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Simint Seeks U.S. Partner for A/X Armani

MILAN -- With A/X Armani turning in a six-month loss of more than $8 million, Simint SpA, the Modena-based company behind the U.S. retail chain, is seeking an American partner to help carry the project forward.<BR><BR>The development came to light...

MILAN — With A/X Armani turning in a six-month loss of more than $8 million, Simint SpA, the Modena-based company behind the U.S. retail chain, is seeking an American partner to help carry the project forward.

The development came to light Tuesday, as Simint reported a consolidated loss of $7.6 million (12.9 billion lire at current exchange) in the first half ended Oct. 31. This compares with consolidated profit of 6.6 billion lire a year ago.

Sales in the half were relatively steady at $93.2 million (157.4 billion lire). In the year-earlier period, sales were 158.3 billion lire.

Simint blamed the loss on “the negative performance of the U.S. unit, Simint USA,” whose only activity is the A/X Armani chain.

A spokesman for Simint said the company has hired a U.S. merchant bank to find a partner for the A/X operation, preferably in the retail sector. He said Simint USA lost about $8.2 million (14.1 billion lire) in the half.

“Given that the U.S. operation hasn’t produced the desired results, the company is looking for an established partner who can help carry the project forward. The network has been laid; it needs someone to help make it produce results,” the spokesman said.

He said Simint is not planning to sell off the U.S. operation, however.

In another development, Luca Ramella has resigned from Simint USA as managing director, vice chairman and a director. Ramella was brought into the firm by Milan financier Francesco Micheli, who is a chief shareholder and chairman of Simint, to oversee the A/X project.

Ramella’s operational duties have been taken over by Simint general director Ubaldo Minelli, the spokesman said.

Giorgio Armani, who owns 22 percent of Simint and masterminded the A/X concept, declined to comment on the news.

Micheli controls 26 percent of Simint, Milan merchant bank Sige holds 12 percent, and the remainder is listed on the Milan stock market.

Simint said in a statement that Armani’s commercial director Giuseppe Brusone has been appointed to the Simint board along with Giuseppe Panini, a Modenese businessman and minority shareholder.

Simint also reported it is considering plans to launch a convertible bond issue of $27.8 million (47 billion lire), of which about half would be taken by shareholders. A directors’ meeting has been set for Feb. 10 to approve the issue.

Simint said it is also in the process of divesting nonstrategic interests for some $17.8 million (30 billion lire). Although the company declined to specify the assets up for sale, industry sources said the company is negotiating to sell its Marina Yachting activewear subsidiary.