Stefanel Dubai

Italian contemporary fashion company Stefanel is in troubled waters.

On Wednesday, the firm’s board approved the decision to file a petition for a composition with creditors.

Stefanel SpA closed the first half of the year with revenues down 12.6 percent to 67.4 million euros, or $74.6 million at current exchange rate, compared to 2015. In particular, it is weighed down by a debt of 82.9 million euros, or $92 million at average exchange rate, as of the end of 2015. The petition is part of the company’s initiatives aimed at restructuring its debt and consolidating its patrimony. After a peak in the Eighties and Nineties, Stefanel’s business was dented by the competition with fast-fashion brands and a lackluster economy.

Finpiave SpA, controlled by the Stefanel family, holds 20.32 percent of the Stefanel fashion company and is also filing a petition for a composition with creditors.

A government commissioner, who will verify the accuracy of procedures, will be named soon.

Following the announcement, shares of Stefanel, which is listed on the Milan Stock Exchange, collapsed on Wednesday closing down 39.7 percent. By Thursday afternoon, shares were up 9.43 percent and valued at 0.11 euros, or $0.12, per stake.

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