M&A, the hot autumn of the supply chain

The fashion supply chain has become a hunting ground where «prey» is contested by three different teams, each consisting of several players. The first to enter the supplier pool were the luxury groups, particularly the French (in order of size: Lvmh, Kering and Chanel) but with a good level of activity also the Italians (Prada and Zegna), equipped with resources to ensure continuity of supply and guarantee stability for their established partners.

These have been joined by new holding companies dedicated to setting up production groups to serve the fashion brands: standing out are Gruppo Florence, about two-thirds controlled by a consortium led by Vam investments, Fondo italiano d'investimento and Italmobiliare (with the remaining 35% being held by the founding families of the acquired companies), and Minervahub, created through the merger of Xpp seven and ambria holding. The third team consists of private equity funds, whose entry has been gradual, but the prospects are for further acquisitions, even in the short term.

After all, the current autumn has been marked by several closings on the M&A front and involving Italian suppliers of various profiles, from clothing-related processing to footwear and materials, particularly leather tanning. The most active have been new industrial groups. Ten days ago, the latest acquisition by Gruppo Florence, that of Marche-based denim specialist Ideal Blue, was made (see MFF of November 15), and the closing brought the number of companies in the group chaired by Francesco Trapani to 21, with a total turnover of 500 million euros.

In September, speaking at the inauguration of Mipel lab, ceo Attila Kiss announced future moves, in particular the entry into the footwear manufacturing business that later materialized with the acquisitions of Novarese and Lorenza calzaturificio in late september and Taccetti in early November. The year is not over yet, and just in December, according to rumors, operation number 22 should materialize with the arrival of a company specializing in knitwear. Then, in 2023, a new front could open: that of leather goods. The goal is to reach 40 companies with revenues between 700-800 million euros by the end of next year. Also in full swing is MinervaHub, which just last week announced the entry into the Group of mold maker Gruppo meccaniche Luciani and, an even more significant move, of an alligator farm in the US, Audasit, thus stretching the verticality of the supply chain from its tannery (Zuma pelli pregiate) to the sourcing of reference raw materials.

Today MinervaHub groups nine companies together, but the number is set to grow: the company appointed Rothschild for a further capital opening, with the goal of climbing from the current 180 million in revenues (with 50 million in Ebitda and a net profit of 15%) to 300 million by the first half of next year. The companies targeted by this industrial reality are specialists in production stages or services with high added value and focused on the accessory. The perimeter thus excludes pure subcontractors, on which MinervaHub would end up clashing with its own clients, namely luxury brands that are quite active on this front at the M&A level. «I am convinced that MinervaHub, due to its industrial consistency, is an important consolidation project for the Italian supply chain,» President Matteo Marzotto told MFF, further specifying that “direct acquisitions by high-end brands are useful for their consolidation, but the capacity for innovation originates from a creative force that is fed externally. And we are investing tens of millions a year to nurture the creative force of Made in Italy through maintaining technological leadership.

This is an indispensable step because technology is part of contemporary craftsmanship”. Also in full development is the Holding moda project promoted by Hind holding industriale spa, which has created a group of ten supply chain companies with a consolidate pro-forma at the end of 2022 of 185 million euros and 760 employees. The last two transactions, in September, involved the Rilievi Group and Seriscreen, but founder and president Claudio Rovere outlined the next steps: «We are looking both upstream in the supply chain, weaving and spinning, and at completing the current product categories, with the arrival of a formal footwear company and a knitwear company. We have some negotiations underway and should come to an agreement by the end of the year, and then proceed with the closing in the first quarter of 2023». Finally, there is a prospect of strengthening the build-up project, Margot, launched in 2019 by Mindful capital partners (mcp) with the investment in Eurmoda, which was later joined by Alce and a.b.c. Morini to form a leading group in the high-end leather and apparel metal accessories sector, with the goal of reaching 55 million in revenue by the end of the year. Mcp Managing partner Andrea Tuccio stated: «There are open negotiations, and they involve companies that would allow us to establish supply relationship with brands that are not currently followed, but also to manage technologies that are outsourced today. We will finalize at least one of these negotiations in the upcoming months».

He then added, «Brands look favorably on aggregations in the supply chain, because they bring two worlds that were speaking different languages closer together, for size reasons, and ensure a future for supply chain productions that were in danger of disappearing». (All rights reserved)