Italian Court Accepts Corneliani’s Composition With Creditors Request
A Mantua, Italy, court has accepted Corneliani’s request for a composition with creditors, which is seen as “a fundamental step in the turnaround and relaunch” of the storied men’s wear firm, the company said Tuesday.
Chief executive officer Giorgio Brandazza said the restructuring plan presented by Corneliani and supported by Bahrain-based Investcorp and the fund Invitalia merited “being presented to creditors, offering new opportunities for new investments in the company. The composition with creditors formally guarantees the company’s continuity.” This will allow Corneliani “to restart without further delays, adapting its business model and organization to the new market needs in order to ensure the high-quality standards expected and the sustainability of products and services.”
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The restructuring plan aims to help grow the company and increase its competitiveness while protecting its heritage and creativity, with the best production and management structure, according to a statement issued by the company.
In March, as reported, Investcorp agreed to create a NewCo that would invest 7 million euros in the company.
In April, Corneliani presented to the Mantua court a new request for a composition with creditors, “which will guarantee business continuity and Investcorp indirect control through the NewCo,” as per a statement released by the Filctem Cgil, Femca Cisl, Uiltec Uil unions at the time.
Investcorp acquired a majority stake in Corneliani in mid-2016 in a deal estimated at around $100 million, and was asked to present a new industrial plan to restructure the brand with a focus on developing solutions to safeguard Corneliani’s work force, as requested by both the unions and the Ministry for Economic Development.
Corneliani is also expected to receive a 10-million-euro investment from the Italian government through the Ministry for Economic Development as part of the “Re-Launch” Decree developed last summer by the Italian government to support the restart of the country after the COVID-19 pandemic.
Corneliani has never stopped its activities and will begin its sales campaign for the spring/summer 2022 collection on July 19, both IRL and through a virtual showroom.
The company, known for its tailoring, is evolving with the New Formal collection, adapting suits and jackets inspired by casualwear with items such as the bomber jacket, the shirt or cardigan jacket and the hoodie jacket.
It is also focusing on traceability and sustainability with its Circle capsule and is working on its pre-fall collection, which will be available in November.
The struggles experienced by the formal men’s wear segment have been accelerated by the impact of COVID-19 and Corneliani is not alone in adapting to what is likely to be a new dress code blending casual and tailored as men return to the office.
In April, Kering-owned Brioni presented an industrial plan for the 2021 to 2025 period, which involves personnel cuts across several of its production sites.
In the period until 2025, Brioni estimated it will let go of up to a maximum of around 320 workers, directly and indirectly employed in production, rationalizing costs and scaling back production sites in the towns of Penne (Pescara), Montebello di Bertona (Pescara), and Civitella Casanova (Pescara), which are staffed by more than 1,000 employees. The goal, said Brioni, is “to implement all necessary actions to relaunch and develop the brand.”
However, to reduce the impact as much as possible, Brioni is working with the unions to find measures for reemployment, use wage support connected to the COVID-19 period, the Extraordinary Redundancy Fund, all available social safety nets, early retirement and forms of incentives and economic compensation, and reallocation within the group.
Pal Zileri has also been severely impacted by the pandemic and, at the end of last year, Forall Confezioni SpA, which produces the storied men’s wear brand, informed trade unions that it planned to cease the operations of its manufacturing plant in Quinto Vicentino, outside the Italian town of Vicenza. This means laying off 250 employees working at the plant, but the number could reach 400, including employees in offices and sales assistants in stores around the world.
Ceasing operations would allow Forall’s employees to be paid through the state’s extraordinary wage fund, or CIGS, and allow the brand to continue to exist, while the owner, Mayhoola, will try to find an industrial partner for the plant.
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