MILAN — Aeffe, the Italian clothing manufacturer that controls the Alberta Ferretti, Moschino and Pollini businesses, said Thursday it is planning an initial public offering here.
Aeffe said it has deposited the documents to request an IPO with the Italian Bourse and stock market regulator Consob. "We are looking at a listing in the STAR segment of the Bourse," said Aeffe chairman Massimo Ferretti.
Medium-sized, family-owned, highly specialized or technically skilled companies generally target STAR. Mediobanca and Merrill Lynch International have been tapped to be global coordinators of the offering. In a statement, Aeffe said it has decided in view of the listing on a capital increase.
Although talk of an Aeffe IPO first surfaced in 2000 and picked up two years later, Ferretti said last November that the listing "was not a priority." At that time, Aeffe bought back a 20 percent stake in the group from merchant bank Sanpaolo IMI — a move made to directly control management and strategy, which was perceived by the industry as effectively scrapping the idea of an IPO.
"The market is very favorable, Aeffe is growing well, and we wanted to be more autonomous in order to directly decide and manage our future strategies," Ferretti said then.
Armando Branchini, president of luxury goods consultancy Intercorporate, said he believed Aeffe decided to do an IPO because it "wants to invest in retailing, the most costly area in the luxury business." Branchini said Aeffe is a "very healthy company that works well, is managed wisely, and the fact that it is planning a listing indicates as much. It has a very positive track record, and this is a modern choice."
Branchini said the IPO could happen as early as this fall, adding that this is a very positive moment for fashion and the Bourse. Last summer, Salvatore Ferragamo also revealed plans to go public in the near future.
Aeffe is indeed mapping out the opening of new stores around the world, in particular in emerging markets. In 2007, the group will open Alberta Ferretti boutiques in Beijing and New Delhi, Moschino boutiques in New Delhi and Istanbul, and Pollini stores in St. Petersburg and Moscow, to name a few.Luxury goods analyst Carlo Pambianco said, "The Bourse is in a phase of high values, so the sooner the better," adding he was not surprised by Ferretti's decision. "Aeffe is a solid company in terms of production and creativity, but it needs to take a leap to grow quickly and internationally," said Pambianco.
"If there is one group that should go public, it's this one," said Mario Boselli, head of the Italian Chamber of Fashion. "Ferretti is a serious, practical man who has shown his skills in growing the company. He has a portfolio of consolidated brands, but he is also interested in young talents, and the listing will help finance their growth."
Ferretti and his sister, designer Alberta Ferretti, now control 100 percent of the company, which also manufactures and distributes collections for Jean Paul Gaultier and Narciso Rodriguez, although the relationship with the latter is known to be strained. Earlier this year, Pollini inked a deal to produce a footwear collection for Dsquared. Industry sources here also say Aeffe is negotiating a production agreement with Marithé et François Girbaud.
Aeffe is based in San Giovanni Marignano, on Italy's Adriatic coast, and was founded in 1980 as a clothing manufacturer, quickly forging a reputation for the tight relationships it developed with its designers. Aeffe inked its first license in 1983 when it began producing Moschino's initial women's collection. Five years later, Moschino and Aeffe launched the Moschino Cheap & Chic diffusion line. In 1999, Aeffe purchased Moschino, and, in 2001, it took control of accessories firm Pollini, developing it into a ready-to-wear collection, which is now designed by Rifat Ozbek.
In order to expand and accelerate the growth of the Moschino and Pollini businesses, Ferretti last year sought out chief executives dedicated to the single brands, appointing Thierry Andretta and Antonella Tomasetti at Moschino and Pollini, respectively.
Although Ferretti declined to provide details of the IPO or financial aspects of the company, at the end of last year, the executive told WWD he was particularly upbeat about business in 2006, a year that registered a 34 percent increase in pretax profits to 12.3 million euros, or $16.4 million at current exchange, on a 6 percent rise in sales to more than 260 million euros, or $346 million. Earnings before interest, taxes, depreciation and amortization rose 8 percent to 30.9 million euros, or $41.2 million. Ferretti attributed the results to a reorganization of the company, additional group synergies and a "significant improvement in the retail division."
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