MILAN — Like the proverbial phoenix, Ballantyne is rising from its ashes.

This story first appeared in the March 6, 2014 issue of WWD. Subscribe Today.

After owner Charme Investments Ltd. set in motion a number of radical measures, including a voluntary liquidation of the original Ballantyne company it had acquired in 2004, the storied cashmere brand is starting with a clean slate. According to a source close to Ballantyne, unhappy with management and a dismal financial performance, Charme in the fall protected the brand, legally called Ballantyne Cashmere SpA, by moving its assets into a new company, naming it Alpha Srl.

“It’s simply the first letter of the alphabet,” said the source, who spoke on condition of anonymity. “Charme did not want to liquidate the Ballantyne brand, just the company. This is also functional to a future potential sale of the brand, although there are no discussions taking place at the moment. Also, a voluntary liquidation is a market-friendly operation to create the best conditions for a sale, as Charme did not want to go through a courthouse to save the brand.”

Charme also closed Ballantyne’s two boutiques, located in Milan’s Via Sant’Andrea and the luxury ski resort Cortina d’Ampezzo, and the fund is paying off its creditors and suppliers, according to the source.

Heavily exposed to wholesale and dented by Italy’s economic crisis, Ballantyne posted a loss of 7.7 million euros, or $9.8 million at average exchange, in 2012. “Charme was not necessarily displeased with Yossi Cohen or Roberto Menichetti, but the fund believed there had been too much discontinuity and that the designers emerged to the detriment of the brand,” said the source, referring to two of Ballantyne’s most recent creative directors.

Accordingly, Charme has selected a new designer in charge of shaping the brand’s new course, but is keeping mum on details.

The new company that owns Ballantyne is called Corso Italia, from the street where the firm’s showroom is located in Milan, and was set up by Charme at the beginning of this year. While the fall collection was not presented during Milan Fashion Week last month, it is now being sold out of the showroom. The source also said production is increasingly shifting toward Italy, as the brand is being manufactured by artisanal factories in the country, rather than in Scotland, where it was founded.

Charme Investments — which was set up by Ferrari president Luca di Montezemolo, his son Matteo di Montezemolo and partner Tommaso Beolchini — has a 51 percent stake in Ballantyne and takes a long-term approach to its investments. After 10 years, last month the fund sold its stake in Italy’s high-end furnishing company Poltrona Frau SpA to Haworth Inc.

Ballantyne, known for its staple argyle cashmere sweaters, was founded in 1921 in Innerleithen, Scotland, and became popular with celebrities from Audrey Hepburn, Jackie Kennedy and Grace Kelly to Nicole Kidman and Julia Roberts. In 2002, the late entrepreneur Alfredo Canessa, who had created the Malo brand and also owned the Gentry Portofino label, bought Ballantyne with designer Massimo Alba from Britain’s Dawson International plc, revamping its image and expanding its product offer. In 2004, Charme took control of the brand, maintaining Canessa as its chairman. Under his watch, the brand grew to count almost 500 points of sale around the world, and stores in London, Tokyo, Portofino and Florence, in addition to the Milan and Cortina units. In 2007, sales reached almost $40 million, doubling since the Charme acquisition.

In 2008, Ballantyne tapped its first creative director, Dawidh di Firmo, previously senior designer at Prada for women’s wear, and in 2009, the year Canessa died, the brand tied up with Philippe Starck and knitwear designer Louise Goldin for exclusive collections. In 2010, Alfredo Argirò succeeded di Firmo, followed in 2011 by Cohen. Menichetti, known for his work at Burberry, Guy Laroche, Jil Sander and Céline, took over in 2013, but left after a few seasons. Last year, the company also launched a capsule knitwear collection with Matthew Williamson.

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