Investment funds drive family businesses

From Investindustrial with the listing of Ermenegildo Zegna to L Catterton with Etro, investment funds are supporting italian fashion family businesses. «From 2017 until today, more than 70 M&A deals targeting Italian fashion companies (including supply chain companies) with entrepreneurial/family management have been announced, with a peak in 2018 (20 deals), slowed down in 2020-2021 due to Covid dynamics (12-14 deals)». This was highlighted by Emanuela Pettenò, partner Pwc Italia, consumer markets leader and markets deals leader, who conducted an ad hoc analysis for MFF.

Among the main deals of the last years with private equity protagonists there are, besides the two already mentioned, the one between Missoni and Fsi-Fondo strategico italiano, between Trussardi and Quattro r, between Woolrich and L-gam and the investments of Style capital by Roberta Benaglia in LuisaviaRoma, Forte_forte and Msgm by Massimo Giorgetti. And, again, the operations carried out by Made in Italy fund with 120% Lino, Rosantica, Gcds and Dondup. Some activities, such as acquisitions/disposals or financing, within family-run companies were then finalized by companies already operating in the sector. This is the case of Moncler with Stone island, Naracamicie with Camicissima or Ermenegildo Zegna with Agnona, to name a few. «Most of these operations», specified Pettenò, «took place with the contextual entry of private equity funds that gave guarantees to the entrepreneur of maintaining an active involvement in the management of the company, offering to support its internationalization and managerialization, bringing not only capital for growth, but also skills of a managerial nature».

Alessandro Piermanni, Dla Piper's partner in Italy, pointed out that family businesses are a key element of the global economy, where they account for about 60-70% of all companies, and the backbone of the Italian economy. In Italy they account for more than 90% and, considering only those companies with a turnover of more than 50 million euros, they produce around 40% of turnover, providing employment for more than 45% of the workforce. Family businesses, however, are a winning and fragile model at the same time. «In the face of critical situations such as those brought about by the pandemic, an extraordinary intervention can be a valid and effective means of help. The fashion and luxury industry has shown to be fertile ground for M&A activities despite the spread of the pandemic», added the expert. The data of 2021 also confirm the resilience of the sector, which has vigorously recovered the losses of the annus horribilis and, therefore, according to Piermanni, «it can be stated that fashion & private equity are and will remain a winning combination». Of the same opinion is Luciano Di Fazio, senior partner of Emintad: «Many fashion brands will have to understand how to compete in this new post-Covid era. And for this, in my opinion, private equity funds can be a solution». The funds bring financial resources for the development plan but, above all, they reason in a different and new way on the business model trying to make it evolve in a coherent way with the reference market context.

Moreover, Pettenò of Pwc explained that partnerships with financial investors can be a lever to support and accelerate the listing process. One of these is the case of Zegna, which made its official debut on the New York Stock Exchange on 20 December through a spac promoted by Investindustrial. And it is also the objective of the recent operation of LuisaviaRoma which, through the support of the new minority partner Style capital, aims at the debut on Piazza Affari. The hypo on the Milanese list had been attempted in the past also by Betty blue (which controls Elisabetta Franchi, ed) with Spactiv and abandoned due to the explosion of the health emergency. «As far as future operations are concerned, Armani is definitely the ultimate prize while Otb by Renzo Rosso has already announced its entry on the stock exchange in 2024», concluded the analyst. (confidential reproduction)