Roberto Cavalli Closes All Stores In The United States And Enters Bankruptcy Liquidation Process

On Monday, Italy's luxury brand Roberto Cavalli, the US subsidiary, has entered the bankruptcy liquidation process, and all its Roberto Cavalli American stores have been closed, according to the women's wear daily.

Less than a day ago, the brand announced that it was seeking new agreements with creditors to avoid bankruptcy.

Less than a week ago, Paul Surridge, the company's former creative director, has just left.

Last Friday, Roberto Cavalli announced in a mail that the company is preparing to submit a plan to the Italy court, which will ensure that Cavalli group can continue its normal operation when seeking new investors or buyers.

At present, Roberto Cavalli group's largest investor is Italy private equity fund Clessidra.

In 2015, the fund purchased shares of Roberto Cavalli90% for about $43 billion, "because at least theoretically, the company has huge (profitable) opportunities".

But recently, due to the long-term loss of Roberto Cavalli, rumors about the fund's reduction of Cavalli group share are rumoured. Clessidra is reportedly discussing the possibility of pferring shares with Italy fashion group OTB, German fashion designer Roberto Cavalli and American investment company Bluestar Alliance.

The women's Wear Daily quoted a source as saying that the intention of the US investment fund to make a deal is most clear.

But in the past weekend, who will become the Roberto Cavalli group's receiver, there is no clear message that the group's US subsidiary has gone through a wave of turmoil.

On Monday, security personnel entered the seven full product line stores in the United States and five outlets outlets, instructing the staff to leave.

A total of 93 American team members were told last Friday to terminate the labor contract.

With this series of changes, many executives of Roberto Cavalli, President of Salvatore Tramuto, have formally resigned.

A spokesman for Cavalli said on Monday that before April 4th, the Roberto Cavalli North American subsidiary, Art Fashion Corporation, will be liquidated in accordance with the seventh chapter of the US bankruptcy law in order to cooperate with the restructuring of the company's headquarters.

At the same time, Roberto Cavalli's business in the US will also be suspended until European companies undertake logistics in North America.

On the same day, nearly 200 employees of Roberto Cavalli gathered and marched outside the factory near Florentine, Italy, asking Cavalli group to give a statement to the future of the company.

Earlier in April 21st, Paul Surridge, the former chief creative director of Roberto Cavalli, confirmed her resignation in the personal account of foreign social media Instgram.

Surridge said he now wishes to focus on other projects that he had shelved before the development of Roberto Cavalli brand.

Roberto Cavalli confirmed in foreign social media that she resigned as chief creative director of Roberto Cavalli.

According to an earlier report by the women's wear daily, a person familiar with the matter claimed that Surridge had been considering leaving for several months. On the one hand, the company did not have sufficient funds to develop and renovate the store network of Roberto Cavalli, and to promote and spread the market. On the other hand, he did not get enough support from the whole internal design team.

Roberto Cavalli is a luxury brand in Italy, headquartered in Florence, famous for its wild leopard print, zebra and other animal designs.

Over the years, the company has suffered from internal and external troubles. On the one hand, the loss of customers is serious. It has been beset by declining sales. On the other hand, it has been squeezed by competitors in the global market, and other luxury goods groups have a stronger sense of presence in the world.

In order to turn losses into profits, Roberto Cavalli has intensified reforms in recent years to change the weak situation in the global market.

In 2016, the company appointed Gian Giacomo Ferraris as the new global chief executive officer.

Ferraris is a reformist. After joining the Roberto Cavalli, it carried out drastic reforms, and made great adjustments from personnel adjustment to global strategic layout and brand direction.

In 2017, he invited Paul Surridge to become the creative director of Roberto Cavalli, leading the adjustment of the Cavalli's product line, with a view to returning the brand strategy center to the three main product lines of the company (namely, the Roberto Cavalli, the main high-end luxury fashion, the Class Cavalli of contemporary fashion and the Just Cavalli of the young group), and at the same time, to expand the women's clothing market.

Roberto Cavalli used to focus only on the European and American markets for a long time.

The European market has been the largest market of the group, and the market share of the US single market is not to be underestimated. It once reached 30% of the group's total revenue.

But some European stores are in a state of loss for a long time.

In order to reduce the huge expenses caused by integrating product lines and accelerating global market expansion, Ferraris has cut down many European deficit stores on its one hand and plans to accelerate expansion in North America and Asia.

The first step is to open shops in famous international metropolis, including New York and Beijing.

But in 2017 it began to focus on the Asian market, especially in the Chinese market. It was a bit late for Roberto Cavalli, and its competitors such as the opening group and LVMH entered Asia just over 20 years ago.

For missing the golden age of luxury brands that are very close to the Chinese market, Ferraris once said to the interface that they were not forgotten.

In the past 40 years, Cavalli group has been actively exploring the boundaries of lifestyle brands.

In collaboration with authorized dealers, they sold sunglasses, perfume, chocolate and wine, and also opened hotels and cafes.

However, these authorized cooperation modes do not bring enough profits to the group, instead, they create risks for luxury brands to control quality and dilute the value of main brands.

Now, the US market does not bring good luck to Cavalli group as Ferraris expects.

In the past five years, the art fashion group has been in a state of loss. In 2018, it is expected to cause nearly $1 billion 780 million loss to Cavalli group, which does not include the company's additional investment of $1 billion 300 million in marketing.