A Tuscan equity investment fund has acquired a minority stake in the Florentine company, known in the sporting goods sector for its golf, ski and sailing clothing, through a €5 million equity increase intended to help finance its expansion in Europe and the rest of the world, partly through joint ventures. The targets include big emerging markets such as China, Brazil and Russia.
The family of Romano Boretti, the 71-year-old entrepreneur who set up Conte of Florence as a retailer of hats in the 1950s and still acts as its chairman and chief executive, has injected €2 million into the company, which remains under its control. The equity fund, one of three that are managed by Sviluppo Imprese Centro Italia (SICI), has put in an additional €3 million. Several local banks have holdings in SICI, which has invested total savings of €135 million in private equity and venture capital transactions.
Conte of Florence estimates that its revenues grew by 7 percent to €41.5 million in 2008, thanks in part to a very good winter selling season so far. It could not be determined whether this figure includes the sales at its own stores, which are run by a separate family company. Headwear and accessories represent only about 15 percent of the total turnover. The Italian market makes up less than 25 percent of the company’s wholesale revenues.
Between 40 percent and 45 percent of the company’s sales go through a big chain of 96 single-brand stores, of which five are directly owned and 20 others are joint ventures. The others are all franchises and their number should grow in the future. Only five of the stores are located outside Italy for the moment. In addition, the company operates 11 directly owned factory outlets. The company has three stores in Florence, including its famous flagship near Ponte Vecchio and a store at the airport. The flagship and related offices occupy all the seven floors of an ancient palazzo that the company owns.
In connection with an upgrading of the brand, Conte of Florence is preparing the launch of a new store concept and of a major new store franchising program, with attractive conditions for its retail partners.
The equity increase at Conte of Florence coincides with a similar transaction being concluded for the other major Italian golf company, Chervò, which recently went under new management. The entry of a new equity fund was expected to be completed at the end of 2008 but has been pushed back to the middle of February, apparently because of technicalities (more on these two companies and others in a big report on the golf apparel and footwear market in Southern Europe that we plan to put out before the end of this month).