GIANFRANCO FERRE JOINS RANKS OF DESIGNERS WITH ITCH FOR AN IPO
Byline: Sara Gay Forden / Samantha Conti
MILAN — It appears that going public among designer companies is becoming more fashionable than fashion itself: The latest to reveal plans for a stock market listing is Gianfranco Ferre.
According to Ferre’s managing director and business partner, Gianfranco Mattioli, the company is preparing for a Wall Street listing in 1999 with the help of U.S. investment bank Morgan Stanley.
The initial plans include a reorganization to streamline the 21 companies of the Ferre group into four or five, probably under the control of Gianfranco Ferre SpA. By the end of the year, Dei Mattioli, the Bologna-based manufacturing company owned by Mattioli, will be acquired by the house of Ferre. Dei Mattioli produces a good part of the designer’s collections.
Mattioli disclosed the intentions to go public in an interview printed Sunday in the Milan daily newspaper Corriere della Sera, and the information in the article was confirmed by a Ferre spokesman.
This year, according to Mattioli, Ferre will report an estimated total volume of $722 million (1.25 trillion lire), including licensed products and retail sales in Ferre stores, and $11.5 million (20 billion lire) in net profit, with direct sales of $58 million (100 billion lire).
Ferre’s move to go public follows news that the house of Gianni Versace and Ittiere, the designer name sportswear manufacturer, are going ahead with plans for stock market listings. Giorgio Armani recently announced a group restructuring that could pave the way for an eventual listing, although Armani executives have consistently said the firm has no interest in going public. Trussardi is also in the process of a financial reorganization in what may be a first step toward listing its stock.
Valentino also had thought about going public before it signed a letter of intent last week to sell its business to HPI, the industrial holding company that controls designer apparel giant GFT SpA and sportswear maker Fila SpA. GFT and Valentino have a long-term relationship, GFT producing men’s and women’s collections for the designer.
A significant group of U.S. designer and fashion companies have gone to listings on Wall Street in 1 1/2 years, including Donna Karan International, Guess and Polo Ralph Lauren.
In beefing up its structure for a public offering, Ferre also is negotiating to acquire control of two of its licensees, leather goods manufacturer Dei Mutti of Parma and lingerie producer Socotex of Brescia.
Ferre is also consolidating its licensing empire in Japan and recently signed an agreement with the Japanese trading giant Mitzuno to open 14 Ferre boutiques there and to develop and distribute a complete Ferre golf line, including clubs, shoes and bags.
Ferre also is in talks with Swatch to produce a line of watches.
At the same time, the designer company will continue to work closely with its main apparel licensees: Marzotto, which produces some $86 million (150 billion lire) in annual sales with the Gianfranco Ferre Studio and Gieffeffe lines, and Ittierre, which manufactures Gianfranco Ferre Jeans.
Finally, Ferre is planning to open a new headquarters here on Via Pontaccio, in the city’s Brera district, where it is renovating an entire building. By the end of the year, it also plans a new store in Via Sant’Andrea, which will span three floors. The current Ferre boutique is on Via della Spiga. It couldn’t be determined whether that location will continue.
As reported, the company has beefed up its presence in the U.S. In June, it created a new division to oversee U.S. business and hired Corinne Coombe to become president of Gianfranco Ferre USA. Until this point, Ferre’s U.S. business had been run by the Milan headquarters.