* Stock up 8 pct in higher luxury sector
* Brokers up TP on better sector prospects, possible tax
(Recasts with comments from source, brokers)
MILAN Jan 11 Italian businessman Andrea Bonomi
has taken a 3 percent stake in Tod's to support
long-term growth at the luxury goods group, a source close to
the matter said on Wednesday, confirming a media report which
sent Tod's shares up 8 percent.
Bonomi made the investment in the shoemaker famous for its
Gommino loafers through his Strategic Capital fund, which takes
minority stakes in listed companies.
Bonomi has made other investments in the luxury and design
industries through his private equity firm Investindustrial,
which in December bought ailing Italian shoe brand Sergio Rossi
from France's Kering.
Tod's, widely seen as a potential takeover target, has seen
sales fall as it struggled to diversify away from its core shoe
business and expand its presence into higher-margin leather
handbags and clothing.
Citi analysts said the departure of creative director
Alessandra Facchinetti last year should help the brand "to
refocus on its core, classic product offering."
Tod's shares fell 15 percent in 2016 against a 16 percent
rise for the sector as a whole. The group's same-store sales
fell 15 percent in the first nine months of 2016. They have
declined for 12 quarters in a row.
The share price was up 9.9 percent at 66.80 euros by 1051
GMT on Wednesday. Traders said target price increases by several
brokers were also helping the stock.
Citi, which rates the stock a "buy", increased its target
price to 69 euros from 57 euros to reflect the possible adoption
of a favourable tax regime which rival Salvatore Ferragamo
agreed in December with tax authorities.
"Under this agreement, a portion of the income generated
from the direct and indirect use of intangibles will be exempt
from Italy's corporate tax rate of around 31 percent," Citi
said. "We believe Tod's might benefit from a similar tax
Also Barclays raised its target price on Tod's in line with
a more positive view for the sector.
Consensus estimates for luxury goods companies are generally
being revised upwards as Russia's economy begins to recover,
higher oil prices support Middle Eastern spending and expected
tax cuts under U.S. President Donald Trump are seen encouraging
Americans to shop.
However, Barclays kept an "underweight" rating on Tod's
saying like-for-like sales would probably continue to fall and
margins remain weak in the short term due to tough competition
in the market for its soft-leather bags and still difficult
(Reporting by Valentina Za and Massimo Gaia; Editing by Susan
Thomas, Greg Mahlich)