MILAN — Formalwear has been featured front and center on the runway in recent seasons, but the effects of the COVID-19 pandemic are still very real, and the category continues to be impacted by halted business travels and a new work-from-home routine.
Despite this — and in a sign of confidence from its majority shareholder — luxury men’s wear brand Caruso announced on Thursday it has signed an agreement with its owner Fosun Fashion Group and financial creditors, namely banks. This leads to the Chinese conglomerate buying back the company’s financial debts at a discounted price. At the same time the group is injecting liquidity into Caruso through a capital increase.
Although financial terms of the deals were not disclosed, the company said as a result of the agreement, it holds no financial liabilities toward the banks and is allowed to stand by its new seven-year business plan set in motion last year.
Speaking to WWD, Marco Angeloni, president and chief executive officer of Caruso, touted FFG’s “forward-looking approach and decision to stand by the company’s management and value its assets.”
“The company is an invaluable asset, as it is specialized especially in the manufacturing of luxury coats that are among the most difficult items to produce with our quality,” he said. “After a yearlong negotiation, shareholders acknowledged the value of this deal which I proposed.”
The development reflects FFG’s commitment to build its luxury portfolio of brands, which include French house Lanvin, Austrian hosiery specialist Wolford, American fashion brand St. John and the recently acquired Sergio Rossi footwear label.
Praising the company’s manufacturing know-how, FFG’s president Joann Cheng said the group “firmly believes that this agreement will help Caruso withstand the impact of the epidemic, and at the same time, with the collaboration of FFG’s portfolio of resources, further accelerate its global development.”
Through the capital increase, the company plans to support its business plan covering the 2020-27 period. Angeloni described it as “prudential” but in sync with trends that have been fostered by the pandemic, including customers’ desire for nonchalant elegance, which is core to the brand’s aesthetic.
“We are coming out of 18 months of unprecedented crisis for the sector, not just financially healthy and with an evolved business [plan] but also stronger as a team that was able to pursue clear and coherent goals despite all the noises and uncertainties of these times,” the CEO added, noting that the company employs around 400 people.
In 2020 Caruso’s total revenues stood south of 30 million euros, down from 42 million euros in 2019.
As part of the plan, Caruso signed new distribution agreements across geographies that have secured the brand a presence at high-end boutiques and department stores. While it opened a showroom in Manhattan in 2019, the brand is now relying on a local distributor. Caruso has also recently forged ties with local partners in Northern Europe, the Middle East and Japan.
Despite having embraced a new distribution agenda that heavily relies on wholesale accounts, the company will open a shop-in-shop at London’s Harrods in the first week of August and plans to unveil a stand-alone flagship in Shanghai by October. Angeloni also mentioned that a small-scale unit in Milan is in the pipeline, but shied away from providing further details as it is not part of the business plan.
In order to enhance its international visibility, Caruso returned after an almost two-decade absence at the most recent edition of men’s trade show Pitti Uomo, presenting a spring 2022 collection designed by creative director Aldo Maria Camillo that embraced effortless sophistication, revisiting classic formalwear through a modern, quite experimental twist. It was also present on the Pitti Connect digital platform in January.
In addition to its proprietary brand, the company is also committed to further strengthening its Fabbrica Sartoriale division dedicated to third-party manufacturing for luxury brands. During the pandemic-scuppered 2020, Caruso managed to expand the size and scope of the division branching out into the women’s wear category.
The division accounts for the largest portion of the company’s sales and Angeloni said it remained “hyper lively even during the pandemic,” allowing the company to acquire new clients.