Liu Jo, Blumarine Owner Still Pondering Group IPO
MILAN — An IPO is still in the cards for the owner of Liu Jo and Blumarine, EIH Eccellenze Italiane, as the group, which also owns a minority stake in retailer Coin, keeps evaluating market conditions.
In an interview with WWD, founder and president of the board Marco Marchi pointed to robust growth for the conglomerate, spurred by customer loyalty to the Liu Jo contemporary brand and the successful creative shift at Blumarine.
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Hiring Moncler SpA alum Paola Durante as general manager for Liu Jo last June suggested a renewed interest to go public for Marchi, who had originally planned a listing of Liu Jo in 2018, a project that the entrepreneur has said was postponed because of unfavorable market conditions.
The executive now says the listing of the entire group is on the table, characterizing the potential move as an opportunity rather than a necessity.
“Since 2018, the company has been organized to be ready whenever an opportunity pops up. Paola’s arrival is a strong plus, for the skills she developed throughout her career, and because she chose a company that has the right features to become a successful case story. The fact that [she decided to] share a journey geared at an extraordinary operation [listing] is a reason of pride as it means we had headed in the right direction [before],” Marchi told WWD.
A date has not been set for the time being as Eccellenze Italiane needs “to seize the best moment to make it work successfully,” Marchi said.
“We see a complex and turmoiled environment in the market, so we don’t see [listing] as an opportunity in the short term. However, we’re committed to keep growing in a healthy and responsible manner… we will do it whenever all conditions align, otherwise we will keep doing what we do in a virtuous way,” he said.
“My ambition is to ensure that Italian companies can survive the entrepreneur who founded them,” Marchi explained. “This is a must and a priority high on my agenda every day. I think that an IPO today is a great and important opportunity not only for the group per se but also for the brands joining it to guarantee a solid and virtuous future for them.”
The entrepreneur dodged questions about making additional acquisitions, but said ongoing conversations are happening with several parties. “I value the idea of synergies and [shared] know-how in supporting growth with respect to the identities of each brand. We’re always having conversations with entrepreneurs who are triggered and curious about Eccellenze Italiane as the house for brands in the premium segment,” he said.
Marchi established the conglomerate on the heels of the acquisition in November 2019 of the Gruppo Blufin and its brands Blumarine, Blugirl, Anna Molinari and Be Blumarine, a week after announcing he had bought a 15 percent stake in Coin SpA.
The executive declined to disclose the group’s total revenues for 2022 beyond saying they jumped double digits compared to the previous year, but detailed performances for the fashion brands in its portfolio.
The flagship Liu Jo brand navigated 2022, a year he described as “unprecedented” and impacted by the war in Europe and rising inflation that dented consumer confidence and spending power in Europe, by leveraging its global brand awareness.
“Remaining top of mind for our clientele despite the current climate has helped us achieve great results,” Marchi said, adding that new markets including the Middle East and Latin America, especially Mexico, proved dynamic and drawn to Made in Italy.
To this end, Liu Jo, which in 2021 posted revenues of 411 million euros, introduced a new eco-minded store concept at Abu Dhabi’s The Galleria Al Maryah Island in October, and at the Dubai Mall of Emirates in August. It also strengthened its presence in Mexico, unveiling six corners at the El Palácio De Hierro department store.
Europe, Germany, France and Spain are growing exponentially for the brand, Marchi said. In Spain, Liu Jo opened two stores this month for a total of 32, and plans five more units by 2025.
The retail push does not necessarily suggest Liu Jo is done with wholesale, which currently accounts for 60 percent of the business.
During COVID-19, the wholesale system was challenged by the industry, but Marchi opined that “in this unprecedented moment, the customer service provided by wholesale accounts has a pivotal role in securing customers’ loyalty,” adding that the company has benefited from its omnichannel business model.
The entrepreneur took pride in the successful turnaround of the Blumarine brand, for which he expects revenues to hit the 50 million euros threshold in a few years.
Despite the headwinds caused by the pandemic and consequent need to adjust the strategy, Marchi pointed to a new phase for the brand through the introduction of new product categories, including handbags, which are viewed as pivotal in expanding its scope and to fuel the Y2K aesthetic that creative director Nicola Brognano has imprinted on Blumarine since his appointment in 2019.
“The path has been marked by obstacles due to the extraordinary market conditions,” said Marchi, explaining that its “aesthetics needed to be fixed and tweaked.”
The radical change in perception has reverberated across business units and influenced the distribution strategy.
“In Italy, storied retailers that were drawn to the brand’s previous look saw [the change] as a friction and at the same time, 70 percent of our turnover is now generated abroad, where this new daring aesthetic is reaping its rewards,” Marchi said.
Blumarine’s best-performing markets are the U.S., the U.K. and South Korea and its presence on the digital shelves of premium e-tailers and genuine interest among celebrities and social media personalities is proof the strategy is working, Marchi contended.
Blumarine currently operates two stores in Rome and Forte dei Marmi, Italy. The Rome store will undergo a revamp and reopen next summer with a new concept in line with Brognano’s vision.
Marchi said he was cautious about expanding a retail footprint for the brand, given its “radical aesthetic change.”
The executive characterized his investment in Coin as not only equity ownership but also as an asset for the other brands Eccellenze Italiane controls.
The Italian retailer is at the center of M&A activities, and last June OVS announced it had submitted a letter of intent to all shareholders to take over Coin. An exclusive due diligence kicked off soon thereafter, and its outcome is expected in January 2023, Marchi said.
He sees opportunities for Coin even if the acquisition falls through. “I don’t see independence as necessarily a negative scenario,” Marchi opined.
After the store closures caused by the lockdowns over the past two years, the retailer is now gaining ground again and will open a new door in Milan’s Piazza Cordusio in 2023. Also, it has recently unveiled a new Florence outpost inside central Loggia del Grano.
Separately this week, Coin said it has sold the building in Rome’s San Giovanni neighborhood housing one of its banners in town to the Fondo Torre IV fund, strengthening its financial position.