by Stephen Garner

Private equity firm L Catterton has agreed to acquire a majority stake in Italian luxury fashion brand Etro. The Etro family will retain a significant minority, and founder Gerolamo Etro will remain at the company as the brand’s chairman.

Although financial terms were not disclosed, Italian newspaper Il Sole 24 Ore had reported L Catterton will buy a 60 percent stake, which would value Etro at about 500 million euros ($590 million). The transaction is expected to close by the end of the year.

Founded in Milan in 1968 as a textile company, Etro is widely known for its iconic paisley motif and bold patterns inspired by travel, and has a rich heritage of interpreting iconic aesthetic beauty on precious fabrics with a distinctive Italian footprint in terms of both style and craftsmanship. The company today represents an expanding business with a number of diversified product categories, including men’s and women’s fashion, accessories, beauty and fragrances, and home goods.

For nearly 55 years, the Etro family has owned the company and established its unique, family-driven brand DNA, which has resulted in notable customer recognition. With a strong distribution footprint globally, Etro has a presence in approximately 140 retail stores in high-end shopping locations and is a notable fixture among many of the most prestigious luxury department stores and e-retailers across the globe.

By leveraging L Catterton’s deep investment expertise, category knowledge, consumer insights, and strategic relationships with LVMH, Etro stated that it will be poised for significant growth to become one of the leading high-end brands across product categories. With a track record of over 30 years of partnering with luxury and fashion brands across the globe, L Catterton will aim to support Etro in enhancing its brand strategy to grow its customer base and reach the younger generations of consumers by continuing to interpret its style in new, modern ways, while expanding into new categories and further enhancing its Italian roots. The partnership will also allow Etro to enhance its digital presence and drive global expansion, with a focus on the significant opportunity in Asia.

“My family and I take great pride in having established Etro as a strong luxury brand that resonates with consumers around the globe,” said Gerolamo Etro. “L Catterton has a shared vision and a unique appreciation for our business, and the firm takes the same approach to partnership our family does. After nearly 55 years under our stewardship, we believe that together with L Catterton, Etro can enter its next chapter of growth and solidify its place as one of the great, lasting luxury houses. We are thrilled to work with L Catterton’s team as they bring their extensive knowledge of the fashion category, along with a proven track record of supporting the international development of distinctive brands, allowing Etro to reach new heights.”

“We are honored to welcome such a respected and iconic fashion brand into the L Catterton family and are delighted to partner with the Etro family for the next phase of the company’s evolution,” added Luigi Feola, managing partner and head of Europe at L Catterton. “We are confident that with our broad global network and experience building fashion brands, Etro will be well-positioned to become an international powerhouse and a leader in its category.”