Mayhoola
Rachid Mohamed Rachid
Rachid caught on fast to the ways of the luxury business: Mayhoola has tripled the size of Balmain to around 300 million euros since acquiring it in 2016, and Valentino fourfold to more than 1.2 billion euros, attracting the attention of Kering, which recently took a 30 percent stake in the Roman fashion house, with the option to buy more.
“There was a vision from the beginning that we wanted to establish Valentino as a maison de couture, which is very much based on our haute couture capabilities historically, and stay very much at the ultimate luxury positioning that we want to have,” the executive said in an interview at Valentino’s showrooms on the Place Vendôme. “And I think that was what was achieved. And the agreement that we have with Kering is a very strong validation of that.”
Rachid disclosed that Mayhoola had been exploring an initial public offering as a way to bolster governance, raise capital for M&A, and create incentive systems like share options for its management teams.
Kering has an option to buy 100 percent of Valentino’s capital by 2028, as reported, while Mayhoola has an option to become “one of the important shareholders in Kering” with a possibility to go to 10 percent, according to Rachid.
“In addition to that, we agreed with Kering group that we are going to explore investments in areas beyond fashion, but in luxury, so that could cover hospitality, food and beverage or other areas,” he disclosed.
He described the above as a framework to be implemented over the next five years following the closing of the deal, which is expected before the end of the year.
“It was a huge success story over a period of 20 years,” so much so that the chairman of Unilever at the time asked Rachid to join him as an executive director as the-then Anglo-Dutch giant work was embarking on an acquisition spree. “In one week, he bought three companies: Best Foods, Ben & Jerry’s ice cream and Slim-Fast.”
in 2021, Rachid was among investors when CVC Capital Partners agreed to buy Unilever’s tea division, which includes Lipton, for $4.5 billion.
Rachid would later found the Alsara Investment Group, and the investment company Bidayat specializing in “creative entrepreneurship in the Mediterranean region,” whose shareholdings also remain confidential.
Alsara Strategic Investments, which controls Bidayat, includes the brands Akoni, which produces eyewear for Valentino and Balmain; puffer jacket maker Khrisjoy; design venture Fromm; jewelry brand Azza Fahmy; Egypt-based handbags label Okhtein; Flyroom, and the IP of Walter Albini, with the goal to revive the dormant Italian fashion brand.
Rachid is also the chairman of Valentino and the chairman of Balmain.
In consumer goods, we were always taught to say, “Let’s identify the needs of the people and provide it to them.” That’s how you can create success. In luxury, you don’t care about what people need: you tell them what they need, and create desire around it.
Essentially they don’t need your products, but you are convincing them they need them because they will feel better.…You have to be able to heighten that emotional value to a very high extreme.
department stores are under pressure. China is not recovering at the speed people expected after the opening up from the pandemic. And Europe, despite the reality that there are still a lot of tourists coming in, they have shifted their spending toward experiences.
Airlines, hotels and restaurants have all increased prices…so people have less money to spend on luxury goods.
I’ve learned in my life that guts come from being close to the consumer, close the market, and also seeing the big picture. You will learn a lot if you go to the store, and if you walk on the street and if you sit on a coffee shop — as much as reading the best economic reports. You need have to have both inputs.
http://linkedin.com/in/rachid-mohamed-rachid-125a20220
Rachid Mohamed Rachid is CEO of Mayhoola, Balmain parent company that shares Qatar as headquarters w/ Hamas.
