By  on May 23, 2006

MILAN—Mariella Burani Fashion Group said Monday it expects to raise 105 to 125 million euros, or $132.7 million to $157.9 million at current exchange, from the flotation of its accessories subsidiary Antichi Pellettieri.

MBFG plans to list 14.7 million shares of Antichi Pellettieri on the Milan bourse. The retail offering has been set for between May 26 and June 1. Trading will commence June 7. The shares will be priced at between 7.15 euros and 8.50 euros, or $9 and $10.70, per share. Capitalia and Mediobanca will be the listing partners, global coordinators and book runners.

MBFG will sell up to 2.2 million shares, or 15 percent of the global offering. "This will provide an important gain for MBFG: We are thinking of our shareholders," said Giovanni Burani, chairman of Antichi Pellettieri and chief executive officer of MBFG.

"We might offer extraordinary dividends. In any case, we will focus on our company-owned brands, and maybe even re-create an Antichi Pellettieri conglomerate of different product categories," said Burani.

Antichi Pellettieri, created in 2000, includes the Braccialini, Baldinini, Francesco Biasia, Sebastian and Coccinelle brands. Coccinelle, which produces handbags for Miss Sixty under license, was purchased last month. There is also a small apparel division, which accounts for 8 percent of sales and comprises GFM Industria SpA and Enrico Mandelli SpA. This division produces the Ter et Bantine and Anglomania of Vivienne Westwood brands, among others.

"The listing is stimulating for our management, and it conveys the idea of where the company is headed," said Burani. "Managers own 8 percent of the capital, and they have a palpable value of the company. We're replicating what we did with MBFG."

MBFG was listed in 2000. "The secret of a good conglomerate is to maintain the managers within the separate companies," said analyst Carlo Pambianco, head of Pambianco Strategie d'Impresa. "The Burani family lets the managers run the companies, while adding strategic support," said Pambianco, noting that, in addition, "this is a group where brands are well balanced."

Fabrizio Malverdi, in charge of business development, said the listing of Antichi Pellettieri was always in the cards, but that this was the right moment to carry it on. "There is a very favorable state tax on capital gains that was approved by the previous government," said Malverdi, also citing a generally positive stock market.In 2005, Antichi Pellettieri reported sales of 154 million euros, or $194.6 million, up 16.4 percent from the previous year. Ebidta grew 33 percent to 20.2 million euros, or $25.5 million, which the company attributed to outsourcing and an improved sales mix. In the first quarter, revenues jumped 34.6 percent to 56.5 million euros, or $71.4 million, which the company attributed to double-digit growth of the Braccialini and Baldinini brands, the expansion of a direct distribution network and a 72 percent increase in sales in the Far East. Ebidta grew 142.5 percent to 8.6 million euros, or $10.8 million, in the quarter. Antichi Pellettieri said this gain was due to a streamlining of production and distribution, better integration and an improved sales mix.

Burani said Antichi Pellettieri's mission is to become "a world leader in the accessible luxury segment," and that he "really believe[s] in accessible luxury, which protects itself well in tough times," setting Coach as the group's model. Antichi Pellettieri produces 2.6 million pieces per year. Handbags retail for between 150 and 300 euros, or $190 and $380, while footwear retails between 350 and 400 euros, or $440 and $500.

"We plan to expand in Russia, Eastern Europe, the Middle and Far East and Japan, as this market today is much more open to accessible luxury, and not only high-end luxury goods," said Burani. Itochu owns 3.3 percent of Antichi Pellettieri, which has helped the company grow in the Far East.

Exports account for 59 percent of sales. The group lists 119 boutiques, of which 83 are franchised, around the world. Burani said he plans to open between eight and 10 brand boutiques each year in the next three years.

LVMH Moët Hennessy Louis Vuitton's investment fund L Capital currently owns a 6 percent stake in MBFG, but no longer has a stake in Antichi Pellettieri.

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