The US subsidiary of Bruno Magli, the renowned Italian shoemaker acquired by the Opera investment fund in 2001, is set to come out of Chapter 11 bankruptcy protection in one month’s time, moving along the path to recovery. The bankruptcy court of Plano in Texas has approved a plan that will enable BM USA to reorganize its finances, focusing more heavily on wholesale distribution, and strengthening its relationship with major US department stores such as Saks Fifth Avenue and Neiman Marcus, and the multi-brand specialty stores.
The plan requires the US subsidiary to abandon the more onerous option of the corporate store, which led to serious cash flow problems, precipitating the bankruptcy filing last April. The 7 Bruno Magli stores on US territory were all closed in the past few months.Two other US subsidiaries – Uomo Magli Texas Inc and Donna Magli Texas Inc, owned 100 percent by the Italian parent company, were included in the bankruptcy protection measure.
The first step for BM USA Inc, in which Bruno Magli Italy has an 87 percent stake - is now to launch the shop-in-shop formula in US multi-brand stores, with a first corner due to open in the Arthur Beren specialty store on Wilshire Boulevard in Beverly Hills. Aaron Schwartz, chairman of BM USA Inc, states that the company may return to retail distribution, but not before 2006 at the earliest.
The Bologna-based company had sales of €63 million last year, 50 percent of which were generated on the US market. Martino Scabbia Guerrini - formerly with Tod’s, where he was responsible for the launch of the Fay brand - was appointed as CEO at the beginning of August and is supervising the turnaround plan.