MILAN — Generational change has been hitting the Italian fashion industry for several years, and Missoni’s decision to sell a minority stake to a government-backed private equity fund continues that shift while better positioning the brand for global retail expansion and a possible initial public offering down the road.
There had been talk for years about the Missonis taking outside investment. The deal leaves few large family-owned fashion houses remaining in Italy, and no doubt will spark speculation about the future of those firms, which include Etro and Ermenegildo Zegna. The largest, Giorgio Armani, has already established a foundation to control the company.
The outcome of the fund’s investment in Missoni — its first in fashion — could help determine the future of those other firms, as reported Friday. Missoni is selling a 41.2 percent stake to FSI Midmarket Growth Equity Fund for 70 million euros and sees a public listing as “an opportunity,” said Angela Missoni. She will take on the role of president, while maintaining her creative director title.
The Missoni family will continue to have control of the firm with 58.8 percent of the shares. Last year, FSI SGR, or Fondo Strategico Italiano (Italian Strategic Fund), set up the FSI Midmarket Growth Equity Fund with the goal to support leading Made in Italy companies that share growth potential and the need to expand in international markets. The deal sees a capital increase and no financial leverage on Missoni. Former Valentino and Salvatore Ferragamo chief executive officer Michele Norsa, industrial partner of FSI, will become vice president of Missoni.
Several representatives of the Missoni family were present at the Four Seasons Hotel on Friday, the first day of Milan Men’s Fashion Week, to unveil the partnership. Rosita Missoni, Angela’s mother, will retain the title of honorary president and her son Luca, who is focused on the brand’s art projects and archives, will become a board member, as well as Giacomo, the son of the late Vittorio Missoni.
The company was founded in 1953 in Gallarate, Varese, by Rosita and her late husband Ottavio, known as Tai.
“We are very proud of reaching 65 years in business maintaining a company and a brand in the family, including its creative direction,” said Angela Missoni. “Our dream is to be able to leave a healthy company in the hands of the third generation. We are a rough diamond and we all know that our brand name is more important [in terms of size] than our sales. We need to expand and reach new markets and we needed a financial partner. We think this is the ideal partner and that with the help and experience of Michele Norsa, we can do well over the next years. We have an extraordinary brand code that still remains contemporary, we are small but have incredible strength.”
Norsa was a strong link in the tie-up and his track record and long experience working with families will serve him well in this deal. “We walked together many times,” he said, citing for example the work done on the Missoni licenses starting 21 years ago with Marzotto, where he held several executive roles, and his friendship with the family — including trips with Tai and Rosita Missoni.
“For me, it would be a dream to list three companies in a little more than 15 years,” admitted Norsa, who spearheaded the listings of Valentino and Salvatore Ferragamo. “I refused other opportunities [to invest] because I didn’t know the product, the managers and so on, but here I know the company, the shareholders and the potential. But it’s always like climbing an 8,000-meter mountain — you need to get used to every level, gradually set up a governance, communicate well. It takes years, depending on the company.”
Maurizio Tamagnini, ceo of FSI, said the acquisition “embodies the mission of the fund.” He also emphasized the continuity the Missoni family guarantees and their long-term commitment without cashing in on the deal. “The funds will be invested entirely in the company for growth, capitalizing on the strength of the brand,” he said.
Last year, Angela Missoni celebrated her 20th anniversary since taking her first bow on the catwalk for the family-owned brand. Rosita is in charge of the brand’s home collection. The designer and her close-knit family were struck by tragedy in 2013, when the airplane Vittorio Missoni, the business-minded sibling, was traveling on from Los Roques to Caracas, Venezuela, went missing in January that year. In May that year, their father died at 92. The Missonis tapped general manager Emilio Carbonera Giani three years ago and he will remain in his role and join the board. Norsa has worked with Carbonera Giani in the past at Marzotto, Valentino and Salvatore Ferragamo.
The latest figures for Missoni reported consolidated sales in 2016 of 63.4 million euros. Of that, licenses represented 10.9 million euros. The company has five boutiques in Italy and six outside the country, as well as two outlets in Italy. Exports accounted for 74 percent of sales. Norsa said 2017 consolidated figures were not available yet, but he pegged total sales, including M Missoni, which was previously produced and distributed by Valentino Fashion Group and was internalized this year, at 150 million euros.
The five-year plan “is extremely simple and logical — there will be an organic growth, not huge, optimizing the stores and deliveries, but our growth will have two drivers. One is geographic, with China being the most important driver,” said Norsa, adding that he was “surprised” by the reach of Missoni’s online sales. “Considering 100 products sold worldwide, more than 10 percent are sold online. In luxury fashion and ready-to-wear this is very significant,” he contended.
The house will also work on expanding its retail network. Although it relies on a number of high-profile stores in both resort towns such as Capri and Portofino and in cities including New York, London, Milan, Venice and Florence, among others, distribution was skewed toward wholesale, noted Norsa. The stores will be reinforced with measured openings in all main markets, he said, citing South America and Asia.
“There will be a change in company culture, from wholesale to luxury retailer.”
Tamagnini said that sales in Asia and in the U.S. total less than 10 million euros in each region. “This gives the sense of the opportunities.”
Remarking on the fact that the presentation was held ahead of Men’s Fashion Week, Norsa said that men’s wear “is one of the most extraordinary opportunities for Missoni.”
Norsa also emphasized the “iconic” status of the brand, with its staple patterns, from the “flame to the zig zags” much copied around the world. The executive touted the “very concrete plan and solid ambitions. All is built with work and harmony.” The plan is to also expand the headcount at the company.
Angela Missoni proudly touted the company’s full manufacturing pipeline. “The signature line is entirely made in Italy,” she said.
On the sidelines of the conference, Carlo Capasa, head of Italy’s Camera della Moda, said “today size counts for a global brand, you can’t face international markets and distribution without the right size. It takes courage to open up one’s capital, understanding when it’s necessary. You need financial solidity and size, this is positive and it can bring advantage to the Made in Italy label.”
Rothschild acted as financial adviser on the deal. The industrial adviser was Carnelutti Studio and legal advisers were Legale Associato and Studio Legale BonelliErede.