Roberto Cavalli Applies for Composition With Creditors

The sale of the Roberto Cavalli company has hit another stumbling block.

The Roberto Cavalli SpA board on Friday revealed that it had decided to file a restructuring plan with the Court of Milan that would allow it to continue to operate while holding discussions with creditors under the so-called process of “composition with creditors.”

The board said the decision comes despite ongoing discussions with shareholders and potential investors “with the resources necessary to overcome its current state of financial difficulties.”

“Through this request, the company intends to utilize a well-defined legal mechanism arranged by the legislator to manage and overcome critical phases that could also lead to the suspension of some activities in foreign countries,” stated the company. To wit, sources say the American subsidiary will be filing Chapter 7, ceasing all operations and that stores are expected to close and go out of business starting today.

The Court of Milan will examine the application and “define a period of time during which the company will keep an open dialogue with all the subjects and competent authorities to define the details of the possible next steps to be carried out.”

As reported, Philipp Plein was said to be interested in taking control of the company but has distanced himself from the negotiations, leaving the American Bluestar Alliance as the only bidder. Creative director Paul Surridge exited the brand this week.

This is the latest development in a long and winding story — and a source underscored how “the situations and the people have changed so many times, it would be hard to understand what went wrong. None of the main players steering the deal are still involved.”

At the end of April 2015, Clessidra Sgr revealed it was buying 90 percent of Roberto Cavalli SpA in a deal that was to be completed by a newly established company called Varenne, controlled by Clessidra but including L-GAM and Chow Tai Fook Enterprises Ltd.

Longtime Bulgari and LVMH Moët Hennessy Louis Vuitton executive Francesco Trapani, who was said to have been a leading force in the negotiations with Cavalli, took on the role of chairman of the firm, while Renato Semerari became the new CEO.

In May 2016, Clessidra was sold to Italmobiliare SpA following the death of its founder, chairman and CEO Claudio Sposito, who had built the fund into one of the most active in Italy’s luxury and fashion arena. Trapani, who succeeded Sposito, left in September that year after the sale to Italmobiliare and is now on the board of Tiffany & Co. and has been investing in several projects including food.

In October 2016, then-creative director Peter Dundas exited the company shortly after the arrival at the end of July of former Versace CEO Gian Giacomo Ferraris, tapped to lead the company succeeding Semerari and tasked with a reorganization of the company and cuts to its workforce that included closing its Milan operations and transfer of all functions to Osmannoro, near Florence, Italy. Ferraris had succeeded in turning Versace and Jil Sander around before his arrival at Cavalli.

Carlo Pesenti is CEO of Italmobiliare, and the powerful Pesenti family founded one the largest cement producers in the world, Italcementi, in Bergamo, Italy, in 1864. The Pesentis, who over the years also controlled banks, insurance companies and automaker Lancia, among other investments, are flush with cash after the recent sale of stakes in Italcementi to HeidelbergCement. Sources have been saying for months that Clessidra wants to exit the fashion business.

The agreement with Clessidra, revealed at the end of April 2015, was only that last of a long-running saga of Cavalli the designer searching for an investor. Clessidra was in talks with Cavalli as far back as 2009, and at the time, the designer was in discussions to sell a 30 percent stake in his firm, but a deal fell through over price. Before that, in 2006, Cavalli seemed close to selling to Saudi Arabian private equity fund SAB Capital, which submitted a bid for 60 percent of his business, but the designer pulled out of the talks.

Cavalli went back on the hunt for an investor in 2014, and private equity fund Permira was interested in acquiring the entire company, but again talks broke down over valuation. Bahrain-based Investcorp, a former Gucci owner, was also said to be looking at the company.

Cavalli in 2014 also negotiated for months with the Russian firm VTB Capital, with a deal initially expected to close in the fall, but in a surprising turn of events, the designer started talks with Clessidra in December. VTB Capital is part of VTB Group, a major Russian investment bank, but sources said it was acting for a Cyprus-based fund.

This story was reported by WWD and originally appeared on WWD.com.

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