PRIVATE EQUITY FUND STYLE CAPITAL BUYS STAKE IN ITALIAN BRAND MSGM
Style Capital, a private equity fund set up and managed by Style Capital SGR, has signed an investment agreement to acquire a stake in MSGM S.r.l., which owns MSGM, the contemporary Italian brand of apparel, footwear, and bags.
Style Capital will acquire a 32 percent share in the company, while the remaining portion will still be held by the current shareholders of MSGM S.r.l., Manifattura Paoloni (49 percent) and Massimo Giorgetti (19 percent). Massimo Giorgetti will continue to be the artistic and creative director of the brand.
Founded in 2009 by Giorgetti and supported in its development plans by the Paoloni family of industrialists, the MSGM brand has recorded significant and constant growth over time both in Italy and abroad, becoming one of the most successful and desirable brands in the contemporary luxury segment. Today the company produces and sells distinctive and colorful high-end contemporary apparel and accessories for women, men and children under the MSGM brand. The brand has always aimed to stand out and make an impact in terms of product and communication. Its products exclusively made in Italy using innovative materials and featuring innovative shapes, its carefully selected distribution network, and unconventional communication all transmit and clearly express the MSGM philosophy.
MSGM closed 2017 with a total turnover of approximately 50 million euros (with an average annual growth of 15 percent over the past three years) and a gross operating margin of 18 percent. The estimated turnover for womenswear, menswear, and childrenswear in 2018 is expected to exceed 60 million euros, with 26 percent sold in Italy, 35 percent in Asia (China, Korea, and Japan) and the remaining 39 percent in the rest of the world (Europe and USA) through its well-established and diversified international presence.
The current distribution model, with three showrooms in Milan, Paris, and Tokyo, is still mainly directed at the wholesale channel, with around 650 multi-brand clients that include some of the world’s top luxury department stores. The investment operation involves a partial acquisition of shares and a significant increase in capital aimed at supporting its development strategy and further international expansion, with a particular focus on expanding direct retail and developing commercial partnerships.
The 10 existing boutiques (1 in Milan, 1 in Tokyo, 2 in Korea, 2 in Hong Kong, 2 in China, and 2 in the Middle East) will be joined in late 2018 by a flagship store in London and another one in New York. The development plan for the next three years foresees the opening of 30 MSGM boutiques worldwide. On the wholesale front, the current distribution structure is expected to increase, especially in the American market.
MSGM is a company with an excellent international distribution network, which in addition to Europe includes both Asia (China, Korea, and Japan), which is currently the main market of the brand, and America, which has good bases and great untapped potential. Having such a strong identity thanks to its recognizable style, the brand is also focusing on the world of Millennials who seek contemporary luxury that includes product categories such as T-shirts, sweatshirts, denim, and sneakers. The MSGM product is 100% made in Italy: it is colorful and includes a few articles that are extravagant and fun, but never excessive, animated by the energy and engaging positivity of its 40-year-old creative director, who not only has innate talent but is the perfect age to understand the modern woman and also the needs of a younger audience.
“It will be fundamental for the future of the brand to focus on the development of the accessories segment and continuously attract customers, whetting their curiosity, through collaborations and influences also from the worlds of art and music,” said Roberta Benaglia, CEO of Style Capital SGR. “Entering the field to help companies sustain a solid development plan, especially in retail, is one of our special ways to support companies and participate through Private Equity. Through our investment in MSGM, we intend to support the company and its creative director Massimo Giorgetti in pursuing its development strategy, both in terms of strengthening its international presence and creating a single-brand network in the most important international luxury goods markets, not as an alternative but in support of its consolidated wholesale channel.”
“The entry of Style Capital into MSGM represents a decisive turning point in the growth of the company,” added Giorgetti. “I’m extremely pleased with this partnership. It not only means having available capital to invest, but also sharing future development plans with a partner that has always carefully preserved the continuity of its companies, enhanced their strengths and human capital, and added the skills necessary to promote their growth. From the beginning of our negotiations with Style Capital, I understood that not only their specific skills but also their shared vision and their focus on human relations and the promotion of human resources will be fundamental for growing and guiding the MSGM team.”