L Catterton, the private equity fund co-founded by luxury conglomerate LVMH, is taking further steps to support the revival of Italian luxury brand Etro. Following its majority stake acquisition in the historic fashion house in 2021, L Catterton has announced a capital increase of €15 million through a recapitalization.
This development, first reported by Milanese daily MF Fashion and later confirmed by Etro, is part of the brand’s overall revival project initiated in December 2021. The goal of the project is to facilitate significant investments and drive Etro’s resurgence in the luxury market.
Led by CEO Fabrizio Cardinali, Etro has undergone significant transformation over the past two years. With L Catterton holding a 60% stake and the Etro family holding 40%, the brand has implemented a range of changes, such as process reengineering, strategic repositioning, and a new aesthetic direction led by Creative Director Marco De Vincenzo. The company has also focused on refining its product offerings, enhancing brand image, expanding digital engagement, and improving supply chains and distribution networks.
Around a year ago, Cardinali set an ambitious target of achieving €500 million in revenue within the next five years. While substantial progress has been made, there is still a long way to go. According to Etro’s figures, the brand’s turnover in 2022 increased by 17% compared to the previous year, reaching €277 million. The most notable achievement was the brand’s operational profit, the first since the COVID-19 pandemic. Additionally, earnings before interest, taxes, depreciation, and amortization (EBITDA) showed positive growth, with a €9 million increase compared to 2021 and a €25 million surge compared to 2020.
However, Etro did report a significant loss of €23.6 million in 2022, primarily due to amortization and extraordinary expenses. Despite this, the brand highlighted the clear improvement compared to the previous fiscal year.
With the support of L Catterton’s recapitalization, Etro remains hopeful that it can continue on its upward trajectory and achieve its ambitious revenue target. The injection of fresh financial resources will enable the brand to invest in further growth opportunities and strengthen its position in the luxury market.
For more information on L Catterton’s investment in Etro, click here.
To learn more about Etro’s revival project and future plans, visit here.
