From Hong Kong Tal Apparel hits Del Vecchio for Brooks Brothers
All the latest news on the Brooks Brothers case
The Del Vecchio family has been accused of having "sabotaged potential offers" for Brooks Brothers, the men's fashion company since 2001 controlled by Claudio Del Vecchio, son of Leonardo Del Vecchio, founder of Luxottica .
The alleged "sabotage" of the Del Vecchio family
The alleged "sabotage" will now force the company to file for bankruptcy and avoid paying tens of millions of dollars to the sole external investor. This was reported by the Financial Times , according to which " the minority shareholder Tal Apparel (a clothing manufacturer that supplies stores in the United States) has sued Claudio Del Vecchio , his son Matteo Del Vecchio and Delfin, the holding company that controls the family's investments in EssilorLuxottica, Mediobanca and Generali ”. As the British newspaper writes, the " sabotaged " offers would have "produced indicative offers at prices below 625 million dollars , but would have brought in hundreds of millions of dollars for shareholders, including Tal".
Who is Tal Apparel
Tal Apparel is a Hong Kong-based clothing manufacturer . One in six formal shirts sold in the US is produced by Tal Apparel. The company is headquartered in the United States and works with some of the largest fashion brands in the world and offers consulting services through its subsidiaries Weave Services Limited, TPC (HK) Limited and Size Stream LLC. The legal process of Tal Apparel.
The legal process
The head of Brooks Brothers is pending a legal proceeding, initiated in a New York court, in which Tal Apparel has asked for damages of over 100 million dollars , "to recover what was owed", as explained a lawyer from Kirkland. & Ellis, who legally represents Tal. "The allegations in question are false and we expect the court to dismiss the case," a person close to Claudio and Matteo Del Vecchio told the financial newspaper. No comment from Delfin instead.
The allegations of Tal Apparel
As reported by the Financial Times, Tal also claims that the Del Vecchio instructed their banker to only explore transactions that would not activate the " make-whole " provision in their shareholders' agreement with the Hong Kong group, did not inform Tal and Brooks Brothers' advice on the sales process. The Del Vacchio family also refused to meet interested buyers to negotiate better deals.
The Chapter 11 request
According to the Financial Times , Tal claims to have invested 100 million dollars in Brooks Brothers in 2016, after receiving assurances from Claudio and Matteo Del Vecchio that he would have his entire investment back if the retailer was sold to a lower figure than the purchase ( 625 million dollars ). Brooks Brothers filed for Chapter 11 , the receivership's consideration, last July due to the fallout from the pandemic. At the time, it was emphasized that Chapter 11 would "facilitate a sales process that maximizes value."
Brooks Brothers: a story that ended badly
"Brooks Brothers is to American tailoring as Coca Cola is to carbonated drinks". Business of fashion magazine writes it . The clothing company was founded in New York in 1818 . Very popular for its formal and sophisticated style, over the decades it has dressed some of the greatest actors of cinema. Her outfits are often prominently featured in the Mad Men series, she was mentioned by Francis Scott Fitzgerald and Bret Easton Ellis, and she has dressed almost every US president, from Abraham Lincoln to Barack Obama. Since 2001 it has been bought by the Del Vecchio family and by 2019 things had started to go wrong.
The crisis before the pandemic
In 2019 Claudio Del Vecchio's company had given a mandate to the PJ Solomon bank to explore several strategic options for the recovery of the company. And among these, the sale of the brand was also contemplated. "Over the past year, Brooks Brothers' board of directors, managers and financial and legal advisors have considered various strategic options for repositioning the company for future success, including a potential sale," said a spokesperson for the company. company to Cnbc , according to reports from the Republic. "In this strategic review, Covid-19 has become immensely destructive and has put a strain on our business," the spokesperson added.
Cyclone Covid-19
Last summer, in an interview with Corriere della Sera , Claudio Del Vecchio said that Brooks Brothers has always been able to adapt its business model to the changing demands of consumers, but the pandemic had "wiped out" the plans of the 'company. “ We were rethinking our concept of retail stores , renegotiating leases, then the pandemic hit,” he concluded.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/da-hong-kong-tal-apparel-picchia-su-del-vecchio-per-brooks-brothers/ on Tue, 18 May 2021 14:02:50 +0000.