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MILAN — Safilo Group SpA will not sell house brand Carrera and is highly unlikely to sell the Smith brand — even if the latter remains a possibility — to reduce crippling debts.
This story first appeared in the August 27, 2009 issue of WWD. Subscribe Today.
“Safilo Group SpA categorically denies the potential sale of the Carrera brand. With reference to Smith, the company clarifies that a potential sale, while possible, remains highly unlikely and completely residual in the context of a possible plan to restructure the group’s debt,” Safilo stated Wednesday.
An Italian newspaper reported Tuesday that the eyewear maker, which has licenses with Armani, Dior, Gucci and Valentino, among others, could sell nonstrategic assets, citing sports brands Carrera and Smith, which Safilo acquired in 1996, and retail chains outside of Italy, or use them as a guarantee against further funding.
Safilo, which at June 30 had net debts of 592.1 million euros, or $847 million, said last month it would focus on its core business and explore alternative ways to ease its debts after recapitalization talks with private equity funds Bain Capital and PAI Partners fell through. The eyewear firm has secured an extension to the end of the year on a loan payment due in June and a waiver on the respective debt covenants.
Safilo needs a cash injection of at least 250 million euros, or $357.6 million, according to analysts, who favor a sale to Italian rival Luxottica Group SpA. The Tabacchi family controls 39.9 percent of Safilo via Only 3T SpA.
Dollar figures were converted at average exchange rates for the periods to which they refer.