Azernews.Az

By Bloomberg

Hugo Boss AG fell in early Frankfurt trading after buyout firm Permira Holdings Ltd. further reduced its stake in the German clothier.

Permira will own less than 14 percent of the company after selling a 10.4 percent stake to the market, and a further 500 million euros to Italy’s Marzotto family. The investor has over the last two years been cutting its holding in the fashion house, in which it acquired a majority stake in 2007.

Hugo Boss shares slid as much as 5.6 percent to 103.50 euros. Permira sold the stock at 102 euros a share, according to a person familiar with the transaction.

The combined value of the divestments is about 1.3 billion euros ($1.5 billion), based on Monday’s closing price.

The sale will boost the amount of freely traded shares in a move that may make Hugo Boss more appealing to institutional investors. When the free float rose to 66 percent after a stake sale Dec. 12, Metzingen, Germany-based Hugo Boss said it would make the stock more attractive to institutions.

Gaetano Marzotto already sits on Hugo Boss’s supervisory board. Permira acquired control of Valentino Fashion Group SpA from the Marzottos in 2007.

Before today, Hugo Boss shares had gained 7.8 percent this year, valuing the company at about 7.7 billion euros. That’s even after the clothier reported fourth-quarter sales and profit that missed estimates, as it contended with sluggish demand for high-priced fashion in economically stagnant Europe.