L Catterton (LVMH) adds 15 million euro in Etro’s capital. The capital injection was made necessary after the losses recorded in 2022: 23.6 million euro out of 282 million of revenue. The decision was also forced by the decision to merge it with Nuova Publitex. From the documents, there appears to be a misalignment between the visions of L Catterton (majority shareholder) and the minority shareholder, the Etro family.
L Catterton (LVMH) injects capital in Etro
An ad-hoc shareholder meeting took the decision to inject funds. The company current has a 40 million euro balance sheet, 24 of which L Catterton’s, through Sl 11, while the remaining 16 are owned by Gefin, owned by the Etro family. According to what written by Milano Finanza, the CEO of the brand, Fabrizio Cardinali, told shareholders that in September, while facing limited growth, the brand had decided to begin a project. The objective: conducting a series of initiatives to support a sustainable profitability level and satisfactory cashflow. This choice was caused by the losses of 2022 and the investment to merge with Nuova Publitex.
A lot to understand
The ad-hoc meeting decided to inject 15 million euro in the brand. Always according to Milano Finanza, if the Etro Family does not pay the sum owed by the end of the year, L Catterton will cover it. This likely means the Etro family disagrees with the decision. The scenario will likely evolve based on the company’s performances, given shareholders already know how the company is performing throughout 2023. L Catterton appears to find itself managing a situation it hadn’t planned for when, in 2021, took over the brand.
Images from etro.com
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