Feb 6, 2015
Italian fashion house
Liu Jo gets set for sale parade
Feb 6, 2015
LONDON, United Kingdom - The founding brothers of Italian fashion house Liu Jo are getting ready for a public share listing or partial sale to resolve differences over the company's future ownership, three sources familiar with the matter said.
Vannis Marchi, 67, is looking to sell his 36.8 percent stake in the Italian firm, which one of the sources said could be valued at up to 500 million euros ($573 million), 10 times its earnings before interest, tax, depreciation and amortisation (EBITDA) of 50 million euros.
His younger brother Marco, 52, owns 50.8 percent and intends to stay onboard as a majority shareholder, the sources said.
"Liu Jo's owners are gearing up for an exit and the business has the right figures to attract investors," one of the sources said, adding that a "dual track" process of simultaneously testing investor appetites for either a market flotation or an outright stake sale is expected to begin in the next 12 months.
An official at Liu Jo said that the company is not currently reviewing its options.
Liu Jo, based in the central Italian town of Carpi, employs 550 people and operates around 240 stores worldwide, primarily in Europe and Asia.
It was launched as a textile business in 1995 and later developed into a major pret-a-porter brand, with advertising campaigns featuring Kate Moss and Dree Hemingway.
The fashion house, known for its "street glam" style associated with denim collection Liu Jo Jeans, would use any new capital raised in the sale process to give a boost to its expansion in North America, offsetting weaker markets in eastern Europe, the sources said.
The Marchi brothers, who have so far favoured bank credit over outside investors, are now inclined to follow the path of Versace, which last year sold a 20 percent stake to U.S. buyout firm Blackstone for 210 million euros.
Meetings with a number of private equity firms have already taken place but the brothers have yet to find the right partner, one of the sources said. They are working with consultants and will hire investment banks at a later stage.
With revenues still growing Liu Jo would command a higher valuation than rival brand Cavalli who entered exclusive talks with Milan-based private equity firm Clessidra in December, the sources said.
Liu Jo reported revenues rose to 281 million euros in 2013 from 155 million euros in 2006, and are expected to have hit around 300 million euros last year, two of the sources said.
The value of fashion merger and acquisition deals in Italy tumbled to $352 million in 2014 from $2.8 billion in 2013, according to Thomson Reuters data, due to a lack of any major deals since Loro Piana's $2.5 billion sale to French group LVMH in 2013.
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