By  on April 18, 1994

MILAN -- Change is in the wind at Simint SpA, the Modena-based sportswear company behind A/X Armani Exchange.

In a number of related developments, Simint last week elected a new board of directors and officially appointed Massimo Varazzani its chairman.

Varazzani immediately said he plans to reorganize the money-losing firm, a move that could involve reducing Simint's work force. Details of the reorganization will be made public April 29, when the company intends to name a new chief executive officer.

A Simint spokeswoman added that the company has begun talks with an American investment firm for a possible joint venture that would improve the performance of Simint USA, the division responsible for A/X Armani Exchange.

The spokeswoman also reported that the new board will examine the papers of the former administration for possible irregularities and, should any be found, Simint will pursue legal action.

Varazzani's appointment as chairman came as no surprise. He took the reins at Simint after the January resignation of Luca Ramella, ex-managing director, vice president and a director, and the retirement of financier Francesco Micheli, who, in February, sold his 22 percent stake in the company to Giorgio Armani and his sister Rosanna Armani.

Varazzani continues to be the central director of Sige, the merchant bank that owns 10 percent of Simint.

Simint SpA's consolidated loss for the six months that ended Oct. 31 reportedly exceeded $7.6 million (12.9 billion lire), due primarily to the A/X Armani Exchange retail operation. Simint USA, the U.S unit whose sole activity is the A/X Armani chain, lost an estimated $8.2 million (13.4 billion) in the half. Simint SpA controls 70 percent of Simint USA.

Simint SpA's sales for the fiscal year of 1993/1994 should reach $184 million (380 billion lire), according to the spokeswoman.

To generate fresh capital, the company's three leading shareholders have agreed to underwrite a $27.8 million (47 billion lire) convertible bond issue.

Giorgio Armani retains 22.5 percent of Simint, while Rosanna Armani has 17 percent, giving them overall control of 39.5 percent of Simint's ordinary shares.

A spokeswoman for Giorgio Armani said it was "premature to comment on the events and [we] will do so after the meeting on April 29."

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