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The pandemic years were good for luxury fashion e-tailer LuisaViaRoma. Business boomed and in 2021 they sold a 40 percent stake in the company to private equity firm Style Capital for $152 million USD.
Fast forward a few years and the luxury fashion market (not to mention the world at large) is a very different place and LuisaViaRoma is struggling. Big time! So much so that on Tuesday, the company filed for a court-mediated procedure called “Concordato Semplificato” under Italian liquidation law. According to WWD, the company has now asked for 60 days to provide the Florence Court with a business plan and procedures to resolve their current financial crisis. It’s then up to the court to ratify their plan or place them into judicial liquidation — a legal, involuntary process where a court appoints a liquidator to close an insolvent company, sell its assets, and distribute the proceeds to creditors.
Katy Perry performing at the LuisaViaRoma for Unicef gala in 2021 (Getty Images)
Meanwhile, local trade union Filcams Cgil is raising the alarm and encouraging LuisaViaRoma’s employees to stage a four-hour strike and demonstration outside the retailer’s Florence flagship in protest of the proceedings, which they suspect are part of a larger plan to disenfranchise workers for the benefit of a handful creditors and individuals in upper management. In a statement to WWD, the union said, “learning that LuisaViaRoma intends to pursue discontinuity through corporate restructuring leaves us speechless. Surely, the workers currently employed, who, despite the existing ‘Solidarity Contract,’ had hoped for an industrial solution to prevail, will feel the same. Today, we are faced with discontinuity through a liquidation arrangement.
“We firmly believe that the expertise of the workers could tackle the current challenges. However, unfortunately, what we warned about long ago is eventually happening: Pure profit for a few is leaving hundreds of employees at the mercy of events; finance takes precedence over expertise, but this is a reality we refuse to accept.”
The liquidation threat comes just a few short months after Style Capital sold their stake in LuisaViaRoma to current CEO Tommaso Maria Andorlini for an undisclosed sum. At the time of the transaction, Andorlini told WWD that his investment was “driven by having a clear vision of where LuisaViaRoma needs to go, as well as a strong understanding of where the market, as a whole, but especially the multibrand fashion market, is heading.”
He also spoke of the desire to “implement a long-term industrial plan, free of the short-term cash-out pressures of financial vehicles.”
If LuisaViaRoma is liquidated, the proceeds from the sale will go to paying off their creditors — largest to smallest. Depending on the terms of Androlini’s deal with Style Capital, that could put him high on the list of future payees. Maybe not. At this point it’s impossible to say. But one thing is for sure, whatever happens it’s the workers of LuisaViaRoma who are going to suffer.
You can view the original article HERE.
