Borsalino "Siur Pipen" hat and hatbox.

MILAN — Borsalino’s operations continue despite the bankruptcy declared last Monday.

The court of Alessandria, where the hatmaker is based, rejected the petition for a composition with creditors presented in September by Haeres Equita, the private equity, which in 2016 took over control of the luxury firm.

“Early in 2015, Borsalino was on the verge of bankruptcy because its former owner had embezzled all the funds inside the company. The company was actually working, generating revenues and making very small profits, but it had a ton of debt because the former owner [Mario Marenco] never paid the taxes, never paid the suppliers and embezzled all the company’s funds” said Haeres Equita founder Philippe Camperio, during an interview at the Borsalino Milanese headquarters. “The board of directors launched a beauty contest to find a new investor who would take over the company and refund the company in order to be able to pay all the creditors.”

Camperio explained that, at that time, the company received 27 expressions of interest coming from a range of conglomerates and funds, including LVMH Moët Hennessy Louis Vuitton SE, Carlyle and Neo Capital.

“All the big boys walked out pretty fast because they said ‘too small, too complex.’ Seven offers were issued, three were retained and we won,” Camperio explained. “And we won because, as claimed by the board of directors, we were the only group which presented three skills they were looking for: one of them was private equity competence, two was an entrepreneurial attitude because we are hands on in the activities and we take over management, and three is fashion experience.”

In December 2015, Haeres Equita filed an offer and, along with presenting a business plan, it also deposited 15.5 million euros to start covering Borsalino’s debts. This allowed Haeres Equita to take over the firm’s management and operations by renting the company in 2016.

“Since then, we’ve increased revenues by 20 percent, doubled the EBITDA [earnings before interest, taxes, depreciation and amortization], we restructured all the loss-making units, we hired a lot of people, we assembled the commercial team, the merchandising team, we put an advisory board, we restructured non-performing distributors, so basically we’ve done a lot of work,” said Camperio, adding that the composition plan presented by Haeres Equita was admitted in spring 2016, but then rejected in December 2016.

“Anyway we kept our cool and Borsalino refiled a composition plan in September of this year, which we fully guaranteed once again,” Camperio said. “And it was rejected and it’s being rejected not through lack of funding — because the funding is here — or through lack of a business plan execution but because the court was privileging an auction and because we bought some of the assets of Borsalino, which did not belong to Borsalino but belonged to third parties, they believe that we have somehow biased the auction process.”

In particular, Camperio refers to the fact that, last July, he bought the right to use the Borsalino brand from bank Mediocredito for a sum of 18 million euros.

“The court of Alessandria is basically saying that Camperio bought the right to use the brand from Mediocredito to bypass the auction,” said Elio Bricola, representative of Alessandria’s UIL trade union. “What we can say is that since Camperio took over the management of the company, he kept his promises and he worked hard to relaunch the brand and even if Borsalino’s performances are still not brilliant, for obvious reasons, great opportunities seem to emerge.”

“We will definitely appeal,” said Camperio, who despite all the difficulties admitted to still believe in the project and to be focused on fighting for Borsalino, which is closing 2017 with revenues of 17.5 million euros, in line with the previous year.

“The revenues are flat compared to 2016 because this year we focused on reorganizing the distribution,” said Camperio, explaining that the company stopped working with non-relevant accounts and, at the same time, left nonperforming markets.

While the opening of a store in New York’s SoHo district was put on hold due to the aforementioned legal issues, Camperio said Haeres Equita during the course of the year invested a lot to buy new machineries and elevate the product quality.

This strategy actually allowed the brand to make a comeback into North American department stores, including Barneys and Bergdorf Goodman.

“The U.S. are a huge market and also serves as an opinion leader for Asia,” said Camperio, who expects in five years to have international markets accounting for 60 percent of Borsalino’s total business. Italy represents 50 percent of the brand’s revenues.

“We are also reorganizing the collections to have carryover and seasonal products accounting for 40 percent respectively of our offering, while 10 percent will consist of capsules,” said Camperio, who put the focus on preserving the heritage of the brand while making the products more appealing for younger generations.

In 2018, Borsalino will unveil its new online platform aimed at increasing the exposure of the labels on the international markets.

Stefano Ambrosini, one of the two administrators selected by Alessandria’s court in the Borsalino insolvency, was not reachable for comments.

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