MILAN — After weeks of speculation, the name of the new owner of Roberto Cavalli SpA has been revealed: It is Vision Investment Co. LLC, controlled by Hussain Sajwani, the founder and chairman of the Damac Properties Group.
Vision Investment has signed a binding contract with the Florence-based fashion company and its shareholder Varenne 3 to acquire 100 percent of the firm. This confirms a WWD report on June 28 that the judge expected to rule on the sale had approved the offer made by Damac.
Damac Properties was ranked number one on the Forbes 2017 Global 2,000 list of the fastest-growing global companies based on the compound annual growth rate of revenues from 2013 to 2016, according to Wikipedia. In the Forbes 2018 rankings, Sajwani was the world’s fourth richest Arab with a net worth of $4.1 billion.
The binding agreement is in compliance with Cavalli’s so-called process of “composition with creditors” with the Court of Milan and it allows the business to continue while it holds discussions with creditors and implements a debt restructuring plan. Financial details and the amount of the debt were not disclosed, although sources peg the transaction at around 160 million euros.
Market sources believe the agreement includes a capital increase of around 65 million euros and the payment of all creditors.
The sale is complicated by the fact that there are a number of steps that must be approved by the Milan Court. The buyer has presented an industrial plan, which is being evaluated and which needs to be approved by a judge. The Cavalli company has to define an agreement with its creditors and submit it to the judge by Aug. 3, with a ruling expected in mid-September. Only then will the transfer of shares to the new owner be completed.
At the same time, the unions are asking for clarity.
“For the time being, the buyer has not mapped out its industrial plan to the unions,” Luca Barbetti, from the Filctem and Cgil Unions, told WWD on Tuesday. “The [Damac] offer was financially the most consistent and sustainable — the one out of the four presented that would help the relaunch of the company and it was accepted by both the court and the shareholders.”
Barbetti said the unions want to understand the impact of the deal on the Cavalli workforce, following a regional meeting held on Monday during which there was no mention of an employment plan at the Sesto Fiorentino headquarters. “The Aug. 3 deadline is looming, and it also marks the end of the solidarity contract, and we have no concrete and clear elements for the future. We are asking for guarantees that the brand will continue to be headquartered and produced in Sesto Fiorentino,” he said.
That said, Barbetti conceded that Damac does not have other production sites, “which gives us hope for the Sesto plant.”
Cavalli’s union representatives on Tuesday lamented the “management’s reticence and the lack of participation” of the commissioner charged with overseeing the sale of the company, who did not attend the Monday meeting. For this reason, the unions have requested “a meeting with the Court of Milan to be compulsorily held by July 24,” demanding the commissioner or a substitute to illustrate the plans to relaunch the company to the employees.
At the end of March, the Roberto Cavalli SpA board revealed that it had decided to file a restructuring plan with the Court of Milan. In the filing, Roberto Cavalli SpA requested 120 days to prepare the restructuring plan and to allow the company to continue to evaluate potential new expressions of interest to buy the brand. That was followed by Cavalli’s American subsidiary Art Fashion Corp. filing for Chapter 7, ceasing all operations. Creative director Paul Surridge exited the fashion house in March. The brand, which is helmed by chief executive officer Gian Giacomo Ferraris, did not officially present a spring men’s wear collection in June at Pitti Uomo or in Milan.
A property developer, Damac is based in Dubai and given its relationship with Ferraris, sources believe he is expected to stay on after the deal has been signed. Sources say he has been actively involved in working to maintain production in Italy.
As reported, sources believed Damac was the investor most likely to buy the Cavalli brand.
Damac was especially interested in Cavalli because its strategic investment arm Dico International is working on a five-star hotel tower in Dubai that is expected to comprise 220 rooms and to be completed in 2023. When the deal was revealed, Ferraris said this was the first of at least five hotels, called Aykon, to open in 10 years and to be decorated by Cavalli. Damac, which is one of the top 10 companies publicly listed on the Dubai Financial Market with a market capitalization of $4 billion, is funding the project with an investment of $500 million. Damac is also building Just Cavalli villas in Dubai.
Italian private equity fund Clessidra Sgr took control of Cavalli in 2015 through its Varenne vehicle, which at the time included L-GAM and Chow Tai Fook Enterprises Ltd., but has been looking to exit the fashion business, according to sources. In May 2016, Italmobiliare SpA, the publicly listed investment group owned by the Pesenti family, took control of Clessidra for roughly 20 million euros. Italmobiliare holds and manages a diversified portfolio of investments and equity interests worth more than 2 billion euros.
As reported, Cavalli received a total of five offers. Three of them were binding for 100 percent of the company. Another binding offer was made to purchase unspecified company assets, while a fifth party submitted a nonbinding expression of interest.
OTB and Bluestar Alliance were also said to have submitted offers. The investment would also have made sense for OTB, as the group’s manufacturing arm Staff International is Just Cavalli’s licensee. Renzo Rosso’s OTB is the parent of brands such as Diesel, Marni and Maison Margiela.
Bluestar Alliance has investments in Tahari, Bebe and Catherine Malandrino.
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