Group of Italian Investors Eyeing Brooks Brothers

Emilee Geist

Click here to read the full article. MILAN — “It’s a David and Goliath story.” Entrepreneur Luciano Donatelli is aware that giant groups are interested in taking control of Brooks Brothers, but he is undeterred. Donatelli has quickly put together a group of investors under the Club Deal 8 moniker, […]

Click here to read the full article.

MILAN “It’s a David and Goliath story.”

Entrepreneur Luciano Donatelli is aware that giant groups are interested in taking control of Brooks Brothers, but he is undeterred. Donatelli has quickly put together a group of investors under the Club Deal 8 moniker, including online retailer Giglio Group, the Biella-based Gruppo Verzoletto, and a silk group from Como that has requested anonymity for the time being.

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Partnering with Giglio Group is telling, since developing a bigger online business for Brooks Brothers is a key focus for the investors.

Another is “to make sure the storied American company is not butchered into smaller companies by funds that could speculate on this deal. We are talking about a unique brand,” underscored Donatelli, who has involved in the project entrepreneur and environmentalist Brando Crespi, founder of Pro-Natura, which supports and funds sustainable projects; legal manager Lorenza Morello, and adviser Fabrizio Capponi, a partner at New York-based legal firm Dentons.

“We have had requests from 32 international investors that are keen to be part of Club Deal 8, but we will eventually select seven or eight of them,” said Donatelli, adding that the investors are already in Brooks Brothers’ data room.

As reported, Brooks Brothers earlier this month struck an upbeat note at its first-day bankruptcy hearing in Delaware, submitting a new $80 million debtor-in-possession facility by a joint entity of licensing company Authentic Brands Group and mall operator Simon Property Group, showing how the retailer may be gearing up for a possible going-concern sale.

When the retailer began its proceedings in Delaware, its owner and chief executive officer Claudio Del Vecchio told WWD that although the company had entered the proceedings without a stalking-horse bidder despite exploring a sale of the business for years, it hopes for a relatively quick trip through bankruptcy court that would culminate in a sale.

“The mission is to relaunch a brand that does not belong to us historically but that has always been in the heart of Italians, bought by an Italian family that I deeply respect,” said Donatelli of owner and ceo Claudio Del Vecchio and his father Leonardo, who founded Luxottica Group. “We are trying to protect this Italian image and at the same time integrate Brooks Brothers’ international supply chain as well as the American production.”

Donatelli said the online business was a strong trend even before the COVID-19 emergency and one that can fit with the centuries-old classic men’s wear retailer, supporting  “a slimmer distribution model, stores no bigger than 2,160 square feet, with few fixed costs, fewer employees and general expenses. I think that structures such as that of Giglio Group can grow Brooks Brothers at an incredible pace and it will help the brand develop its accessories, shoes, knits, shirts and leather goods business, as well as the women’s and children’s divisions,” continued Donatelli.

Donatelli, a fashion consultant and a former Ermenegildo Zegna group manager, over the years initiated prestigious licenses with brands such as Gucci and Valentino and was president of industry associations Confindustria Biella and vice president of Confindustria Piemonte. His experience in the Biella textile region can serve him well, as Brooks Brothers has for years sourced fabrics from that area, as well as from Italy’s Veneto, Tuscany and Apulia regions.

The goal, said Donatelli, if Club Deal 8 succeeds in taking control of Brooks Brothers, is to reach sales of $3 billion in five years and grow production sixfold. Donatelli sees sales of about $1.2 billion to be derived from the Americas; $1.2 billion from the Far East and $600,000 from Europe and Russia.

“I am thinking of the Jeep example, which bridges Italian craft with the American myth,” he mused. “This can be a new renaissance for Brooks Brothers,” he mused.

He aims to keep the brand’s American spirit, but to also produce more “glocal” collections, adapting the label to different regional areas, highlighting a couture division in the U.S. to be produced in the Boston and North Carolina plants. He cited Halston and Ralph Lauren as two models for the brand.

“My dream is to work with Murray Scallon on upper casual, Paul Surridge on couture and Nick Invernizzi on accessories,” confided Donatelli, who is also keen on expanding the women’s division. Polos, shirts and accessories should eventually account for 75 percent of revenues, he said, and the leather goods and shoes categories should also grow, as well as the licenses.

Sustainability — hence the inclusion of Crespi — and boosting business in China are also priorities.

Last year, as reported, Giglio Group turned its attention to China, boosting its e-commerce business and inking 12 new agreements with Italian designer brands.

It already worked with the likes of Guess, Max Mara, Bomberg, Trussardi and Chiara Ferragni’s The Blonde Salad. The group has been evolving from being a media company to presenting itself as a “Worldwide Digital Enabler” for its more than 70 fashion, beauty and design clients in the luxury arena. The company is led by Alessandro Giglio, founder, president and ceo. Established in 2003 with headquarters in Milan and offices in New York, Shanghai, Hong Kong, Rome, Lugano and Genoa, Giglio Group is listed on the Milan Stock Exchange on the STAR market.

“I chose the Club Deal 8 name because I believe, like in China, eight is a good luck number. I really hope so,” said Donatelli,

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