Investindustrial plans to evolve Italian marketplace chain Eataly into multiple formats to fit a variety of markets and locations, according to the firm’s managing principal, Antonio Gatti, and senior principal Carl Nauckhoff.
In late September, Investindustrial announced that it had signed an agreement to acquire a 52 percent stake in Eataly for €200 million. Existing shareholders Eatinvest, the Baffigo/Miroglio family and Clubitaly will own the rest.
Eataly, headquartered in Alba, promotes and sells food ‘Made in Italy’. It has been in operation for almost 20 years and has locations globally.
“For the moment, Eataly is only one format, but the plan is to make it nimbler,” Gatti told PE Hub Europe. “For example, Eataly in airports works extremely well. But there’s only one Eataly at an airport – in Rome.”
London-based Investindustrial is not stopping at airports. “Eataly can be sliced, maintaining the brand, to adapt to every possible type of location – even small corners,” Gatti explained.
New formats may include smaller, homely restaurants or even ice cream parlours. Eataly was originally 60 percent retail and 40 percent restaurant, but the restaurant part will become more dominant, according to Gatti. “Therefore, we believe that the future flagship will be more 40/60 or 30/70, rather than 60/40.”
Smaller formats will also allow the international expansion to thrive, according to Investindustrial. “Why only have one store in Chicago or just two stores in New York, when you could have 10 stores in New York with smaller formats,” Gatti said. Outside the US, the regions of the Middle East and Asia are “very promising”, according to Gatti, although a little under-penetrated presently.
Expansion into some countries may even be achieved without the opening of a store. “There are parts of the world where we cannot pretend to reach with a store in the near future, but then we still have the opportunity through private label to sell some of the most liked products,” said Nauckhoff.
Investing in the food sector is not a step into the unknown for Investindustrial. The firm has poured more than €2.5 billion into the sector and has several Italian companies within its portfolio. These include Doria, a producer of Italian food and beverages; Italcanditi, an ingredients company; and Dispensa Emilia, a restaurant chain.
Like many Italian businesses, Eataly’s foundation is based on a family-owned concept. Nauckhoff cited the “courage and vision” that Eataly’s founders, Oscar Farinetti and his son Nicola, had in understanding the opportunity of teaming up with a PE firm, to help “shape their future”.
In that future, Gatti sees potential for an IPO. “This is a company that could become a great IPO candidate, because the founders would love to create something that lasts forever.”