Italy fashion group Ittierre expects to bag new French licence

Wed Nov 28, 2012 7:19am EST

* CEO says new licence deal to be announced soon

* Says Qatari investments an opportunity for partnerships

* Sees revenue stable, small profit in 2012

By Antonella Ciancio

MILAN, Nov 28 (Reuters) - Italian fashion manufacturing group Ittierre is close to signing a licence deal with a leading French group this month, part of an effort to recover from past financial troubles that includes a new brand porfolio and a retail overhaul, its head told Reuters.

"We are close to announcing a very important license deal," Chief Executive Antonio Bianchi said at Ittierre's offices. He declined to discuss details, beyond saying the deal would be announced soon and that it involved an unlisted, family-run French company. He also indicated Ittierre was looking at other acquisitions.

Ittierre makes clothing and accessories for Tommy Hilfiger, Karl Lagerfeld Paris, Galliano and other brands. Owning manufacturing and distribution processes is a key advantage for the company, especially during an economic slowdown.

Fashion can usually resist slowdowns, because it caters to the wealthy, but it's feeling the pinch of southern Europe's prolonged recession, which is starting to threaten France as well.

Global sales growth of luxury goods is expected to slow to just 5 percent this year from 13 percent in 2011, at constant exchange rates, according to consultancy Bain & Co and Italian luxury body Altagamma.

"The economic situation in Europe is very difficult and France is next in line," Bianchi said. "Shops in Italy are empty and recent weeks have not shown any improvement. We are seeking partners, opening new stores, all this in a very challenging economic situation."

Wealthy shoppers from China, Russia and the Middle East are keeping the industry afloat, Bianchi said. He added that he was looking with interest at possible partnerships with Qatari investors that are eyeing deals in Italy.

"I see many acquisitions of brands coming," he said.

RETAIL PUSH

Ittierre's parent company, IT Holding, nearly went bankrupt during the 2009 financial meltdown. In January 2011, Ittierre was sold to Bianchi's Albisetti, a family-owned company that has made fine underwear for luxury brands for over 30 years.

After booming in the '90s, the fashion licence industry suffered during the last recession when fashion houses such as Dolce & Gabbana and Roberto Cavalli bought back their licences to better control image and revenues. Ittierre lost Just Cavalli, the young-focused line that Cavalli now makes with Diesel founder Renzo Rosso.

Despite the current slump, Bianchi said he was confident of attracting new brands because 80 percent of the group's production is in Italy, where it controls the process from manufacturing to distribution.

Since last year, Ittierre has added American brand Tommy Hilfiger and France's Karl Lagerfeld Paris, Aquascutum and Pierre Balmain to its staple nine-brand portfolio.

The new collections, which include high-profile top lines, will help Ittierre be profitable this year and report stable revenues for 155 million euros ($200 million), he said. Combined-group sales are expected to reach 195 million euros.

Bianchi said Ittierre would also benefit from the opening of up to new 40 stores over the next two to three years. The company, which sells from Asia to the United States, has recently opened new shops called HIT Gallery, which offer all the licenses owned by Ittierre and Albisetti in a single store.

The format blends the traditional format of shops directly managed by single houses with multi-brand stores, which offer more brands but are hobbled by a dispersed distribution chain. ($1 = 0.7733 euros) (Reporting by Antonella Ciancio; editing by Larry King)