Pinarello, a Treviso-based company, is a high-end manufacturer of lavishly appointed carbon dream bikes that drip with Italian style. Now luxury brand group LVMH is knocking on the doors of Pinarello with an eye on acquiring some of that quintessential Italian cycling style. According to a report in the Treviso Tribune, which was widely circulated in the cycling media, the deal has been in the works for several months. The sale price is apparently the sticking point.
The LVMH Group is the parent company for a host of luxury brands including flagship fashion label Louis Vuitton. The Economist magazine aptly described LVMH's properties as “bags, booze, and bling.” Also among the 60 brands it owns are Moët, Hennessy, Bulgari jewelry, Tag Heuer, and Dior. Under the leadership of Bernard Arnaud, who is the CEO and owns a majority stake, the group has steadily increased its holdings and the total revenue for LVMH, which hit $50 billion in 2015.
Until now, LVMH has not entered the sports or leisure market, and the Treviso Tribune suggested that the courtship of Pinarello reflects a desire on the part of the company to move in that direction. One of LVMH’s rivals, Kering, owns leisure brands Puma, Volcom, and Cobra Golf, in addition to its more traditional high-fashion brands Gucci and Yves Saint-Laurent. As the athleisure trend continues to gain ground, it’s hardly surprising to see big-money investors on the hunt for hot brands. In the U.S. sales of active wear grew 16 percent between 2014 and 2015, while denim sales have fallen 5 percent or more each year since 2013.
The acquisition of Pinarello also fits LVMH’s taste for legacy brands. In an interview with Harvard Business Review, Arnaud described his ideal brand as “timeless, modern, fast-growing, and highly profitable.” A brand like this isn’t built overnight. “You cannot just decree it,” says Arnaud. “A brand has to pay its dues — it has to come to stand for something in the eyes of the world.”
Pinarello is a family-owned business that originated in Treviso in 1953. Giovanni Pinarello was then a professional cyclist, and his team offered him 100,000 lire to skip the Giro d’Italia so that a younger teammate could take his place. Though disappointed to miss Italy’s biggest cycling event, Pinarello saw the money as his ticket to pursue a long-standing dream. He opened a workshop where he built bike frames. In 1975 the new company celebrated its first victory at the Giro d’Italia, when sponsored rider Fausto Bertoglio won the overall on one of Pinarello's bikes.
Since then, Pinarello has sponsored some of the top teams in cycling, and the bikes have become sought-after by riders with deep pockets and a taste for Italian style. This past July, Team Sky’s Chris Froome won the Tour de France while riding Pinarello’s flagship Dogma F8, which retails at $5,700 for the frame only. Built up with top-level components, a Dogma can easily run over $10,000. Pinarello currently employs approximately 50 people and reportedly had $56.6 million in revenue in 2015. Pinarello also owns a high-end travel company, Pinarello Travel.
It was confirmed this week that a sale is possible. “The Pinarello family confirms that they have been evaluating, since a few years, different assets-reinforcement options,” says a statement. Ownership of the brand was recently restructured, though it has remained family-owned and led by the founder’s son, Fausto. The statement said the family is looking to strengthen the brand. Even if the brand sells, though, Fausto Pinarello will likely continue in his present role, caring for the Giovanni legacy “as it has always be done and with the same passion.”