Etro's Founding Family Steps Down as New Investors Enter, Including RAMS Global

The Italian fashion brand Etro is turning a new page as its founding family relinquishes its remaining minority stake. This transition introduces new investors such as Turkey's RAMS Global, while L Catterton, a private equity powerhouse backed by LVMH, keeps its majority interest.

Established in 1968 by Gimmo Etro and famous for its iconic paisley patterns, the brand has encountered financial headwinds recently. Etro reported a net loss of 23 million euros last year, with revenue decreasing from 261 million euros to 245 million euros. L Catterton originally acquired a 60% stake in the fashion house four years ago and has gradually expanded its investment.

The new investment group also incorporates Italian fashion entity Swinger International and the private equity firm RSI. Besides acquiring the stake from the Etro family, they engaged in a capital infusion that will reduce L Catterton's ownership from approximately 65% to between 51% and 55%. Estimates from sources close to the negotiations suggest that the total investment and capital increase amounts to around 70 million euros ($82 million), although the company has not officially released specific financial figures.

Under the adjusted ownership dynamics, Fabrizio Cardinali will continue to oversee daily operations as Chief Executive, while Faruk Bülbül, representing RAMS Global, will take on the role of board chairman. Etro is keen to assure that L Catterton remains a vital partner in fostering the brand's long-term growth strategy.

This deal emerges from a search for investors initiated in 2024, with Rothschild tasked to find fresh partners for Etro. The goal was to attract investors capable of stabilizing the brand, enhancing its international footprint, and supporting its creative and commercial revival.

The departure of the founding family signifies a pivotal moment for Etro as it transitions towards a globally-driven investment model. Despite struggling with profitability in recent times, the entrance of new stakeholders, alongside continued support from L Catterton, underscores a commitment to rejuvenate the brand and secure its place in the competitive luxury fashion arena.

With RAMS Global taking a prominent position on the board, industry experts anticipate that Etro will aim for increased international growth and possibly new creative partnerships. The fashion house, known for its striking patterns and innovative fabrics, now looks to blend its legacy with strategic direction from its global investors.

This development accentuates the growing trend of luxury fashion firms seeking international investment to balance creative vitality with financial sustainability. For Etro, the key challenge lies in upholding its distinctive brand identity while adapting to a shifting global marketplace characterized by changing consumer tastes and intensifying competition.