Milan—Prodos Capital Management, a U.S. private equity firm, and Samsung’s textile division are reportedly the highest bidders in an auction to buy Italian fashion label Gianfranco Ferré, which is under bankruptcy protection.
According to published reports in Italy today, bankruptcy administrators have selected a joint bid of about $20.2 million, giving Prodos a majority stake and making Samsung’s Cheil textile division a minority partner that would provide working capital for the high costs of inventory and production. Douglas Song, an executive at Prodos, attended Ferré’s fashion show in Milan last Friday.
Federico Steiner, a spokesman for the bankruptcy administrators, said that no decision had been made yet, but that negotiations were taking place with the parties who submitted binding offers last month.
The final decision on the offer will be made by the government of Prime Minister Silvio Berlusconi probably in the next two weeks. Berlusconi and his interim economics minister are likely to approve the bid since his government has been pushing to keep the jobs and manufacturing in Italy after the restructuring. Prodos reportedly has also committed to keeping the company’s 150 employees and a factory in Bologna.
Ferré was part of the Italian fashion group IT Holding until it declared bankruptcy last year. The label had struggled since Ferré died three years ago. The group’s other holdings, which include Malo and Ittierre, the licensing and manufacturing business that produces clothes for labels such as Just Cavalli, are being sold separately.
Several fashion labels fell victim of the Great Recession as consumers dramatically dropped their spending in the last two years. Mariella Burani is also in the hands of administrators, while Christian Lacroix, the French fashion house, went into liquidation last year. If approved, Ferré could become first major fashion label felled by the economic crisis to come out the other end of restructuring.