China Fosun Fashion Group Buys Back Carusos Debt, Injects Capital – WWD

MILAN — Formal wear has been featured front and center on runways in recent seasons, but the effects of the COVID-19 pandemic are still very real, and the category continues to be impacted by suspended business travel and new work-from-home routines.

Nonetheless – and in a sign of confidence from its majority shareholder – luxury menswear brand Caruso announced on Thursday that it had signed an agreement with its owner Fosun Fashion Group and its financial creditor, the bank. This led to the Chinese conglomerate buying back the company’s financial debt at a discount. At the same time, the group injected liquidity into Caruso through a capital increase.

Although the financial terms of the deal were not disclosed, the company said as a result of the agreement, it had no financial obligations to the bank and was allowed to stand with a new seven-year business plan that went into action last year.

Speaking to WWD, Marco Angeloni, president and chief executive officer of Caruso, praised FFG’s “forward-looking approach and decisions to support the company’s management and value its assets.”

“This company is an invaluable asset, as it specializes primarily in the manufacture of luxury coats which is one of the most difficult items to produce of our quality,” he said. “After a year of negotiations, shareholders recognized the value of this proposed deal.”

The development reflects FFG’s commitment to building its portfolio of luxury brands, including French house Lanvin, Austrian socks specialist Wolford, American fashion brand St. John and the recently acquired Sergio Rossi footwear label.

Praising the company’s manufacturing know-how, FFG president Joann Cheng said the group “strongly believes that this agreement will help Caruso contain the effects of the epidemic, and at the same time, with the collaboration of FFG’s resource portfolio, further accelerate its global footprint. development.”

Through this additional capital, the company plans to support its business plan for the 2020-27 period. Angeloni described it as “cautious” but in tune with the trends the pandemic has fostered, including customers’ desire for aloof elegance, which is at the core of the brand’s aesthetic.

“We are coming out of 18 months of an unprecedented crisis for the sector, not only financially healthy and with a thriving business [plan] but also stronger as a team capable of pursuing clear and coherent goals despite all the current noise and uncertainty,” added the CEO, noting that the company employs about 400 people.

In 2020 Caruso’s total revenue was south of 30 million euros, down from 42 million euros in 2019.

As part of the plan, Caruso signed new distribution agreements across geographies that have secured the brand’s presence in high-end boutiques and department stores. When it opened a showroom in Manhattan in 2019, the brand now relied on local distributors. Caruso has also recently established relationships with local partners in Northern Europe, the Middle East and Japan.

While it has embraced a new distribution agenda that relies heavily on wholesale accounts, the company will open a store at Harrods London in the first week of August and plans to launch a standalone flagship product in Shanghai in October. Angeloni also mentioned that a small-scale unit in Milan was in progress, but was reluctant to provide further details as it was not part of the business plan.

To increase its international visibility, Caruso returns after almost two decades of absence at the latest issue of the Pitti Uomo men’s trade show, presenting a spring 2022 collection designed by creative director Aldo Maria Camillo that embraces effortless sophistication, revisiting classic formal wear with a touch of modernity that is simply experimental. It was also coming to the Pitti Connect digital platform in January.

In addition to its own brands, the company is also committed to further strengthening its Fabbrica Sartoriale division dedicated to third-party manufacturing of luxury brands. During the pandemic-hit 2020, Caruso managed to expand the size and scope of the division that branched out into the women’s clothing category.

The division accounts for the largest share of the company’s sales and Angeloni said it remains “very lively even during the pandemic,” enabling the company to gain new clients.

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