15/09/2025

BIZ & FINANCE MONDAY | SEPT 15, 2025

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Fitch downgrades credit rating of crisis-strained France

Armani’s will lays path to potential buyout by rival MILAN: Fashion legend Giorgio Armani asked in his will made public last week for a major luxury group to take a stake in his firm, citing LVMH, EssilorLuxottica or L’Oreal as potential buyers. The Italian designer, who died on Sept 4 aged 91, had kept strict control of the business empire built up over five decades, which ranged from haute couture to hotels. But in his will, published by the Italian press, the billionaire said that the foundation which inherits the company should sell a 15% stake to a major fashion house. He named French luxury giant LVMH, cosmetics group L’Oreal and eyewear firm EssilorLuxottica as his preferred buyers, although another of similar stature would also be acceptable. L’Oreal, which has sold Armani perfumes and cosmetics since 1988, said it was “touched and honoured” that Armani had considered the group a potential stakeholder, saying it would consider the idea carefully. LVMH chairman and chief executive Bernard Arnault likewise said he was “honoured”, calling Armani a “true genius”. “If we were to work together in the future, LVMH would set its sights on further strengthening its worldwide presence and leadership,“ Arnault told AFP. Under the will, the new shareholder would have the possibility of taking a majority stake in the group within three to five years of the opening of the will last Thursday. If there is no sale, Armani requested his company be listed on the stock market, with the Armani Foundation retaining 30.1% of the shares. In a statement, the Giorgio Armani executive committee insisted the foundation would maintain a strong influence whatever happened. “The foundation ... shall never hold less than 30% of the capital, thereby acting as a permanent guarantor of compliance with the founding principles,“ it said. These include an ethical approach with “moral integrity and fairness”, the global development of the Armani name, and a focus “on innovation, excellence, quality, refinement of the product and the pursuit of an essential, modern, elegant, and understated style”. Armani’s net worth was estimated at US$11.8 billion (RM50 billion) at the time of his death, according to Forbes magazine. The Milan-based designer had no children and bequeathed his entire company to his foundation. It will be managed by his partner, Leo Dell’Orco, and his nephew and niece. The foundation will hold 10% of the company’s shares and the remainder in bare ownership – ownership without the right of use, according to the will. The foundation will have 30% of voting rights, with another 40% allocated to Dell’Orco and 15% each to his niece Silvana Armani and nephew Andrea Camerana. The designer’s real estate was bequeathed to his sister Rosanna and his niece and nephew. – AFP

much lower credit rating. With bond markets watching closely, Lecornu must find ways to shrink the budget deficit next year from an estimated 5.4% of GDP, though his plan will likely be less ambitious than Bayrou’s 4.6% target. His draft budget is due to be sent to parliament by Oct 7, though in a pinch he could put it off to Oct 13. To win sufficient parliamentary support, Lecornu is expected to make concessions to the Socialists, including higher taxes on the wealthy and softening Macron’s hard-won 2023 retirement reform. But he risks alienating lawmakers in Macron’s own party and the conservative Republicans if he goes too far. France’s downgrade to A+ is unlikely to pressure its major banks, with BNP Paribas and Credit Agricole already rated A+ and Societe Generale a notch lower by Fitch. – Reuters

through Parliament – ordeals that led to the defenestration of France’s last two prime ministers. “This instability weakens the political system’s capacity to deliver substantial fiscal consolidation,” Fitch said in a statement. Finance Minister Eric Lombard said he had taken note of Fitch’s move and that Lecornu was pushing ahead with consultations with lawmakers to get a budget adopted and restore the public finances. Fitch’s downgrade to an A+ score is more consequential than recent downgrades as it could presage peers to follow suit, potentially leading to forced selling of French bonds by investors bound by ratings thresholds. French debt has come under pressure since Bayrou called the confidence vote last month, driving borrowing costs close to those of Italy, which carries the euro zone’s second highest debt burden and a

o Losing AA- status could trigger forced bond selling if other agencies follow

PARIS: Credit rating agency Fitch downgraded France’s sovereign credit score last week to the country’s lowest level on record, stripping the euro zone’s second-largest economy of its AA- status as it grapples with political crisis and ballooning debt. The move, bringing Fitch’s score to A+, heaps pressure on Prime Minister Sebastien Lecornu just days into the job as he scrambles to form a Cabinet and draft a 2026 budget that can pass a deeply divided Parliament. The rating, the lowest on record for a major credit rating agency, has a stable outlook for future moves, Fitch said, attributing its cut to the lack of “a clear horizon for debt

stabilisation in subsequent years”. The downgrade was already priced into markets, analysts said. But the timing of the move is awkward for France, and underlines growing investor concerns over its ability to rein in its budget deficit – now the highest in the euro zone. President Emmanuel Macron last week tapped Lecornu, a conservative loyalist, to form a government after lawmakers ousted veteran centrist François Bayrou in a confidence vote over his plans for a €44 billion (RM219 billion) budget squeeze. Lecornu became Macron’s fifth prime minister in less than two years, and faces a near-impossible task to pass a slimmed-down budget

Sainsbury’s in talks to sell Argos to JD.com A view of Argos’ head office in Milton Keynes, Britain. – REUTERSPIC

LONDON: British supermarket group Sainsbury’s is in talks with Chinese e-commerce giant JD.com about selling the Argos general merchandise retailer it bought for £1.1 billion (RM6.3 billion) in 2016. Sainsbury’s, which has been focusing more on food since Simon Roberts became CEO in 2020, said on Saturday a deal with JD.com would accelerate Argos’ transformation. “JD.com would bring world-class

capitalisation of £7 billion, while Nasdaq-listed JD.com is valued at US$48 billion (RM202 billion). China’s largest online retailer has been seeking to expand outside of its home market. Its €2.2 billion takeover of German electricals retailer Ceconomy is currently being considered by regulators. Last year, JD.com considered an offer for British electricals retailer Currys but walked away. – Reuters

JD.com declined to comment. Argos is the UK’s second-largest general merchandise retailer, with the third most visited retail website in the UK and over 1,100 collection points. Sainsbury’s, Britain’s second largest supermarket group, trailing only Tesco, added that it was committed to delivering the most successful future for Argos, with its current strategy for the business delivering“solid progress”. Sainsbury’s has a market

retail, technology and logistics expertise and invest to drive Argos’ growth and further transform the customer experience,” Sainsbury’s said. It said any sale would include commitments from JD.com in relation to Argos for the benefit of customers, workers and partners. “No agreement has been reached and there is no certainty at this stage that any transaction will proceed,” it said.