MILAN — Roberto Cavalli may think otherwise, but the administrators for Ittierre SpA are set on reviving the company’s fortunes.
This story first appeared in the March 31, 2009 issue of WWD. Subscribe Today.
In a letter to partners dated March 4 and obtained by WWD, Ittierre’s administrators wrote they were putting in place “any measure” and undertaking “any initiative” necessary and convenient to reestablish the usual flow of activity.
“Our immediate goal for Ittierre is ‘back to business,’” they wrote. “Ittierre’s leadership in the young lines segment, its unique know-how and operating infrastructure remain intact.”
Italy’s Minister of Economic Development appointed Andrea Ciccoli, Roberto Spada and Stanislao Chimenti as administrators for Ittierre in early February, after the company filed for bankruptcy protection under the Italian equivalent of Chapter 11, known as the “Legge Marzano.”
Cavalli, whose Just Cavalli label is Ittierre’s biggest license, generating annual revenues in 2007 of around 240 million euros, or $329 million, blamed Ittierre for having to cancel the line’s runway show last month, citing delays, substandard production and the nonpayment of 20 million euros, or $25.3 million in royalties.
Dollar figures are converted at average exchange rates for the period.
At the time, Cavalli also said he doubted the administrators’ abilities to turn the company around and that he was looking at alternative licensees. The contract expires in 2010. The designer could now face legal action.
In the letter to partners, the administrators underscored they had secured a 30 million euro, or $37.9 million, line of credit from five Italian banks, allowing Ittierre to get back on track, while all outstanding debts had been frozen.
“Fashion shows have been held as scheduled, SS’09 goods are being recovered from suppliers and shipped to customers — [Mar. 3] alone around 30,000 units — and sales campaigns are progressing according to calendars,” the letter continued. “We aim to restore the company’s historical service levels in all areas for FW’09 deliveries.”
The administrators have six months to present a restructuring plan.