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Ittierre’s Financial Woes Mount

The future of the company hinges on finding a financial partner since the firm has asked the Court of Isernia to prepare a plan to avoid bankruptcy.

A view of the Ittierre store.

MILAN — A financial crisis is looming over Ittierre SpA once again.

According to multiple sources, employees at the headquarters of the manufacturing company in Pettoranello, near Isernia, Italy, received their last paychecks at the end of July and several suppliers have not been paid for months.

As reported, in September owner Antonio Bianchi spoke of cutting the group’s workforce and said that he was seeking a financial partner. The future of the company hinges on finding a partner since Ittierre has asked the Court of Isernia to prepare a plan for the repayment of creditors to avoid bankruptcy. “Bianchi has two months to present an industrial plan to the court, otherwise the risk is it may even go bankrupt again,” said a source, who spoke on condition of anonymity.

The source said there are “solid entrepreneurs that are interested in buying Ittierre.” Bianchi took control of the firm in 2011, after almost two years of government-backed bankruptcy protection that cleared the company of all of its debt.

Bianchi could not be reached for comment.

According to the papers presented to the court and obtained by WWD, the company is weighed down by a total debt of 88.7 million euros, or $120.6 million at current exchange. The debt is made up of 6 million euros, or $8.2 million, owed to employees; 50 million euros, or $68 million, owed to suppliers and licensors, and 32.7 million euros, or $44.5 million, owed to the banks.

According to the papers, Ittierre attributed the lack of growth in 2012 and contracted sales in the first half of 2013 to the “very grave national and international economic crisis that hit, more than others, the fashion industry.” It also said it hoped the new licenses “would have brought better results.” For these reasons, the fall/winter 2013 collections were “produced only in a minimum part and are likely to largely not be produced,” which will affect second-half figures.

In addition, market sources say the Guardia di Finanza, Italy’s tax police, is investigating Ittierre for allegedly selling counterfeit products or goods that were sold without authorization or were remaining inventory.

Sources also say that Bianchi asked the Molise region, where the company is based, for funds, but did not receive them, a fact which impeded further expansion.

One source speculated that the 10,800-square-foot IT’S 30 Manzoni department store, in the frescoed 18th century Palazzo Gallarati Scotti on Milan’s Via Manzoni, inaugurated at the end of last year, is set to shut down. The unit carries ready-to-wear and accessories from the brands produced by Ittierre. The unit also sells innerwear and beachwear for labels including Chloé, Just Cavalli and Vivienne Westwood that are licensed to Albisetti SpA, also owned by Bianchi.

A meeting between Bianchi and Italy’s minister of development is expected to take place on Oct. 10.

Ittierre has been engaged in reviewing its portfolio of licenses and streamlining its structure.

After two seasons, the Karl Lagerfeld Paris license was mutually terminated last month before its five-year expiration date. The C’N’C Costume National license has also not been renewed, following the termination of the Costume National license.

Ittierre has been growing its portfolio of brands with new licenses, including Aquascutum, Tommy Hilfiger Collection and Jean Paul Gaultier’s men’s collection and the designer’s new streetwear line for men and women, Gaultier 2, in addition to Pierre Balmain, Guy Laroche and Galliano.

Bianchi said he was working on renewing the GFF Ferré license. Ittierre also has a production agreement with Thierry Mugler.

Sources say Ittierre did not make the investments required to build the new licenses. It is understood companies that have licenses with Ittierre are scrambling to develop contingency plans.

Another meeting between Bianchi and Italy’s minister of development was held in September. At the time, Bianchi said: “We inherited 700 workers from the previous owner [Tonino Perna], but we cannot have more than 300 employees, in proportion to our revenues, which last year totaled 130 million euros [$171.3 million].”