MILAN — Chic deconstructed suits and a return to classic elegance are expected to bring some relief to storied Italian sartorial men’s wear companies, which have been impacted for years by the strength of streetwear trends and casual looks, as well as the effects of the COVID-19 pandemic and the work-from-home routine.
While the Ermenegildo Zegna Group prepares to publicly list on the New York Stock Exchange by the end of the year in a deal that is expected to give the fashion group a market capitalization of $2.5 billion, a number of other companies are facing a much different scenario.
Corneliani is working on a turnaround and relaunch of the storied brand after a Mantua, Italy, court in June accepted the company’s request for a composition with creditors. In March, as reported, Bahrain-based Investcorp, which took control of Corneliani in 2016 in a deal estimated at around $100 million, agreed to create a NewCo that would invest 7 million euros in the company. The restructuring plan is supported by Investcorp and the fund Invitalia.
Corneliani is also expected to receive a 10 million euro investment from the Italian government through the Ministry for Economic Development as part of the “Re-Launch” Decree established to support the restart of the country after the pandemic.
The company, known for its tailoring, is evolving with the New Formal collection, adapting suits and jackets inspired by casualwear with items such as the bomber jacket, the shirt or cardigan jacket and the hoodie jacket.
Corneliani is not alone in adapting to what is likely to be a new dress code for men that blends casual and tailored, which is also leading to cutting costs and major changes in manufacturing.
In April, Kering-owned Brioni presented an industrial plan for the 2021 to 2025 period, which involves personnel cuts across several of its production sites with the goal of relaunching and developing the brand.
In the period until 2025, Brioni estimated it will let go of up to a maximum of around 320 workers, directly and indirectly employed in production, rationalizing costs and scaling back production sites in the towns of Penne (Pescara), Montebello di Bertona (Pescara) and Civitella Casanova (Pescara), which are staffed by more than 1,000 employees.
However, to reduce the impact as much as possible, Brioni is working with the unions to find measures for reemployment, use wage support connected to the COVID-19 period, the Extraordinary Redundancy Fund, all available social safety nets, early retirement and forms of incentives and economic compensation, and reallocation within the group.
Pal Zileri has also been severely impacted by the pandemic and, at the end of last year, Forall Confezioni SpA, which produces the storied men’s wear brand, informed trade unions that it planned to cease operations at its manufacturing plant in Quinto Vicentino, outside the Italian town of Vicenza. This means laying off 250 employees working at the plant, but the number could reach 400, including employees in offices and sales assistants in stores worldwide.
Ceasing operations would allow Forall’s employees to be paid through the state’s extraordinary wage fund, or CIGS, and allow the brand to continue to exist, while the owner, Qatar-based Mayhoola, will try to find an industrial partner for the plant.
In July, luxury men’s wear brand Caruso said it had signed an agreement with its owner Fosun Fashion Group and financial creditors, whereby the Chinese conglomerate will buy back the company’s debts at a discounted price. At the same time the group is injecting liquidity into Caruso through a capital increase, but financial terms of the deals were not disclosed. These steps will allow Fosun to stand by its new seven-year business plan for Caruso set in motion last year.
The development reflects FFG’s commitment to build its luxury portfolio of brands, which include French house Lanvin, Austrian hosiery specialist Wolford, American fashion brand St. John and the recently acquired Sergio Rossi footwear label.
Caruso plans to unveil a stand-alone flagship in Shanghai by October.
In addition to its proprietary brand, the company is committed to further strengthening its Fabbrica Sartoriale Italiana division dedicated to third-party manufacturing for luxury brands.