By  on February 8, 2006

MILAN — Italian brand Malo is staging its first runway show in New York today in a bid to generate buzz and win over new customers in the U.S. market.

Just as Malo aims to convert itself from a sleepy knitwear brand into a luxury label, its parent company, IT Holding SpA, is undergoing a transformation of its own. Last year, IT Holding lost its biggest and most lucrative license, for Dolce & Gabbana's D&G collection.

IT Holding ascended as a manufacturing power in the Nineties, pioneering the concept of diffusion lines such as Just Cavalli, Versus and Versace Jeans, but since has faced a series of setbacks, including lost licenses, a debt pile amassed from a past acquisitions binge and the ongoing restructuring of its unprofitable Gianfranco Ferré business.

D&G's departure prompted inevitable changes at IT Holding, including a new five-year licensing pact for a John Galliano diffusion line and a renewed focus to grow wholly owned brands such as Ferré, Malo and Exte. IT Holding also witnessed the launch of a new minority shareholder, Monte Carlo-based jeweler Alberto Repossi, who wants to make Ferré-branded baubles for the group.

"I don't know if it is because we are very good or also just a bit lucky, but after Dolce & Gabbana, we got the number-one designer in terms of creativity and notoriety," IT Holding president and chief executive officer Tonino Perna said of Galliano during an exclusive interview at company headquarters here. "Galliano will need time to grow, to reach large-scale volumes. But we have also planned for internal growth with all of the other lines, so I would say that we have compensated [for D&G] well."

Galliano alone won't fill the void D&G's departure has created, however. D&G generated about 200 million euros, or $240 million, in sales for IT Holding, nearly 30 percent of its consolidated revenue. Galliano and IT Holding expect their new venture to generate about 100 million euros, or $120 million, in wholesale revenue over the next three to five years. Perna said IT Holding will make up the rest of the lost D&G revenue through growth of other licensed lines such as Just Cavalli, Versace Jeans Couture, C'N'C Costume National as well as in-house labels Ferré, Malo and Exte.

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