Billionaire Fungs weigh sale of luxury bagmaker Delvaux

[HONG KONG] Hong Kong billionaire brothers Victor and William Fung are exploring selling their stake in Delvaux, a 192-year-old Belgian luxury leather bagmaker, people with knowledge of the matter said.

The Fungs are working with advisers and have reached out to prospective suitors on the potential divestment of the asset, the people said. A sale could value the bagmaker at around US$500 million to US$600 million, said the people, who asked not to be identified as the information is private.

The brothers acquired the stake together with Singaporean state investment company Temasek Holdings Pte in a 2011 deal, giving the two parties majority control of the company, they said.

Deliberations are ongoing and the Fungs could decide to keep their stake in the business, according to the people. A representative for Fung Group had no immediate comment. A spokesperson for Temasek declined to comment.

Founded in 1829 by Charles Delvaux in Brussels, the brand was granted the title "Purveyor to the Court" in 1883, supplying leather goods to the Royal Court of Belgium, according to its website.

The Fung brothers and Temasek have been expanding the brand's store networks, especially in China, and its online offerings. The company announced a restructuring in February to shift quality control and distribution operations from Belgium to France, which could result in 26 job cuts, according to a report in Women's Wear Daily citing a statement by the firm.

Prices for Delvaux's Brilliant bag, which features a top handle and a buckle lock, start at US$4,700, according to its US web store.

BLOOMBERG