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Missoni sells 41.2 percent stake to investment fund to remain relevant

By Angela Gonzalez-Rodriguez


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Management |ANALYSIS

Italian family-owned fashion house Missoni has sold a majority stake to an investment fund as part of its strategy to remain competitive in a an ever concentrated industry. Italian investment fund FSI will take a 41.2 percent stake in the firm to help expand the business and get the company ready for a potential public listing.

In a corporate statement, creative director Angela Missoni said the family will retain a 58.8 percent stake and operational control of the knitwear brand. “The Missoni family struck us for its passion, creative energy and absolute fidelity to the brand’s codes,” FSI CEO Maurizio Tomagnini said when commenting on the deal.

"The three generations of the Missoni Family, led by Rosita, are pleased to be entering into this agreement with FSI, a prestigious and patient Italian investor with an international network. It is especially auspicious that this partnership is forged on the year of our 65th anniversary, a time to celebrate our history. I am proud that Missoni will be entering into this new chapter, safeguarding both our family unity and our brand DNA. I am confident that with the support of FSI and the strategic vision of the incoming vice-chairman, Michele Norsa, we will be able to lead this precious family jewel into a bright future," Angela Missoni, creative director, summed up the reasons behind the Missoni’s decision.

FSI’s entrance in the company’s capital and management team will allow the company founded 65 years ago to look ahead, helping the Missoni’s third generation to “safeguard both our family unity and our brand DNA.”

The brand’s annual revenues are nearing 150 million euros, 75 percent of which come from exports. Margins stand at 10 percent of turnover, with 12 million dollars in revenues coming from royalties. "The investment in Missoni is an extraordinary opportunity to support the growth of this unique Italian brand into a global leader," said the investment fund’s CEO.

As highlighted by market sources, the Missoni family has had a great timing, allowing external help to come in at a time when the company is free of debts and still healthy. As reported by ‘La Repubblica’, although the company is not growing and has all foreign subsidiaries at a loss, it still makes profits. The Italian journal refers to the last official data available (2016) that pointed out that income statement said 3.4 million euros in profits.

Prior to this recapitalisation, with 8 million net debts, the company was worth 113 million euros, about 17.38 times the 2017 Ebidta (6.5 million euros). This is, according to Deutsche Bank, higher than Prada’s valuation which is 15.7 times its Ebitda; of Tod's (11.5 times), but less than Ferragamo (17.7) and Cucinelli (22.5).

Talking financials, FSI CEO Maurizio Tomagnini said the goal of the investment (worth 70 million euros) is to boost Missoni o a position of global leadership”. The Italian fashion label had Rothschild advising on the deal.

This deal also confirms the end of an era for family-run fashion businesses in Italy. Missoni’s move follows that of other Italian brands including Gucci, Bottega Veneta and Fendi, which turned to global luxury conglomerates to secure their future in an ever concentrated and changing fashion industry.

Photo:Missoni Web