MILAN — Department store operator Borletti Group is emerging as a potential bidder in the sale of Italy’s giant retailer Gruppo Coin SpA.
“Coin is certainly a sector we are interested in,” said Maurizio Borletti, chairman of the group, which owns Italian department store chain La Rinascente and Paris department store Printemps. Borletti recently eyed investments in Escada, Christian Lacroix and Italian clothing manufacturer Ittierre, which produces the Just Cavalli, C’N’C Costume National, Galliano and Ermanno Scervino collections, and which was eventually sold to Albisetti SpA.
“Through the fusion of Upim, we are also indirectly already shareholders of Gruppo Coin,” Borletti noted. “Thus, there are the bases for our interest even though we have not made a definitive decision in that sense. We are actually studying other opportunities and we must decide which to pursue.”
Last December, Coin, which also owns fast-fashion retailer OVS Industry, took control of Italy’s Upim clothing chain. Through a capital increase, Venice-based Coin gave a 7.5 percent stake in the new group to Upim investors, which include the Borletti family, equity fund Investitori Associati, Deutsche Bank Real Estate Opportunities Group and real estate group Pirelli RE.
Coin has been converting a number of Upim’s 135 stores, more than 2.2 million square feet of selling space, most often centrally located in top Italian cities, into Coin and OVS Industry units, and upgrading image and product assortment. In July, designer Carlo Capasa signed a licensing agreement with OVS Industry for the production and distribution of a new line called Eequal to bow for spring 2011.
Private equity funds The Carlyle Group and Clessidra SGR SpA also both expressed interest in midmarket department store chain Coin last month.
A source close to Carlyle reiterated on Wednesday that the fund has always considered Coin “an opportunity and an asset and that, if the chance arises, it will start looking at the group’s documents with great interest.”
Coin’s controlling shareholder, Financière Tintoretto SA, which is in turn held by Paris-based PAI Partners and Fincoin, has said it is seeking “strategic alternatives to secure the best value of its stake in Gruppo Coin.” A sale is expected in the first quarter of 2011, according to sources. Fincoin regroups some members of the founding Coin family with minority stakes. According to Italy’s stock market watchdog Consob, PAI Partners holds 69.3 percent of Coin, which is listed on the Milan Bourse.
According to sources, Coin, whose expansion has been spearheaded by chief executive officer Stefano Beraldo, could be valued at 1.5 billion euros, or $2 billion at current exchange. Coin is the country’s largest clothing retailer, with plans to reach a total of 900 stores in the next three years.
In line with the transparency expected by the sale procedure, on Wednesday, the board of Coin said that, in light of the results of the third quarter and the first days of November, it expected net revenues to grow 37 percent in the fiscal year from Feb. 1 to Jan. 31, 2011, compared with the same period the previous year. Net profit is expected to reach 65 million euros, or $88.2 million.
The board also approved a three-year plan, which forecasts sales on Jan. 31, 2014, will total 2.5 billion euros, or $3.4 billion, and net profits of more than 130 million euros, or $176.4 million. Earmarked investments are expected to reach 300 million euros, or $407.2 million.
The Milan-based Clessidra had been looking at buying a 30 percent stake in Roberto Cavalli’s fashion house, but talks came to a halt last year over the issue of price. The Washington-based Carlyle Group has an Italian division headquartered in Milan and owns 48 percent of luxury outerwear brand Moncler, which is planning to go public on the Milan Bourse next year.
The impending sale isn’t slowing Coin’s expansion. The retailer has teamed with Antonia Giacinti, one of Milan’s most exclusive independent stores to create a new luxury department store called Excelsior, due to open in September 2011.
Located in a former movie theater in one of the busiest pedestrians-only shopping streets in the center of Milan, in Corso Vittorio Emanuele, near the city’s cathedral, the building is being renovated by architect Jean Nouvel. Giacinti will have artistic direction over the project and, with her husband Maurizio Purificato, is finalizing contracts with designers whose brands will be available in the store.
The Antonia boutique carries labels ranging from Balmain and Lanvin to Balenciaga, Celine, Bottega Veneta and Fendi. The seven-floor Excelsior will sell women’s and men’s apparel, accessories, beauty, food and technology, in addition to featuring a penthouse coffee bar.
“This agreement is an absolute novelty in retail,” said Beraldo. “The idea is to create a network of quality collaborations that combine our expertise in operations with the energy typical of independent retailers, who bring information and dynamism. It’s a sort of a joint-venture, a way to renew the business through the work of international buyers.”
Purificato said, “This will be a large multibrand store and we want to reach out to that new international customer open to unique ideas, who is attracted by a multimedia, interactive shopping experience. This luxury lifestyle store is the first of its kind here, and, also through Nouvel’s innovative design, we’d like to offer an energetic, colorful and exciting venue.”
Purificato said it is likely the concept will be replicated in other cities.