Affected by the epidemic, Italian high-end men’s clothing brand Corneliani has recently officially filed for bankruptcy protection.
Corneliani began implementing a business restructuring plan in 2019 to restore the company’s competitiveness. In a statement, the Board of Directors of Corneliani S.r.l. said that the company had to take measures to deal with the emerging difficult situation. Despite the company’s efforts, the COVID-19 pandemic has significantly increased its economic and financial burden. Therefore, the company filed for bankruptcy protection.
Corneliani said that the company was hit by the (epidemic) at a fragile moment of transformation, and believed that filing for bankruptcy protection was the best way to safeguard the strength of its employees and the group.
The company said its management, led by CEO Giorgio Brandazza, is working to evaluate all possible solutions to the crisis.
On the afternoon of June 16, Brandazza met with representatives from trade union organizations such as Filctem Cgil, Femca Cisl, Uiltec Uil and Rsu. Local media “Gazzetta di Mantova” stated that the company had stopped production and operations the day before the meeting. Its major shareholder, private equity fund Investcorp, also proposed to increase its capital stock by 5.5 million euros. But the Corneliani family did not sign as it would have diluted their stake from 48.6% to 13.4%.
From the end of 2019 to the beginning of 2020, the Corneliani family Some members of the group, such as Cristiano, Corrado and Stefano, tried to bring judicial proceedings against Investcorp, blaming the latter for causing the brand crisis, but the result was unsuccessful.
In January, a judge ruled that the allegation was unsubstantiated and unrealistic. Therefore, Investcorp can continue to implement the restart plan it has developed and seek to merge its companies Sarti Holdings with Corneliani.
The restart plan included laying off 140 of the 454 employees at the Mantua plant (a proposal that was later frozen).
According to local sources, tensions at Corneliani have greatly intensified, and doubts about the current status of the company are also growing day by day, such as whether the investment will actually be used to ensure the recovery of production, and the sensitivity after the epidemic. During this period, what strategies will the company implement to balance corporate expansion and protect workers’ rights and interests?
Corneliani was founded in Mantua in 1958 by brothers Carlalberto and Claudio Corneliani. They inherited the legacy of their father, Alfredo Corneliani, one of the pioneers of Italian menswear who began hand-producing rainproof jackets in the 1930s.
Today, Corneliani employs a total of 1,048 employees in offices in Mantua and Milan, overseas branches in China and the United States, overseas production plants and numerous directly operated retail stores. Its global distribution network covers 750 stores in 70 countries and regions, including luxury department stores, multi-brand stores and brand specialty stores.
In 2016, Investcorp, a former major shareholder of Gucci and Tiffany and a private equity investment company from the Middle East, acquired 51.4% of the brand’s shares from the founding family and became the major shareholder of the Corneliani brand.
The new shareholders have brought a lot of new atmosphere to the brand, but they have not been able to effectively promote sales growth. In fiscal year 2017, Corneliani reported annual sales of 111 million euros. </p
