MILAN — For the third time, auditors at KPMG have failed to certify heavily indebted Fin.part’s accounts.
Repeating a phrase that has become standard language for KPMG when referring to the beleaguered parent of Cerruti and Frette, a KPMG spokesman said that the firm “was unable to express a judgment” on Fin.part’s 2003 numbers.
The spokesman said that KPMG was particularly concerned about Fin.part’s ability to repay the 200 million euros, or $239.4 million, worth of Cerruti bonds due this July. He was unable to provide further information, referring instead to a Fin.part-issued press release summarizing KPMG’s decision.
In April of last year, KPMG declined to certify Fin.part 2002 numbers. It did the same thing last November with Fin.part’s first-half 2003 accounts.
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In its defense, Fin.part said in its press release that KPMG had noted some positive progress at the company, namely investors willing to recapitalize the company and ongoing negotiations for asset sales.
As reported late last year, Gianni Mazzola, head of the Italian beauty company Schiapparelli and his Swiss banker, Carlo Pagani, bought a large portion of Fin.part founder Gianluigi Facchini’s stake in the company. Together, Mazzola and Pagani are Fin.part’s largest shareholders, holding 23.7 percent.
Mazzola, now Fin.part’s chairman, has yet to present a business plan and outline what assets are for sale. A Fin.part spokesman on Thursday declined further comment on Fin.part’s plans.
Fin.part more than doubled its loss in 2003 to $171.2 million, or 143 million euros, from $78.2 million, or 65.3 million euros, the year before. Sales tumbled 11.8 percent to $483.9 million, or 404.3 million euros. The company managed to chip away at its debt pile, reducing it 11.7 percent to $425.3 million, or 355.3 million euros, from $481.6 million, or 402.4 million euros, at the end of 2002.
Founded in 1996 by Facchini, Fin.part embarked on a feverish label-buying craze just as the luxury goods and fashion markets peaked in the early part of the millennium. The company even managed to rack up debts that at times eclipsed the group’s yearly revenue.
Fin.part’s acquisitions binge culminated when it snapped up Cerruti through two transactions in 2000 and 2001. Fin.part paid a total of $137 million for Cerruti, a company that posted consolidated sales of $66 million in 1999.
Cerruti — along with such acquisitions as home linen house Frette; sportswear brands Henry Cottons, Moncler and Marina Yachting, and footwear firm Andrea Pfister — rounded out Fin.part’s portfolio, but also brought on substantial debt. Fin.part has since sold some small assets, such as the Moncler and Maska brands, as well as the Boggi retail chain and footwear label Andrea Pfister.