BURANI IPO WILL KICK OFF EXPANSION, ACQUISITIONS

Byline: Luisa Zargani

MILAN — Mariella Burani Fashion Group announced Friday it will go public by floating 10 million ordinary shares, representing 35.7 percent of its capital, on the Milan bourse. The offering has been set for July 13 and 14. The shares will be priced between $6.75 and $8.50. (All dollar figures are converted from Italian lire at current exchange rates.)
The Burani family, which currently owns 100 percent of the company, will remain majority shareholder, with 64 percent of the capital.
“We have decided to go public to acquire financial support to develop both our owned and licensed labels, and our distribution network,” said Walter Burani, president of the Group and founder of the company, at a press conference Friday to announce the public offering. “In addition, we plan to grow on the international market,” said Giovanni Burani, son of Walter and chief executive officer together with his brother Andrea.
In a separate development, WWD sources indicate that the new managing director of Mila Schon will be Fabrizio Jorio Fili, brother of Roberto Jorio Fili who is the president of Valentino and managing director of GFT Net. Walter Burani declined to comment on the rumor. Mila Schon was purchased by Burani last October.
Fabrizio Jorio Fili was previously a consultant for Carlo Pambianco, a luxury goods analyst here. As reported, Andrea Pinto left as managing director at Mila Schon at the end of last month.
The purchase of Mila Schon from Itochu Corporation last year was part of Mariella Burani’s recent expansion and growth strategy. Over the last three years, sales of the Group grew from $52 million in 1997 to an estimated $150 million for 2000.
Founded in Reggio Emilia in 1959 as Selene, a children’s wear producer, the company moved to women’s apparel in the second half of the Seventies. It changed its name to Mariella Burani Fashion Group in September 1999.
The Group now produces and distributes five collections under the Mariella Burani name: the signature line Mariella Burani, Mariella Burani per Amuleti, Mariella de Mariella Burani, Selene and the plus-size line Pi¥ Donna di Mariella Burani. The Mariella Burani line accounted last year for 55 percent of the group’s total sales, which were $105 million.
The Group also has several licensing agreements. It produces and distributes Calvin Klein Collection and four collections for Italian designer Gai Mattiolo — Gai Mattiolo Couture, Gai Mattiolo Pret-a-porter, Schockingai by Mattiolo, and Gai Mattiolo Fashion Jeans — and Carisma Made in Valentino. “We are proud that our licensing contracts all last an average of 10 years, longer than usual in the fashion business, which is generally five years,” said Walter Burani, pointing out that the licenses are not directly competitive with each other.
In December last year, the Group acquired 60 percent of Dimensione Moda SRL, a knitwear company, and majority shares of Sedoc SRL, a software and Internet provider here, setting up fashionweb.net, an information and entertainment Web site on fashion.
“I don’t believe in selling clothes online now,” said Walter Burani. “We are thinking, however, of selling our perfumes [which are licensed out for Mariella Burani and Mila Schon] and accessories within the next two years.”
In April 2000, Burani took control of Gabriella Frattini SpA, a knitwear company and its three knitwear lines, Gabriella Frattini, Setball and Project.
Walter Burani said the money raised through the public offering will be used for further acquisitions to consolidate its women’s apparel businesses. He would not say if he had any specific companies in mind. “We are not ruling out purchases in the accessories or retailing markets,” said Burani.
Burani said control of distribution is a top priority as well, through the opening of new stores. “Fifty percent of the money raised through the listing will be invested in retailing,” said Burani. The Group currently has 21 directly owned brand stores, and 54 franchised stores. This year, the Group has opened four stores in Italy, and franchised stores in Tokyo and Kuala Lumpur, Malaysia. In September, the company will open a Mariella Burani and a Mila Schon boutique in Moscow. Exports account today for 40 percent of sales.
“We are focused on increasing our business in the U.S., which accounted for 4 percent of sales in 1999,” said Giovanni Burani, noting that the Calvin Klein business will be pivotal in this strategy, accounting for around $20 million, or 12 percent, of sales this year. Burani said the company founded Selene US in 1994 to operate in the American market. Burani also said the Group invests six percent of sales in advertising and communication.
Banca Commerciale Italiana and BNP Paribas are the global coordinators and MIT.FIN SpA is the advisor for the IPO. Burani said the company was valued between $135 million and $170 million before the offering.

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