March 1, 2018 / 11:04 AM / 19 days ago

China's Fosun to take control of Austrian lingerie maker Wolford

VIENNA (Reuters) - China’s Fosun (0656.HK) will pay 55 million euros to buy a controlling stake in loss-making luxury lingerie and legwear specialist Wolford (WLFD.VI) from its founding family and will make an offer to remaining shareholders, both groups said on Thursday.

A shop of Austrian luxury textiles maker Wolford is seen in the centre of Vienna, Austria, March 1, 2018. REUTERS/Heinz-Peter Bader

Fosun, which wants full control of Wolford, became majority shareholder in struggling French fashion house Lanvin earlier this month and also has stakes in Italian high-end menswear label Caruso and U.S. knitwear firm St. John Knits.

Besides struggling with falling demand for its luxury tights, bras and shirts, Wolford has been suffering logistics problems and dealing with management upheaval in recent months and has been loss-making for more than two years.

Around 50 investors mainly from North America and Asia had shown interest in taking over the founding family’s stake after it announced its intention to sell in June, Wolford said.

Fosun has agreed to pay 33 million euros ($40 million) for the 50.9 percent stake and will provide up to 22 million euros as part of a capital increase.

It said it intends to offer other shareholders 13.67 euros per share to gain full control, boosting the Austrian group’s stock.

Slideshow (4 Images)

Wolford shares traded 10.2 percent higher at 14.10 euros at 1400 GMT. They have lost more than 60 percent over the past two years.

The Bregenz, western Austria-based company’s key markets are the United States, Germany, France, Austria and Britain.

    Wolford reported a loss before interest and tax (EBIT) of 6.2 million euros for the six months through October, an improvement of 21 percent on the previous year’s first half.

    2017/18 half year revenue was flat at 70.2 million euros.

    The closing of the share purchase agreement and

    the general meeting that has to approve the cash capital increase are intended to take place in May, Wolford said.

    Reporting by Kirsti Knolle; editing by Jane Merriman and Elaine Hardcastle

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