Etro's Founding Family Divests Shares as RAMS Global and Others Enter

Italian fashion brand Etro embarks on a new journey as the founding family divests its remaining minority stake. New investors have come on board, highlighted by Turkey’s RAMS Global, while L Catterton, an equity firm affiliated with the French luxury titan LVMH, retains majority ownership.

Established by Gimmo Etro in 1968 and famed for its iconic paisley motifs, Etro has faced financial headwinds in recent years. The brand posted a net loss of 23 million euros last year, with revenues dipping to 245 million euros, down from 261 million euros. L Catterton first acquired 60% of Etro four years ago, gradually increasing its share thereafter.

The new investor group also includes Italian fashion entity Swinger International and private equity firm RSI. Together, they acquired the stake from the Etro family and contributed to a capital increase that slightly lowers L Catterton's stake to between 51% and 55% from approximately 65%. While the exact financial details remain undisclosed, estimates suggest that the total transaction and capital increase amount to about 70 million euros ($82 million).

In this revamped ownership structure, Chief Executive Fabrizio Cardinali will continue leading daily operations, with Faruk Bülbül from RAMS Global stepping in as chairman of the board. Etro has reiterated that L Catterton will maintain its active support for the brand’s long-term growth strategies.

This development follows a search for new investors initiated in 2024 when Rothschild was enlisted to identify potential partners for Etro. The objective was to secure investors capable of stabilizing the brand, ensuring worldwide expansion, and facilitating a creative and commercial revival.

The founding family's exit represents an important transition for Etro, moving the brand deeper into the realm of global investment. Despite recent profitability struggles, the entry of fresh investors alongside the backing of L Catterton underlines a commitment to rejuvenate the brand and bolster its position in the luxury fashion landscape.

With RAMS Global now taking a key role on the board, analysts predict that Etro will focus on amplifying its international footprint and exploring new creative partnerships. Known for its vivid patterns and innovative textiles, the fashion house aspires to merge its rich history with strategic insights from its new global stakeholders.

This shift highlights the increasing trend of luxury fashion labels seeking international investor partnerships to harmonize their creative essence with solid financial grounding. For Etro, the ultimate challenge will be to preserve its distinctive style while adapting to an evolving global marketplace marked by shifting consumer tastes and escalating competition.