L Catterton increases stake in Etro | kbnmart

L Catterton is strengthening its grip on Etro’s capital. The LVMH-linked investment fund, which acquired a majority stake in the historic Italian luxury house in July 2021 — taking a 60% stake with the founding family keeping the remaining 40% — is opening up its portfolio again. Contacted by MF Fashion, Etro declined to comment on reports in Milan daily MF Fashion that L Catterton could increase its stake further.

Amidst the recovery since its takeover by L. Catterton, Etro will benefit from new financial resources through a new refinancing after a €15 million capital increase last fall. At the last shareholders’ meeting, it was decided to go ahead with a €1.73 million capital increase, the financial newspaper reported, citing the minutes of the meeting.

According to the MF Fashion website, L Catterton has expressed its willingness to fully subscribe to this capital increase, while the Etro family has chosen not to exercise its pre-emptive rights, allowing the investment fund to increase its stake.

Over the past three years, Etro has comprehensively revamped its organization, operations and strategy under the leadership of CEO Fabrizio Cardinale, with a new aesthetic spearheaded by Creative Director Marco De Vincenzo. In 2022, the brand saw its revenues increase by 17% compared to 2021, to €277 million, marking a return to operating profit for the first time since the Covid pandemic, with a positive and growing EBITDA of €9 million. However, the brand reported a loss of €23.6 million at the time.

Despite the recent challenges facing the luxury market, exacerbated by the difficult economic climate, Etro continues to launch new activities and initiatives. In early July, it unveiled a temporary space in Selfridges in London, open until August 12, dedicated to the Love Trotter and Bond bag models made from sleeping fabrics from the house’s archives.