Italian menswear house Pal Zileri, for sale

The family owners of Italian suitmaker Pal Zileri (Gruppo Forall) are seeking a buyer for their holding to boost the brand’s international expansion and revive its fortunes. The four family shareholders who own 65 percent of the company are seeking to sell all or most of their holding, ideally to investment funds which already have fashion brands in their portfolio, a source close to the deal told Reuters.

Gruppo Forrall is reported to have accummulated debt of over 50 million euros, in 2012 Pal Zileri reporting sales of 150 million euros and an EBTIDA of 7 million euros. Pal Zileri generates more than 60 percent of its sales in Western Europe, of which 28 percent are in Italy.

The rest of 35% stake in Pal Zileri is owned since 2008 by Cairo-listed Egyptian textile group Arafa Holdings and it is unclear how the company will respond to the sales intention of the majority stake holders.

Pal Zileri has been lagging behind its Italian competitors such as Corneliani, Ermenegildo Zegna and Brioni not only from the point of view of retail exposure but mostly because of a lack of creative direction and a gradual loss of luxury positioning. In several countries around the world, especially emerging markets, Pal Zileri has been under-represented through franchising or exclusive distribution. One of Pal Zileri’s main competitive advantage is its ceremonial line, ideal for festive occasions such as weddings etc.

Pal Zileri store, Kiev Ukraine