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Poltrona Frau is only latest Italian icon to go foreign

US giant Haworth buys majority stake in deluxe furniture maker

11 February, 15:58
Poltrona Frau is only latest Italian icon to go foreign (By Elisa Cecchi) (ANSA) - Rome, February 11 - United States-based firm Haworth has bought a majority stake in Italian luxury furniture maker Poltrona Frau, making it the latest in a string of Italian icons to be snapped up by a foreign buyer.

Office furniture group Haworth, fully owned by the Haworth family and based in Michigan, last week agreed to pay 2.96 euros per share for a majority stake in the company founded in 1912 by Renzo Frau in Turin.

Charme Investments, Ferrari Chairman Luca Cordero di Montezemolo's holding company, and Moschini S.r.L., announced they would sell their shares - together totaling about 58% of the whole company - to the furniture giant.

The US company will launch a mandatory takeover offer for remaining shares at the same price at a later date and delist the firm from the Milan stock exchange.

The value of the acquisition has not been announced yet though it has been estimated at around 243 million euros, making Italian luxury company worth about 415 million euros.

The deal also reportedly involved the 1.9 million purchase of factories in Meda, in the northern Lombardy region, that supply Frau.

The operation must be approved by antitrust authorities before it is completed by the end of April.

Poltrona Frau, which produces furnishings for home, office as well as automobile interiors and is today based in Tolentino, a city in eastern Italy's Marche region.

It is known worldwide for its supreme craftsmanship and iconic armchair designs including the 1930 'Vanity Fair' and the 'Dezza' designed by Gio Ponti in 1963.

Charme acquired its stakes in Poltrona Frau in 2003 and went on to buy independent, iconic luxury brands such as Cassina and Cappellini, known for having launched top designers such as Tom Dixon, Jasper Morrison and Marc Newson, before listing the group on the Milan stock exchange three years later.

Founded in 1948, Haworth today employs 6,000 workers and has had an Italian CEO, Franco Bianchi, at its helm for the past eight years.

Already a distributor of Poltrona Frau in North America, the group registered revenues of 1.4 billion dollars in 2013.

Poltrona Frau made 247 million euros in 2012 and 192 million in the first nine months of 2013.

The exit of Charme - which owns a 51.3% stake in Poltrona Frau while partner Moschini has 7.3% - was announced just a day after the holding company said it was selling its stakes in Octo Telematics, which develops telematics applications for the insurance and automotive markets, to Russian group Renova.

Italy's luxury labels have been increasingly attracting foreign buyers, particularly in fashion, a sign of resilience of its brand names as the country is struggling to emerge from the longest and deepest recession in over two decades.

Three bidders reportedly have their sight on a minority stake in fashion house Versace.

And the list of Italian clothing and accessories brands now controlled by foreign luxury groups, especially from across the Alps, is lengthy.

Rome-based fashion house Fendi, known for its superb fur and leather goods, is today controlled by French luxury-goods giant Louis Vuitton Mot Hennessy (LVMH).

Indeed the group has been tightening its grip on Italian brand names with a cache of new acquisitions including, in June, family-owned pastry shop Cova, a Milan institution that featured in Ernest Hemingway's A Farewell to Arms.

In July, it bought 80% of another Italian brand name, Loro Piana, a family-owned cashmere company.

Less recently, the group snapped up jeweller Bulgari and Florentine fashion house Pucci.

Meanwhile its French rival Kering, formerly known as PPR, owner of luxury houses Gucci, Bottega Veneta, Sergio Rossi and high-end tailor Brioni, bought a majority stake in jewelry group Pomellato in April and acquired porcelain company Richard Ginori, a Florentine institution, out of bankruptcy in May.

Not all Italian luxury brands however have been crossing the Alps.

In 2012, the Qatar royal family, through Mayhoola for Investments Spc, bought Italian fashion royalty, the Valentino Fashion Group, for an estimated 600-750 million euros, though the official price was not made public.

The Qatari royals already own 1% of LVMH as well as the Harrods high-end department store, parts of Porsche and Barclays. And VFG was not the first Italian fashion house to go East.

French-Italian luxury brand Cerruti was acquired by Hong Kong's Trinity Ltd. in 2010. The Gianfranco Ferre' brand was bought by Dubai's Paris Group a year later.

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