MILAN — Italian luxury group Aeffe SpA on Wednesday confirmed it was looking at opportunities to strengthen its business, but denied it was seeking to off-load its underperforming subsidiary Pollini.
This story first appeared in the September 18, 2009 issue of WWD. Subscribe Today.
“It is true we are scouting for possible production agreements using the Pollini platform, but there is no mandate to sell the business,” a company spokeswoman said, countering a report by Reuters, which cited sources saying Aeffe had instructed Mediobanca to find a buyer.
Last year, Aeffe general manager and chief financial officer Marcello Tassinari rebuffed a similar rumor, telling WWD the group had no intention of selling Pollini. At the time, sources said two private equity firms were circling the accessories company.
Since then, Aeffe tapped a new design team for Pollini, appointing British duo Jonathan Sauders and Nicholas Kirkwood in May 2008 as directors of ready-to-wear and accessories, respectively. However, their arrival coincided with the economic downturn and Aeffe revealed plans earlier this year to cut jobs, lower prices, trim collections and streamline its retail network across the group following a 20 percent drop in first-quarter revenues, which sent it into the red.
The slump continued into the second quarter and, by the first half of this year, revenues at Aeffe, which also owns the Alberta Ferretti and Moschino brands and produces collections for Jean Paul Gaultier, had dropped 23 percent to 111.1 million euros, or $147.7 million, compared with 144.6 million euros, or $221.2 million. For the period, Aeffe posted a 10 million euro, or $13.3 million, loss, compared with net profits of 6 million euros, or $9.1 million, in the first six months of 2008. The company did not break out sales by brand.
Dollar figures are converted at average exchange rates for the periods to which they refer.
In August, Aeffe executive chairman Massimo Ferretti explained the group’s performance was affected “not only by the general economic environment, but also by the negative performance of the Pollini division, and, albeit to a lesser extent, by the costs associated with the expansion of our monobrand store network.”
However, he underscored that he was “reassured with the fact that our core business continues to be profitable despite the general decline in consumption.”
As of June 31, Aeffe’s net financial debt reached 88.9 million euros, or $118.2 million, climbing from 66.8 million euros, or $94.2 million, at the end of December.
The company’s share price climbed 2 percent to 0.6 euros, or 88 cents, at the close of trading in Milan.