MILAN — After securing a $44 million line of credit in February, which reactivated its industrial and commercial activities, Ittierre SpA confirmed Wednesday it has asked for an additional banking facility understood to be for the same amount.
This story first appeared in the October 15, 2009 issue of WWD. Subscribe Today.
“The group clarifies that it has not received any communication regarding the official approvals from the bank committees that are evaluating the request,” Ittierre said. It gave no further details.
Ittierre, which produces collections under license for Just Cavalli, C’N’C Costume National, Galliano and Ermanno Scervino, and parent company IT Holding SpA, which also owns the Gianfranco Ferré, Malo and Extè labels, filed for the Italian equivalent of Chapter 11 bankruptcy protection in February after running out of cash. The additional 30 million euros, or $44.4 million, of liquidity is needed to help keep Ittierre operational while the government-appointed special commissioners continue their efforts to turn the company around, according to sources.
Dollar figures have been converted at average exchange rates for the periods to which they refer.
Commissioners Andrea Ciccoli, Stanslao Chimenti and Roberto Spada invited letters of intent at the end of September to identify possible buyers for some or all of IT Holding’s assets, ahead of submitting a restructuring plan to Italy’s minister of economic development for approval by Nov. 10. Ciccoli told WWD last week the plan may or may not include recommendations to break up the fashion group, although experts believe a sale is likely and more than a dozen potential suitors having already inquired about some or all of the businesses, sources said.
According to the information memorandum on the company seen by WWD, the commissioners expect the group’s losses to widen for the 12 months through March 2010 before recovering, hurt largely by missed deliveries prior to entering administration.
Earnings before interest, taxes, depreciation and amortization at Ittierre are forecast to decline to a loss of 50.1 million euros, or $74.2 million, for the period, from a loss of 17.7 million euros, or $25.2 million, in fiscal 2008-09, on projected revenues of 207.2 million euros, or $306.8 million, from 445.3 million euros, or $634.3 million. Only 50 percent of spring-summer 2009 orders and 85 percent of fall-winter orders were shipped, the lost revenues from which are estimated to account for around 25 million euros, or $37 million, of lost EBITDA. The production and licensing company is expected to break even, or get close to doing so, in fiscal 2010-11 and be profitable from 2011-12.
EBITDA at Ferré are forecast to decline in fiscal 2009-10 to losses of 58.5 million euros, or $86.6 million, from losses of 23.5 million euros, or $33.5 million, on revenues, which are set to halve to 40.1 million euros, or $59.4 million, from 82 million euros, or $116.8 million — although direct sales dropped just 10 million euros, or $14.8 million. Ferré is expected to get back into the black in 2012-13.
EBITDA at Malo are forecast to improve to losses of 7.9 million euros, or $11.7 million, from losses of 22.3 million euros, or $31.8 million, following a reduction in commercial and structuring costs. Revenues are set to fall to 31.4 million euros, or $46.5 million, from 43.8 million euros, or $62.4 million. The knitwear brand is expected to be profitable from 2011-12.