Italian menswear supplier Ermenegildo Zegna is going “through the back door” on the New York Stock Exchange. The luxury fashion maker is expected to slip under an empty wallet this year, a so-called Spac. It is the abbreviation for Special Purpose Acquisition Company. Behind the English term hide cases of empty companies which are listed on the stock exchange, but have no activity of their own. At least until they have found a suitable property – either for a takeover or an equity stake.
In the case of luxury fashion manufacturer and the Spacs Investindustrial Acquisition, it is the latter case. The Zegna family is expected to continue to have a say in the business in the future. After the transaction, 62 percent of the business will remain family owned and 11 percent will go to Investindustrial. “We could have remained independent another 100 years,” said company boss Gildo Zegna, explaining the move to the Financial Times. But the opportunity was right, and the luxury fashion industry was very demanding. The transaction will bring in $ 880 million in new capital.
Zegna mainly sells business suits in nearly 300 of its own stores in 80 countries around the world. Like most luxury fashion manufacturers, the company is still suffering from the Corona crisis as stores have had to be closed for months. In 2020, Zegna saw its sales drop by around 20% to one billion euros. From this year, the Italian company hopes to reach 2019 sales again.
Spac, which Zegna is now due to IPO for US $ 3.2 billion, is owned by private equity firm Investindustrial. Founded in 1990, it has so far mainly invested in southern Europe. Sergio Ermotti is the head of Investindustrial. Investindustrial only listed Spac at the start of the year – and has now found a suitable company to fill the empty shell in a relatively short period of time.
Zegna is by no means the only Italian fashion company to have at least partially changed hands recently. On Sunday, it was learned that the family that owns Etro was selling 60% of the shares to financial investor L Catterton, which is backed by French luxury group LVMH. Etro is valued at around 500 million euros, according to insiders. L Catterton had previously swallowed shoe maker Birkenstock in Germany.