Antichi Pellettieri (AP), the shoe and leathergoods subsidiary of Mariella Burani Fashion Group, is acquiring a 51 percent controlling stake in Coccinelle, the fast-growing Italian brand of handbags, which has been expanding the development and distribution of its footwear collection over the last few years. Coccinelle will thus join other brands like Baldinini, Braccialini, Francesco Biasia, Mafra and Sebastian, creating new economies of scale in raw material purchases and new opportunities for efficiency in logistics, distribution and cross-selling in various markets.

AP is paying the equivalent of 6.6 times the operating profit of Coccinelle before amortization and depreciation (EBITDA), which represented about 16.7 percent of the company’s sales of €49 million in 2005. With the inclusion of Coccinelle for all of last year on a pro forma basis, AP would have generated EBITDA of €28.2 million on sales of about €200 million, turning it into a major European player in the market for shoes and leathergoods in the «accessible luxury» segment.

MBFG had previously considered the acquisition of another leathergoods company based in France, Lancel, which is twice the size of Coccinelle, but it gave up in view of its losses. The acquisition of Coccinelle will probably delay now a planned public offering of AP by MBFG, which is already quoted on the Milan stock exchange. Credit Suisse First Boston and Citigroup would lead the international syndicate for the planned spin-off.

LVMH remains a strategic partner in AP with a stake of 10 percent through an investment company, L Capital. MBFG previously bought out from L Capital a minority share in AP, and it now owns 90 percent of its shares. Another investment firm, Development Capital 1 SCA, is now acquiring a 3 percent stake in AP and getting a convertible bond of €14 million in the company in partial payment of its 40 percent stake in Coccinelle. It will get the balance of €10 million in cash.

Coccinelle, which is also the licensee of Miss Sixty for handbags, was founded by Giacomo Mazzieri in 1978. Another member of his family, Marco Mazzieri, is selling his 9 percent interest in Coccinelle to AP, which has an option on the balance of the shares, held by other members of the Mazzieri family including Angelo Mazzieri, who will remain as president and chief executive of his company.

With this acquisition, the handbags segment will grow to 67 percent of AP’s turnover, with the balance consisting mainly of footwear. Last year, AP’s sales grew by 20.4 percent on an organic basis, driven by a 35.7 percent increase for Baldinini and an increase of 50.6 percent at Braccialini. Its margin improved, contributing to a 34.9 percent rise in MBFG’s EBITDA to €61 million for the year.

MBFG has announced a 67.4 percent increase in pre-tax earnings for 2005 to €27.1 million on the group’s 12.3 percent higher revenues of €482 million. Earnings before interest and tax (EBIT) grew by 44.5 percent to €41.9 million.

Produced at least in part at a partly owned factory in Tunisia, shoes are becoming an increasing portion of Coccinelle’s total turnover. Like MBFG and many of its brands, Coccinelle has been pursuing an active program for the establishment of single-brand stores around the world. They number 47, boosting MBFG’s total retail network to about 300 units. Directly operated stores represented 36 percent of MBFG’s total turnover in 2005.

Baldinini, which expects to raise its own sales to €45 million this year from €38 million in 2005, is planning to open 12 new stores in the next few months, including two in Rome. It will also come out with a fragrance.