A Dubai-based group's bid to buy the high-end Italian fashion house Gianfranco Ferre has been accepted.
Paris Group to buy Gianfranco Ferre
The Dubai retailer Paris Group is to buy the debt-laden Italian fashion house Gianfranco Ferre, with plans for a quick investment of more than €30 million (Dh152.2m) in the label.
IT Holding group, which owns the designer brand, entered bankruptcy protection in February 2009. The deal also ensures that 180 Gianfranco Ferre workers will keep their jobs.
"We are extremely happy that the [Italian] government, together with the three state-appointed commissioners, Stanislao Chimenti, Andrea Ciccoli and Roberto Spada, have formally accepted the binding offer presented by Paris Group for the acquisition of Gianfranco Ferre," said Michaela Piva, the chief executive of Gianfranco Ferre. "We are sure that Paris Group will relaunch the brand to become one of the leading players in the fashion industry."
On Monday, commissioners appointed by the Italian government to oversee IT Holding accepted a binding offer from Paris Group, which held the regional franchise rights for Gianfranco Ferre, said a spokesman for the commissioners.
The offer would be sent to the Italian ministry of economic development for endorsement, and the group's industrial plan would also have to be presented to trade unions for approval, he said.
Paris Group is expected to take ownership by February 25, the date of the next Gianfranco Ferre fashion show, he said. The spokesman would not comment on financial details of the transaction, but the deal reportedly involves an investment of about €30m immediately and €100m over three years.
Paris Group's offer beat out a rival Italian bidbecause of its strategic plan for the luxury brand, which included keeping the manufacturing in Bologna, Italy, and retaining the company's approximately 180 employees, the spokesman said.
"The binding offer of Paris Group has been chosen mainly for three reasons," he said. "The industrial plan is quite good and, according to the commissioners, will grant a solid future for the [business], with huge investment into developing the brand and in developing their network of shops all around the world."
The US private-equity fund Prodos Capital Managementput in a bid last year to buy Gianfranco Ferre, but did not proceed.
The Italian fashion house was founded in 1978 by Gianfranco Ferre. He launched a women's ready-to-wear collection that year, and added a menswear collection in 1982.
The fashion house was acquired by IT Holding in 2002. Mr Ferre died in 2007.
IT Holding was placed under extraordinary administration in 2009, and commissioners were appointed by the Italian government to manage the group. The commissioners were also tasked with selling IT Holding's three units: Gianfranco Ferre; Itierre, the group's licensing and manufacturing arm; and Malo, which specialises in cashmere apparel.
Gianfranco Ferre was the last unit of IT Holding to be sold.
Paris Group has more than 250 boutiques across the region, with brands including Gianfranco Ferre, Versace, Cerruti and Pierre Cardin. The group also has a food and beverage division, Sankari Hospitality, whose outlets include Fauchon, Biella, Chop Chop and Al Halabi.
Representatives of the Paris Group were unavailable for comment. Several high-profile western retail brands have been bought by investors based in the Gulf in recent years.
In May last year, the London department store Harrods was purchased by the sovereign wealth fund Qatar Holding for a reported £1.5 billion (Dh8.84bn). Istithmar World, a private-equity division of Dubai World, bought the US discount department store chain Loehmann's in 2006 for US$300m (Dh1.bn). In 2007, Istithmar acquired the luxury speciality retailer Barneys New York for $825m.