MILAN — The first steps to restart Roberto Cavalli SpA were revealed on Tuesday as the company said it had reached an agreement with the unions at the Ministry of Labour and Social Policy. A total of 50 employees will be laid off in Florence, compared with the 77 that were expected. Out of the 50, 15 will be “voluntary” exits and 25 are connected to the closure of the printing plant.
The fashion group’s chief executive officer Gian Giacomo Ferraris said he was “very pleased” with the agreement, which is “preparatory to the relaunch of the company,” expressing his focus on this goal. “I am in particular satisfied with the sense of responsibility that the different parts have demonstrated and which makes us hope for the future. As I declared at the moment of the reorganization, I am convinced that Cavalli has in itself what is necessary to restart. With the contribution of shareholders, employees and management, as well as of all external stakeholders, we hope to quickly reach our objectives.”
Bernardo Marasco of the Filctem Cgil union in Florence said: “We have obtained a significant reduction of redundancies and a voluntary exit incentive higher than the mobility — from a minimum of 13 to a maximum of 17 months based on seniority and family obligations. We will fight so that the sacrifices of the workers will be followed by the relaunch of the company.”
Marasco also asked the company “for an effort in the near future” to work with factories, printers and others “localized in the territory as much as possible” and to “allow the biggest possible number of reemployment among the Cavalli layoffs.”
In October, the company revealed plans for a drastic reorganization that it said would result in the cutting of almost 30 percent of its workforce. At the time, following a meeting with the unions, the firm said it would eliminate about 200 positions out of a total global headcount of 672.
That same day, the fashion firm revealed the exit of creative director Peter Dundas.
The reorganization aims to return the company to operating profitability in 2018. With the goal to streamline its company structure, Cavalli said it planned to close its Milan corporate and design offices and transfer all functions to Osmannoro, Florence. Production and logistics were to be rationalized and a number of stores to be closed or relocated.
Ferraris said at the time that he expected sales in 2016 to be between 155 million and 160 million euros, or $172 million and $177 million. The executive underscored that the company had no debt.
The pipeline at the manufacturing plant in Osmannoro ranges from stocking fabrics to design and the development of prototypes, samples and products.
In the 12 months ended Dec. 31, the company’s net profit totaled 32.7 million euros, or $36.3 million. This compared with a loss of 9.7 million euros, or $13 million, in 2014. The sale of the building housing the brand’s flagship in Paris’ Rue Saint-Honoré helped lift profits, as well as its net financial position. Cavalli is renting the space where the store continues to stand.
In 2015, revenues were down 14.2 percent to 179.7 million euros, or $199.4 million, compared with 2014. The company attributed the drop mainly to a decrease in orders predating Clessidra’s acquisition of the firm at the end of April 2015 and to the challenges in luxury markets, especially Russia, where the Cavalli brand has been historically strong, as well as a contraction in sales derived from licenses. Dollar figures were converted from the euro at average exchange rates for the periods in question.
Founder Roberto Cavalli sold 90 percent of his namesake company to Italian private equity firm Clessidra in a deal that market sources estimated to be pegged at between 380 million euros and 400 million euros, or $423.5 million and $445.8 million at current exchange.
In addition to the signature brand, the group includes the young casual Just Cavalli, the bridge line Cavalli Class, the Roberto Cavalli junior line and a home collection and a hospitality sector through its network of Cavalli Clubs and Cavalli Cafés, in cities ranging from Miami to Dubai.
Cavalli’s network of stores last year totaled 182.