MILAN - Just as Mexican industrial magnate Fabio Covarrubias appeared poised to acquire control of troubled Italian manufacturer GFT SpA, at least one new bidder - and possibly another - has emerged.
Plaid Clothing Group, a U.S. men's wear manufacturer owned by a group of Bahranian investors, has outlined an offer to the Italian banks that control GFT.
One well-placed GFT executive said there are talks with not one, but two new groups, but the identity of the second suitor could not be learned at press time.
According to sources, Plaid Clothing has offered to make a cash payment to the banks covering 60 to 65 percent of GFT's total debt load. Plaid's deal is said to be worth $212 million (360 billion lire) to
$230 million (388 billion lire).
In comparison, the Covarrubias group, which had expected to sign a preliminary agreement with GFT this week, has offered to pay 60 percent of GFT's total debt, plus bank interest for the first few months of 1994.
While Plaid is apparently offering cash, a new agreement could take several months, since it still has to complete due diligence on the Turin-based GFT. Plaid is being represented in Milan by investment bank Euromobiliare.
Covarrubias's offer amounts to $236 million (400 billion lire) in two bond payments. Under the proposal, an initial payment of $74 million (125 billion lire) would be made at the signing of the preliminary agreement. The balance would be paid at the end of July, with Covarrubias then acquiring full control of GFT.
As part of a sale to Covarrubias or Plaid, the banks have agreed to write off 40 percent of GFT's total debt. GFT's total debt amounts to $354 million (600 billion lire), not including debts incurred by its German operations.
Plaid's holdings in the U.S. include J. Schoeneman and The Palm Beach Cos. Executives at Plaid declined to comment on its bid for GFT.
This might not be the first overture Plaid has made to GFT. The company was said to be a contender last year for GFT's Mexican operation, which was eventually bought by Covarrubias.
In early February, Covarrubias said his firm and GFT had reached agreement on "95 percent of the issues on the table."But a GFT executive told WWD Wednesday, "It's a bit like the Ciga hotels story, where Forte talked too much, telling everyone they had a deal when they really didn't; then it turned out Sheraton got it. One of the big issues [with GFT] is that the Mexicans really want to run the company, as opposed to others who are more interested in a return on investment."
According to a spokeswoman for Covarrubias, the Mexican industrialist arrived in Milan Wednesday and is "not worried."
"He's still in position to gain control of GFT," the spokeswoman said.
Reportedly, Mediobanca, the merchant bank that has masterminded the financial rescue plan for the money-losing GFT, presented both offers to GFT's creditor banks on Wednesday.
GFT manufactures for various leading designers, including Giorgio Armani, Valentino, Claude Montana and Emanuel Ungaro. While most designers had initially given a green light to Covarrubias, some now appear receptive to alternative offers.
Giancarlo Giammetti, chairman of Valentino, said: "The financial results have improved so much that we don't have to jump on the first horse. I have recently seen another group [besides the Mexicans]. I can't say who they are, because of a confidentiality agreement, but they are not Italian. "My personal opinion is that maybe GFT doesn't even need to be sold; perhaps it can go on with the banks as a partner."
As reported in January, Clemente Signoroni, GFT's managing director, said 1993 sales totaled $822 million (1.39 trillion lire) and that the company posted an operating profit of $17.7 million (30 billion lire), compared with an operating loss of $11 million (18.6 billion lire) in 1992. He predicted that the company's restructuring plan will result in further improvement in its balance sheet.
Furthermore, GFT's creditor banks recently put together a bridge financing plan of $89 million (150 billion lire) to meet capital requirements under Italian law, to avoid bankruptcy.
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye