L Catterton, a private equity firm supported by the prestigious French luxury conglomerate LVMH Moet Hennessy Louis Vuitton, has made a significant acquisition by purchasing the esteemed Value Retail, renowned for its portfolio of upscale designer outlet destinations.
The transaction involves L Catterton acquiring U.K.-based REIT Hammerson’s stake in Value Retail, valuing the entire portfolio at approximately $1.9 billion. This includes nine luxury retail properties situated outside major European cities, notably Bicester Village near Oxford, celebrated as one of the world’s highest-performing retail locations per square foot, drawing substantial international footfall, particularly from Chinese consumers.
Other prominent locations within the portfolio encompass Fidenza Village in Milan, Ingolstadt Village in Munich, Kildare Village in Dublin, La Roca Village in Barcelona, La Vallée Village near Paris, Las Rozas Village in Madrid, Maasmechelen Village near Cologne, Wertheim Village near Frankfurt, Shanghai Village in Shanghai, and Suzhou Village in Suzhou, China.
The upcoming addition to the Bicester Collection, Belmont Park Village in New York opening this September, promises a luxurious experience with landscaped open-air streets, dining options, and premium guest services, strategically located near Belmont Park Racetrack and UBS Arena.
Under the leadership of co-CEOs J. Michael Chu and Scott Dahnke, L Catterton has strategically expanded its investment footprint in prime retail properties, aligning closely with its luxury brand portfolio strategy. Founded in 1989 and managing approximately $35 billion of equity capital across various platforms including private equity, credit, and real estate, L Catterton has cultivated a diverse global portfolio encompassing over 275 investments, ranging from fashion brands like Birkenstock and Pepe Jeans to notable real estate developments such as the Miami Design District and South Bay Galleria.
The acquisition of Value Retail represents a strategic move for L Catterton, leveraging its expertise in luxury retail to further enhance the growth and operational efficiency of the outlet group. The deal underscores the resilience of European designer outlet centers amidst the challenges posed by online retail, positioning Value Retail as a key player in catering to international shoppers, including affluent consumers from China, India, and the Middle East visiting Europe.
For Hammerson, the sale of its stake in Value Retail marks a transformative step aimed at enhancing liquidity and focusing on prime urban real estate assets within its portfolio. The transaction is expected to bolster Hammerson’s financial flexibility with plans for significant share buybacks and enhanced dividend payouts, reinforcing its commitment to maximizing shareholder value and strategic growth opportunities.
In summary, the acquisition underscores L Catterton’s strategic vision to consolidate its position in luxury retail and real estate markets, leveraging synergies with LVMH’s extensive network and resources to drive Value Retail’s continued success on the global stage.
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