Italy’s Mergers and Acquisitions’ Scene – WWD

MILAN – A generation change, the effects of the COVID-19 pandemic and increased global competition have fueled a wave of mergers and acquisitions in Italy – and more are believed to be in the pipeline.

In the second half of the year, it will be interesting to see the early stages of Etro’s development with L Catterton after the Italian fashion house agreed to sell a majority stake in the huge private equity fund in July after months of rumors.

The aim is to grow Etro’s customer base, expand into new categories, improve its digital presence and drive global expansion, with a focus on the opportunities in Asia. Founder Gerolamo Etro, known as Gimmo, is named chairman of the company. Details of the other members of the Etro family involved in the company have not yet been disclosed. Among them are the Veronica siblings, creative director for the women’s collections; Kean, creative director for men; Ippolito, who oversees the strategic management, and Jacopo, who is responsible for the home management. Francesco Freschi is General Manager.

One highly anticipated IPO will be that of the Ermenegildo Zegna Group, which announced in July that it would be through a deal with Investindustrial Acquisition Corp. by the end of the year. or SPAC. The deal is set to give the fashion company a market cap of $ 2.5 billion and help it expand globally. Chief Executive Officer Gildo Zegna will keep his role and add that of the company’s CEO.

The transaction is expected to close in the fourth quarter of this year and the Zegna family will continue to control the company with a stake of around 62 percent. Investindustrial will have an 11 percent stake and 27 percent would be in free float. Based on the transaction value, the combined company will have an estimated initial business value of $ 3.2 billion. At the time of the announcement, Zegna rejected any discussion of a successor. “The family is very united, nothing will change, we will stay as before and the deal was also unanimously accepted by the fourth generation,” he said at the time.

Speculations about the future of the fashion house Giorgio Armani have been circulating for years, but have recently become louder and more persistent. One theory that doesn’t seem to be disappearing anytime soon is the possible link between the Italian designer, who turned 87 on July 11, and the Agnelli family’s holding Exor, owned by Ferrari. Despite persistent opposition from both sides, Milan-based sources claim the final word has not yet been spoken.

There is a connection between Armani and the Agnelli family, as Andrea Camerana, consultant and former license manager of the fashion house, is the son of the designer’s sister Rosanna and Carlo Camerana, a cousin of the late Gianni and Umberto Agnelli. In addition, in March Armani signed a multi-year sponsorship of the Scuderia Ferrari racing team to provide the Ferrari team management, drivers and technicians with formal and travel attire for official events and transfers related to the international Formula 1 races of the Grand Prix .

Armani set up a foundation of the same name in 2016, at a time when independence was a priority for the designer. Observers believe that if the designer finally accepted Exor’s offer, changing the foundation’s statutes would not be a problem.

Exor has been extremely active lately. In June, it expanded its reach and invested in consumer goods by acquiring a stake in Ludovico Martelli SpA, a personal care products company known for its well-known brands such as Marvis, Sapone del Mugello, Valobra and Proraso. The holding has also invested in Hermès International’s China project Shang Xia and acquired a minority stake in Christian Louboutin.

Overall, the wave of acquisitions in Italy has developed into nuanced partnerships and platforms that are intended to support an increasingly relevant, but in the wake of the pandemic, more endangered production pipeline and signal a teamwork approach that is constantly developing in the Italian fashion industry. For example, Gildo Zegna teamed up with Prada boss Patrizio Bertelli on the takeover of the cashmere company Filati Biagioli Modesto SpA, and he has steadily expanded the men’s clothing giant’s supply chain and pointed out additional business in the pipeline – while he came up with the idea of ​​a fashion conglomerate.

Bertelli and his wife Miuccia Prada are increasingly handing over responsibility to their son Lorenzo, who has been Group Marketing Director since 2019 and Head of Corporate Social Responsibility since 2020. Prada has been listed on the Hong Kong Stock Exchange since 2011 and speculates about a possible delisting or a partnership with a major fashion company arise from time to time, but no deal has been reached.

Patrizio Bertelli has long denied an intention to sell, although LVMH Moët Hennessy Louis Vuitton, Kering and Compagnie Financière Richemont have been identified as potential buyers.

Given how many Italian companies are owned by foreign investors or corporations, Made in Italy supporters are advocating the possible creation of an Italian luxury conglomerate.

Renzo Rosso is one of the few Italian entrepreneurs who has spoken openly with his OTB group about building a fashion group. Following the acquisition of Jil Sander from Onward Holdings Co. Ltd. in March, Rosso told WWD that he was also looking to acquire specialized manufacturers, a strategy that would allow a company to “become more solid and build expertise,” he explained while protecting Italy’s unique supply chain. He looks at different areas – manufacturers of handbags and shoes as well as companies that specialize in washes and treatments. Rosso wanted to take over the Roberto Cavalli brand, but in the summer of 2019 that company also passed into foreign hands, to Vision Investment Co. LLC, which is controlled by the founder and chairman of the Dubai-based developer Damac Properties Group, Hussain Sajwani.

Unlike Rosso, Moncler Chairman and CEO Remo Ruffini denied any interest in forming a conglomerate when the company he ran took control of the Stone Island brand last year.

Shoes remain a hot category, as demonstrated by Investindustrial’s sale of the Sergio Rossi brand to the Fosun Fashion Group last month and rumors of a possible sale of the Gianvito Rossi and Aquazzura labels have been circulating among financial sources for some time. Florence-based retailer LuisaViaRoma, which has a strong online business, should also be an interesting business for investors.

Another group that is being watched by analysts is Tod’s SpA. In April LVMH increased its stake in the Italian company to 10 percent. Analysts have long speculated about a possible sale of the group, which includes Hogan, Fay and Roger Vivier in addition to the Tod’s SpA brand, and point to Bernard Arnault as a possible buyer. Tod’s chairman and CEO Diego Della Valle has repeatedly denied the company is for sale and has repurchased shares with his brother Andrea over time.

You can also see the new luxury production site Gruppo Florence, led by luxury veteran Francesco Trapani and founded by VAM Investments, Fondo Italiano d’Investimento and Italmobiliare. The aim is to develop a platform to supply large luxury fashion brands with high quality Made in Italy products while protecting the technical and cultural know-how of small and medium-sized Italian family businesses. Since it was founded last October, Gruppo Florence has acquired five renowned Italian manufacturers, including Emmegi, a Lombardy-based company founded in 1880 that makes informal outerwear for men and women. And there is no sign that the group wants to quit now.

The Made in Italy Fund managed by Quadrivio and Pambianco, which invests in wine, food, beauty, fashion and furniture, is also planning further acquisitions, according to partner Mauro Grange. The fund has so far invested in 10 Italian companies, six of them in the fashion sector alone, from 120% Lino and Rosantica to Dondup and GCDS, and most recently a majority stake in the shoe brands Ghoud and Autry.

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