MILAN — Trading in the shares of Mariella Burani Fashion Group SpA on the Milan Stock Exchange was suspended Monday for “an undetermined period.”
This story first appeared in the September 1, 2009 issue of WWD. Subscribe Today.
A MBFG spokeswoman said the halt was in compliance with Italian law, as the company requested a capital increase on Aug. 8, seeking to raise up to 100 million euros, or $133 million, as part of a debt restructuring program. The group asked creditor banks for a standstill agreement on its debt, which stood at 478.4 million euros, or $636.2 million, at the end of June.
MBFG’s results reported on Monday gave further information on the company’s financial state. The Italian fashion group posted a net loss of 142.1 million euros, or $188.9 million, in the first six months of 2009. This compares with a net profit of 3.9 million euros, or $5.9 million, in the same period last year. The company attributed the loss to an “impairment test,” or devaluation of assets, for a total value of 72.5 million euros, or $96.4 million. Sales fell 24 percent to 246.1 million euros, or $327.3 million, in the first half compared to the same period last year.
Dollar figures are converted at average exchange rates for the periods to which they refer.
In MBFG’s the financial report, audited by Mazars & Guérard SpA, the group said that, hurt by a difficult economy, weak market demand and the stock market instability, it had recruited KPMG and Mediobanca to draw up a financial and industrial plan. MBFG also stated it is in “contact with industrial partners that are interested in developing a business in their own countries with the brands that are part of the MBFG stable, both in leather and apparel,” in order to strengthen the group and continue its expansion internationally.
MBFG produces the Mariella Burani fashion line, holds licenses with Vivienne Westwood for the designer’s Anglomania collection, with John Galliano for jewelry and Aquascutum for footwear, and its holdings include the Mandarina Duck brand, among others. In July, Giambattista Valli signed a five-year licensing agreement with the group for the production and distribution of his namesake line, starting with the fall collection.
Valli dismissed reports of MBFG’s troubled condition and told WWD that MBFG is “very solid” financially and that the production of his clothing line is going smoothly. “I’m not at all worried,” said Valli.
In March, MBFG also inked a deal with La Perla for the production and distribution of its ready-to-wear line.
MBFG stated in the report that its board approved a restructuring of its debt as well as moves to strengthen management, focus on apparel and leather goods by selling its stake in jewelers Calgaro Srl and Rosato Srl earlier this year, and to look for a partner. But the auditors were cautious about the future, expecting “uncertainty about the possibility to turn around the negative trend in the short term.”