MILAN — Prada and private-equity fund Equinox Management Co. SA struck a preliminary agreement Friday calling for Equinox to acquire 45 percent of the Church’s Group, the high-end English footwear firm, from Prada Holding. Terms were not disclosed.
News of the pact followed growing speculation Prada aims to sell some of its assets, in a bid to reduce its debt of $827.6 million, now that plans for a public offering are on hold.
In a joint statement Friday, Prada and Equinox projected the deal will fuel growth of the Church’s brand, acquired by Prada in 1999. The Equinox investors include Gruppo Pirelli, Banca Intesa, and Diego Della Valle — an irony as, four years ago, Della Valle battled unsuccessfully with Prada Group chief executive officer Patrizio Bertelli for control of Church’s.
The Equinox investor group purchasing the Church’s stake is not related to the privately held Equinox Luxury Holdings Ltd., which owns footwear firm Jimmy Choo.
In a statement, Bertelli said, "Prada has concluded the restructuring and relaunching phase of Church’s. Now, an agreement with Equinox, which has experience in development financing, will allow us to execute an important growth plan for one of our most prestigious brands, accompanied by an expansion of its product offering."
Expansion of Church’s is contemplated by increasing the brand’s presence in Europe, the U.S., and Asia, and by introducing Church’s first apparel and accessories lines, Prada and Church said in the statement. The agreement also calls for Prada to guarantee the creative, managerial, distribution and financial resources to develop Church’s.
Bertelli could not be reached for further comment Friday.
Timing of the deal’s anticipated closing could not be learned at press time. Prada was assisted in the arrangement by Lazard & Co., and the law firm of Gianni, Origoni, Grippo & Partners. Equinox was advised by the law firm of Bonelli, Erede, Pappalardo.
Prada’s pact with Equinox for the stake comes on the heels of reports that Prada is feeling the heat from Deutsche Bank — one of Prada’s biggest lenders — to reduce its debt load by selling some assets, as noted in WWD. According to one source, Prada could sell Jil Sander, Helmut Lang and/or Azzedine Alaïa. Prada has repeatedly denied those possibilities, but has admitted it is working to sell some real estate assets to generate cash.Full-year results for Jil Sander, reported by Prada last week, showed Sander’s consolidated net loss more than doubled versus a year earlier, to reach $28.3 million. That loss forced Bertelli to inject fresh cash into Sander.
Speculation regarding the Sander business that surfaced last week ranged from a return of Sander to the firm — which she sold to Bertelli in 1999 and left three years ago — to a purchase of the business by Hugo Boss. Marzotto, which has control of Hugo Boss, denied this rumor, and last Thursday a Prada spokesman told WWD there were "no new developments in the relationship" between Sander and Prada.
When Bertelli famously outbid Della Valle for control of Church’s four years ago, the luxury goods sector was booming, with companies regularly posting double-digit sales growth. Bertelli was lured by the tradition of quality at Northampton-based Church’s, a company dating back to 1873. In order to take control of the footwear business, he paid 26.5 times its annual net earnings, shelling out $175.5 million the same week he agreed to buy 51 percent of Fendi in a joint venture with LVMH Moët Hennessy Louis Vuitton.
Despite difficult times for the luxury sector, Bertelli has been busy buying and selling upscale names. He sold his Fendi shares to LVMH in 2001, but that same year, he bought the Genny and Byblos brands. In 2002, Bertelli sold Byblos to Italian Swinger International. In addition to Sander, Lang, Genny, Alaïa, and Church’s, Prada owns Car Shoe.
Since 1999, Prada has streamlined Church’s distribution and updated the product, while maintaining its classic craftsmanship. Today, there are 45 Church’s stores worldwide. The footwear firm’s sales last year tallied $65.2 million. (The dollar figure was converted at the current rate of exchange.) Church’s employs nearly 700, and maintains 95 percent of its production in England, with the rest in Italy, where it makes women’s footwear.
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)
@heriethpaul and @gracebol have a moment on the @victoriassecret fashion show 2017. See every look from the runway on WWD.com. Link in bio. (📷: @giovanni_giannoni_photo) #wwdfashion #victoriassecret #VSFashionShow
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia