MILAN — Sources here say Prada Group has sold its 55 percent stake in Church’s to private equity fund Equinox Investment, which already owned 45 percent of the English footwear firm.
This story first appeared in the October 28, 2003 issue of WWD. Subscribe Today.
Equinox Investment has no relationship to the privately held Equinox Luxury Holdings Ltd., which owns footwear firm Jimmy Choo. Equinox Investment is an independent firm based in Lugano, Switzerland, and is headed by Salvatore Mancuso.
A Prada spokesman did not confirm the sale, and said, “We are currently exploring this possibility, but nothing has been finalized yet.”
Founded early last year, Equinox Investment has capital of $265.2 million, converted from 225 million euros at current exchange. Gruppo Pirelli, Banca Intesa, Milan’s Bocconi University, Tod’s Diego Della Valle and Luxottica’s Leonardo Del Vecchio are among some of the investors. Last year, Equinox Investment acquired 15 percent of Moby Invest SpA, the shipbuilding holding company headed by Vincenzo Onorato. During the last Louis Vuitton Cup, Onorato’s sailing boat Mascalzone Latino raced against Prada’s Luna Rossa.
The transaction would be in line with Prada’s efforts to reduce its debt before attempting a public offering, which the company has said might take place in the second half of next year at the earliest.
Over the past two years, Prada has sold its stake in Fendi, the Byblos business and part of its real estate assets. As reported, debt net of credits stood at $907.8 million, or 770 million euros, at the end of 2002, and Prada expects the figure to be at $353.7 million, or 300 million euros, by the end of 2004. Prada now owns Jil Sander, Helmut Lang, Genny, Azzedine Alaïa and Car Shoe.
Four years ago, lured by Church’s tradition of quality — the company dates back to 1873 — Prada chief Patrizio Bertelli paid 26.5 times the company’s annual net earnings, shelling out $175.5 million. Over the past four years, Prada restructured Church’s by streamlining its distribution and refocusing the product. In an interview this year, Prada chief financial officer Riccardo Stilli said that, through the partnership with Equinox Investment, Prada aimed to boost sales of Church’s to $106.1 million (90 million euros) in two years and to more than $117.9 million (100 million euros) in 2006.
Today, there are 45 Church’s stores in the world. Last year, the firm registered revenues of $70.7 million, or 60 million euros.
Stilli said Prada was focused on continuity at Church’s, a continuity maintained through three members of the founding family: Sir John Church, the company’s former chief executive, now honorary president; his son William, in charge of production, and his nephew Jonathan, financial director of Church’s in England.
Stilli declined to disclose the financial terms of the agreement, but firmly denied press speculation here that Prada sold 45 percent of Church’s to Equinox Investment in April for about $37.7 million (32 million euros).
Besides Church’s, the company puts out a younger, less expensive brand called Cheaney.