Aeffe, the Italian luxury goods group which owns the shoe maker Pollini, has filed for a listing on the Milan stock exchange, with an initial public offering expected by the end of the summer. The company is seeking a listing on the Star segment of the Bourse, which requires the flotation of at least 35 percent of its capital. The IPO will include the sale of existing and newly issued shares.
So far, the company has been coy about the amount and use of the proceeds stemming from the recapitalisation. However, Aeffe has already approved a capital increase with a nominal value of €7.5 million to finance the operation. The actual amount of the capital hike will depend on the share price set for the IPO. In general the funds are expected to be used to finance the group’s expansion and to reimburse part of the group’s net debt, which amounted to €115.3 million in 2006.
In November last year, Aeffe bought of 20 percent of its own capital from LDV Holding, a unit of the bank Sanpaolo. The stake had been sold to LDV in 2000 to finance the group’s expansion through the acquisition of brands and the development of a distribution network. There is speculation that Aeffe will use the IPO to resell the 20 percent while launching an equity increase of a similar size.
The foundations of the Aeffe group were laid in 1975, when the designer Alberta Ferretti created the company, which she continues to run together with her brother Massimo. In 1999, the group took control of Moschino, in which it has a 70 percent stake, and in 2001 it acquired a 72 percent interest in Pollini.
The group also controls 75 percent of Velmar, which specialises in the production of lingerie and swimwear, and has production and distribution agreements with Jean-Paul Gauthier, Narciso Rodriguez, Basso & Brooke, Sinha-Stanic and Authier.
In 2006, Aeffe booked total sales of €275.1 million, of which 70 percent was achieved outside Italy, up 10.0 percent from last year’s €249.9 million. Sales of ready-to-wear clothing rose by 7.8 percent from the previous year, representing 80.5 percent of the total turnover. The balance, or about €34 million, came from sales of footwear and leathergoods, which rose by 16.1 percent.
Wholesale revenues grew by 10.3 percent, representing 70 percent of sales, while retail revenues rose by 16.2 percent to represent 25 percent of sales. The remainder of the revenues was generated by royalties. The gross operating profit (EBITDA) rose by 26.1 percent to €37.1 million, while net profits increased 45.0 percent to €8 million.
The global coordinators of the planned IPO are the investment banks Mediobanca and Merrill Lynch.