In Dizzying Reversal, China Firm in Talks with Richemont to Shed Jeweler Buccellati

Swiss luxury holding company Compagnie Financière Richemont SA, which owns Cartier, is reportedly in talks with Chinese holding company Gansu Gangtai to acquire Italian jewelry manufacturer Buccellati Holding Italia SpA. The possible acquisition has been reported by Italian newspaper Corriere della Sera.

If sold, the deal would be a swift reversal: Gansu Gangtai had purchased an 85-percent stake in the Milan-based company recently, in August 2017,  for $226 million (EUR 195.5 million). But the holding company, which had acquired the jeweler to capitalize on consumption trends in China, said that Buccellati did not achieve profitability in the first half of 2018.

The proposed deal reportedly values the jeweler at $313 million, including debt. The Italian paper reported that Bank of America Merrill Lynch was working on the sale. (Qatari investor Mayhoola has also expressed interest in Buccellati.)

Buccellati opened its flagship store in China in Shanghai’s Plaza 66 in November 2017. It opened additional outlets in Shanghai and Beijing. Courtesy photo

Buccellati opened its flagship store in China in Shanghai’s Plaza 66 in November 2017. It opened additional outlets in Shanghai and Beijing. Courtesy photo

Buccellati opened its flagship store in China in Shanghai’s Plaza 66 in November 2017. It opened additional outlets in Shanghai and Beijing. It also recently opened a store on JD.com’s TopLife.

The firm, which specializes in ornate, lush jewelry designs but also carries solid gold, diamond-encrusted “Leonardo da Vinci” iPad and  iPhone covers—about $485,000 and $200,000, respectively—will celebrate its 100th anniversary next year. The brand’s designs stem from the Italian Renaissance period and are accomplishing using traditional goldsmithing techniques.

Gansu Gangtai’s business is engaged in real estate as well as gold and diamond mining for the jewelry industry. It had planned to invest an additional $231.6 million (EUR 200 million) in the jeweler. But Gansu Gangtai apparently ran into difficulty managing the company and China has tightened regulations on foreign investments over the past two years. The holding company also recently defaulted on bond payments—it failed to make interest payments on September 26, according to a report on WeChat from Retail Insider.

Richemont had expressed interest in buying a stake in Buccellati from Italian private equity firm Clessidra, according to Reuters.

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Investment & Real Estate, Watches & Jewelry