MILAN — Three years after Brioni initiated a search for aninvestor, the Italian men’s powerhouse could be nearing a sale — and tonone other than PPR.
The French group that owns Gucci firstemerged as a possible investor in Brioni in 2009 after the Italiancompany tapped BNP Paribas in November 2008 to help sell a 20 to 25percent stake. A prospectus was said to have reached a short list ofpotential investors, including PPR, LVMH Moët Hennessy Louis Vuitton andMediobanca. Later that year, Brioni said it was no longer seeking aninvestor.
Now the need for an injection of cash is a priority,according to sources.
“A sale is highly likely and it would makesense to sell to PPR,” said one industry source. “They need capital tohelp relaunch the brand because they are weighed down by debt of almost100 million euros [$144.6 million], they need a vision, and they need tomodernize their manufacturing capabilities and structure.”
Thesource said Brioni is appealing to PPR, which has been divesting itsretail assets and focusing on its luxury and sports brands. “The brandis unique, as there are only two or three [men’s wear] firms with suchknow-how, exclusive positioning and international visibility to boot,”according to the source, who requested anonymity. “It’s a brand that hasmagic and huge potential. If managed the right way, it can beincredibly successful.”
The PPR name surfaced once again inconnection with Brioni in a report in Italian daily Corriere della Seraon Wednesday. Both PPR and Brioni declined comment on the story.
Partof Brioni’s debt stems from the company’s buyout of former chiefexecutive officer Umberto Angeloni for an estimated 80 million euros in2006, or $104.8 million at average exchange rates for that year. In his16 years at the company, Angeloni was instrumental in building Brioniinto a luxury lifestyle brand.
“I hope it really happens, forthe good of the brand and of the business,” Angeloni told WWD onWednesday. “A global luxury group such as PPR can definitely bring theurgent financial and managerial support needed to revive the lifestylecomponent of the brand. And, even more importantly, it can resetBrioni’s strategic direction in tune with the new competitive scenarioand consumer sentiment.”
The executive is now ceo and majorityshareholder of luxury Italian tailoring brand Caruso.
One sourceestimated the price tag for Brioni could range upward of 300 millioneuros, or $395.8 million at current exchange. Another industry sourcesaid: “I know Brioni shareholders are in talks with possible partners,they are surely working on inking a deal because they need to invest anddevelop their business in Asia.”
The source said Brioni needs“to update its structure to keep up with the industry and to define amore contemporary vision to avoid lagging behind.”
OneMilan-based luxury goods analyst confirmed that Brioni is “fine tuningits shareholders’ structure.”
Indeed, one sticky issue, whichmay have prevented the sale in the past, is the company’s complicatedfamily ownership.
The controlling shareholders of Brioni are thedescendants of the company’s founders — Nazareno Fonticoli, the mastertailor, and Gaetano Savini, the original fashion coordinator. Among themare Antonella De Simone, a granddaughter of Fonticoli; Anna MariaFonticoli; Maria Vittoria Fonticoli, and former ceo Andrea Perrone, thegrandson of Savini. In November 2010, after almost four months without aceo, Brioni tapped Francesco Pesci to head the firm, succeedingPerrone, who resigned in July of that year. Perrone previously sharedthe role with De Simone.
“The family originally wanted to sell aminority stake, but I doubt that would sit well with an investor suchas PPR,” said a Milan-based source. “Whoever comes in will want to havecontrol.”
Brioni, known for its exclusive, handmade and tailoredmen’s suits worn on-screen by James Bond and Tom Hanks’ Robert Langdonin “The Da Vinci Code” and “Angels & Demons,” has also been raisingits women’s wear profile. In May 2010, the company tapped AlessandroDell’Acqua as creative director of its women’s line, and the designerhas been targeting the brand’s female counterpart with luxurious andglamorous designs.
Based in Penne, Italy, the company, whichcelebrated its 65th anniversary last year, posted sales of 153 millioneuros, or $212.6 million, in 2009. Pesci told WWD last year that heexpected to close 2010 with a 10 percent gain.
Shares in PPRclosed up Wednesday by 0.93 percent at 130.30 euros, or $188.47 atcurrent exchange.
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