricia Urquiola. This week, B&B Italia in Milan unveiled a new version of Mario Bellini’s famous 1972 sofa collection Le Bambole, which costs upwards of €10,000 a piece.

Last year, the group completed its first acquisition in the United States, buying San Francisco-based e-commerce platform and lighting group YDesign Group, which has also bolstered its digital capabilities. It is investing in technology and wants to boost its e-commerce operations.

Design Holding’s brands cover every part of the luxury interior design industry except for bathroom décor. “Obviously we are open to acquisitions if they operate from a category, aesthetic or geographic perspective, but we want to stay consistent with our luxury-style high-end position,” Lalonde said.