Italian funds seek for brands

Italian private equity are seeking for brands. From Quadrivio Group, which with a fundraising target of 500 million euros is ready to kick off another round of investment through its new Made in Italy Fund II, to Style capital, which is launching a second fund, also for 350 million euros. «In 2022, 60 deals were announced in the fashion and luxury sector in the Italian market, about 45% of which were concluded by financial operators or holding companies, led by supply chain aggregation deals mainly scored by the Florence and MinervaHub groups, which were subject to acquisition by the Permira fund and the San Quirico family office respectively between April and May 2023».

This was explained by Emanuela Pettenò, PwC Italy markets deals leader, and Anna Nasole, director at PwC advisory, who conducted exclusive research on the topic for MFF. The trend has been confirmed in the first months of 2023, with various supply chain deals announced by the Florence group and Holding moda (Hind) (Industrial holding). There is also growing interest on the supply chain from larger-scale industrial groups as well, with two different modes of operation: acquisition of a total or large majority stake, as it happened from Lvmh Métiers d’Art on Conceria Nuti Ivo in May, or acquisition of a minority stake by two strategic investors, from Ermenegildo Zegna and Prada on Filati Biagioli Modesto in June 2021 and on Maglificio Luigi Fedeli & Figli in June 2023, or Chanel and Cucinelli on Filati Cariaggi last May as well.

In addition to supply chain aggregation operations and the creation of production clusters, the funds remain interested in emerging brands and made-in-Italy realities of excellence with potential for international development fostered by the grafting of new capital and managerialization. As in the case, they reported, of Power, a brand of technical footwear for professional use recently acquired by the NB Renaissance fund together with Style Capital. Roberta Benaglia’s fund, by the way, announced in april that it had bought 80% of Gdm Milano, a company linked to Giuseppe di Morabito brand, a designer born in 1992 and beloved by Lady Gaga and Zendaya. Regarding what could happen in the upcoming months, especially considering the liquidity available to the funds, «transactions are expected on various fashion and cosmetics brand, both in private equity portfolios and still independent,» PwC experts clarified.

The brands on which there are rumors of sale processer or Ipos include Autry and Ghoud, two labels that currently belong to Quadrivio’s made in Italy fund, and Golden Goose, which is owned by Permira. For a moment, it seemed that Moncler was interested in taking over the footwear brand, but according to a statement to MFF, the group led by Remo Ruffini has ruled out any interest in the trainer brand controlled by Permira, reiterating that it is focused on its two brands, Moncler and Stone Island. In addition, there is also Zimmerman of Style capital, which apparently wants to sell its assets. It would seem that the dossier is already circulating on the desks of some of the major financial players and that preliminary discussions are already underway. The Florentine perfume brand could also be sold by private equity Bluegem capital partners. According to rumors, VeraLab, the cosmetic company created by Cristina Fogazzi, also known as the Cynical esthetician, has entrusted an exploratory mandate to the merchant bank Rothschild to identify a minority shareholder to support the Brescia-based company’s expansion plans. Months earlier, Fogazzi has stated that she was thinking of a future listing of the brand. Mariano Di Vaio is also looking for funds or partners for his company Nohow. Meanwhile, Renzo Rosso’s Only the brave (Otb) group and the giant Richemont have set their eyes on Gianvito Rossi.

Last but not least, when it comes to IPOs, Birkenstock could be the next fashion brand to go public this year. Its parent company, the private equity firm L Catterton, which operates in the orbit of the luxury giant Lvmh is in fact evaluating various strategic options for the brand. «Italian funds specializing in the sector are however also attentive to opportunities on the international scene, with particular reference to fast-growing brands with a digital presence» Pettenò and Nasole said, then adding that the financing of brand deals under current market conditions is not easy, and therefore sees strategic investors favored on medium-sized deals and minority-exit deals on larger ones, compared to traditional private equity deals. «In terms of supply chain deals, competition is and will be increasingly aggressive between hubs (fund-sponsored and independent) and industrials» the experts concluded. (All rights reserved)