MILAN — Uncertainty is once again clouding the future of the Gianfranco Ferré company.
According to sources, the state-appointed administrators who oversaw the sale of Ferré to Dubai-based Paris Group in February have requested Italy’s minister of economic development to schedule a meeting with the new owner on Monday to question the management of the firm so far. The commissioners are charged with monitoring Ferré for 24 months after the sale, which allowed the firm to emerge from almost two years of government-backed bankruptcy protection.
Sources say Paris Group, owned by Abdulkader Sankari and his son Ahmed, who took on the role of chairman, fired Ferré’s management after the spring fashion show last month, although chief executive officer Michela Piva is allegedly on sick leave. “Paris Group has stalled all activities of the company without any commercial strategy,” said a well-placed industry source. “There is proof of disorder, suppliers are not being paid, and the unions are complaining.”
At the time of the acquisition, Paris Group said it planned to relaunch and expand the brand internationally.
Another source contended the changes at Ferré are nothing unusual. “It is normal for new owners to change managers, although it is true in this case, the decision came late,” this source said, but added that, “It is also true that Paris Group is lagging behind on the relaunch of the brand.”
It is understood the commissioners are trying to revoke the sale to Paris Group, which, according to one source, is set on holding on to Ferré. Conversely, another industry source speculated that Paris Group might be looking at cashing out from the deal, as a new group of investors is eyeing the brand. These include the Korean E-Land Group, which, in July, took control of Italian accessories firm Mandarina Duck. The group has formed a venture with Kate Spade in Mainland China and has more than 40 retail nameplates and is gradually forming a fashion conglomerate, as it has over the past year bought Italian sportswear brand Belfe and footwear group Sutorio-Lario, which includes the Lorenzo Banfi label. Others said to be interested in Ferré are a Chinese fund, and a pool of investors headed by former Ferré ceo Enrico Mambelli, who exited the company in summer 2004.
One source attributed Paris Group’s shuffle on Ferré to “a lack of vision and tools to deal with a luxury brand.” The owners did not invest in the company, whose sales have dramatically shrunk and are now mainly derived from licenses, according to the source. “Perhaps they wanted to reduce Ferré to a licensing business,” he speculated.
The purchase price for Ferré was never disclosed, but sources estimated Paris Group spent between 10 million and 20 million euros, or $13.5 million and $27.1 million, for the company. Paris Group was founded more than 20 years ago by Abdulkader Sankari and is a fashion distributor and franchisee in the Middle East, where it operates more than 250 stores in the United Arab Emirates, Kuwait and Saudi Arabia for brands ranging from Versace and Cerruti to Canali and Ferré itself.
Ferré held two runway shows on Sept. 26 during Milan Fashion Week. The collection for spring was designed by Stefano Citron and Federico Piaggi, veterans of Mila Schön, Byblos, Cruciani and the house’s secondary GF Ferré line, who added a graphic and sophisticated touch to the looks. It is understood, however, that they work on a consultancy basis. They succeeded former creative directors Tommaso Aquilano and Roberto Rimondi, who were ousted in April, although Ferré never officially communicated the news. Ferré skipped a season of pre-collections this spring and the spring men’s wear season.
Designer Gianfranco Ferré died in June 2007. The Fondazione Gianfranco Ferré was established in February 2008 to honor and preserve his work.