The Italian parent company of Kappa, Robe di Kappa and Jesus Jeans has signed a preliminary, yet irreversible deal to acquire the K.Way brand of apparel from Italy’s Formula Sport Group and to become the global master licensee for its Superga brand of casual footwear. FSG has also agreed to shed the Italian license for Umbro.
BasicNet is paying €8 million to buy the K-Way brand, which had annual sales of about €10 million lately. It has agreed to pay royalties of 4 percent to FSG on Superga’s sales for a period of 14 years, with an option to acquire that brand as well during a 3-year window opening up in 2007, with the purchase price based on the royalty stream obtained by then. Superga, which has been performing better lately, is generating annual sales of about €40 million. The board of BasicNet, a company which is relatively indebted, will shortly consider the opportunity of an equity increase to help support the consolidation and development of these new businesses.
K-Way and Superga, two former properties of Pirelli, are thus moving back to Turin, headquarters of BasicNet, after 6 months of negotiations. BasicNet has not yet finalized its business plan for their integration, but Superga should remain as a streetwear brand like Robe di Kappa, with a strong merchandising program. While its wholesale footwear business will continue, Superga apparel will be sold mainly in its concept stores.
Renato Benasedo, a former Italian country manager of Reebok who had been successful as Umbro’s licensee for Italy and Switzerland, had formed FSG together with other investors to extend his brand portfolio, buying the struggling K.Way and Superga from an Italian investment group, Sopaf, and licensing for a while the Anzi Besson line. Apparently, the project was much too ambitious. Benasedo remains as chairman of FSG, but an equity increase of undisclosed proportions has led a Swiss holding company, Connvert, to raise its own stake in FSG from 10 to 81 percent. The balance is held by Sopaf. Nicolò von Wuster, managing director of FSG, is now a shareholder and CEO of Connvert (more details in Sporting Goods Intelligence Europe).