And it’s on that basis the Zimmermann family, Style Capital and the advisers on the deal, Rothschild and Italian bank Mediobanca, have secured a big price for the business.

While the financial details around the deal have not been formally disclosed, reports suggest that Zimmermann’s annual earnings before interest, tax, depreciation and amortisation are around $125 million, suggesting the deal has been struck on an EBITDA multiple of about 14 times.

That looks like a very good result for the Zimmermann family (who will retain a minority stake) and Style Capital, according to a couple of key measures.

Listed luxury multiples tell a slightly different story. A quick survey of a dozen luxury companies surveyed by Chanticleer – including LVMH, Hermes, Kering, Moncler, Burberry, Tod’s and Ralph Lauren – suggests luxury businesses are trading on EBITDA multiples between 8.2 times and 32.6 times, with an average around 13.7 times.

So Zimmermann’s sale multiple of 14 times looks strong, but far from silly.

Many of the listed luxury brands mentioned above are bigger than Zimmermann, which goes to the key driver of the deal for Advent: driving the next stage of growth in the business.

Those close to the deal say Zimmermann came through COVID-19 in good shape and has been boosted by the post-pandemic travel boom. But the real secret has been the success Zimmermann’s management – led by Nicky (chief creative officer) and Simone (chief operating officer) and Nicky’s husband Chris Olliver (chief executive) – have had taking the brand to the high-end centres of North America and Europe.

Australian businesses can win the trifecta

The next frontiers are the Middle East – with Zimmermann having recently established a joint venture in Dubai with local luxury goods retailer and distributor Chalhoub Group – and Asia, particularly China.

Advent will no doubt use its experience to help with this push. The firm was an early investor in luxury athletics ware brand Lululemon Athletica, for example, which has been very successful in growing its China sales through an aggressive expansion program there.

The Zimmermann sale is also another triumph for the Australian fashion and luxury sector, coming hot on the heels of the April sale of Melbourne-born cosmetics brand Aesop to L’Oreal for $US2.53 billion, and last week’s sale of sunscreen brand Bondi Sands to Japan’s Kao Brands for $450 million.

Zimmermann and Aesop should stand out as proof that Australian-headquartered consumer businesses can achieve the trifecta: enjoy sustained success in the notoriously fickle luxury sector, find global audiences and attract the right growth capital at the right time.

Which brings us, finally, back to Canva. It’s worth pointing out that even at its reduced valuation of $39 billion, this would be one of the top 15 companies on the ASX – an impressive achievement for an 11-year-old company.

While the drop from its 2021 valuation is big, we should see that 2021 valuation for what it was: a moment of silly froth, albeit one that Canva founders leaned into hard. Investors, including employee shareholders, can now move forward on a more realistic footing.