Italian private equity group Quadrivio has bought French womenswear label Sessùn through Made in Italy Fund II, an investment fund owned by the group. It is the first direct operation in the fashion sector outside Italy made by Quadrivio. Alessandro Binello, Quadrivio’s co-founder and CEO, has disclosed to FashionNetwork.com the deal’s details, and outlined the group’s plans for the French market, where it is about to open a subsidiary.

FashionNetwork.com: Why did Quadrivio invest in Sessùn?

Alessandro Binello: It’s our first direct operation in the fashion sector outside Italy. And our first major acquisition deal in France, a market we regard as highly important. It’s a significant investment in the affordable luxury segment, and it’s consistent with our strategy. Sessùn is a leader in its segment and has a strong retail footprint in France and abroad. It’s already present in several European countries. For us, controlling retail distribution is very important. [Sessùn] is in excellent health. It has the potential to become a global brand. It must reach another level in terms of company size, and accelerate internationally. With our network, we can surely help [Sessùn] reach a new milestone.

FNW: What size stake did you buy?

AB: We always aim to acquire a majority stake. The stake we bought in Sessùn is approximately 70%. The label’s founder and designer, Emma François-Grasset, remains a shareholder, with a stake of about 30%. The management team is solid, we will continue working with them.

FNW: How much did you invest in Sessùn?

AB: It was a significant investment for us, in line with the valuation of the company, whose EBITDA is in excess of €10 million.

FNW: Why did you decide to invest in France?

AB: France is a strategic country for us. Philippe Franchet, notably the co-founder of L Capital, the financial powerhouse of LVMH and the Arnault family, joined our team two years ago. And we will shortly open an office in Paris, in the 1st arrondissement, near Place Vendôme. We aim to invest heavily in France. France and Italy are our priority markets. They are world leaders in fashion, and have the largest market shares in the affordable luxury segment. Besides, there isn’t much competition for us, because there are few [private equity firms] operating on these markets. So there are big opportunities.

FNW: Are you planning to make more acquisitions in France?

AB: Yes! At least two more, one in fashion, and one in cosmetics and perfumes.

FNW: Which kind of companies are you targeting?

AB: We look for brands that are market leaders in their segment, and have a unique market positioning. Like Sessùn, for example. An original label, with a rather ethnic style, leader in the boho-chic segment. We’re interested in brands that have a strong distribution network and need to improve their communication. They must be brands with an international potential, brands that can be universally appreciated and can have a broad appeal.

FNW: Which company size are you chiefly aiming for?

AB: The ideal brands for us generate a revenue between €50 million and €100 million. If they are fast-growing companies, we can set our sights lower, down to a revenue of €30 million. In the case of Autry, we bought it when revenue was €7 million. Two years later, it had reached €40 million. But it’s a very rare case.

FNW: In 2018, Quadrivio launched the Made in Italy investment fund with Pambianco. What progress have you made?

AB: The fund was set up to invest chiefly in top-notch Italian SMEs in the lifestyle sector, specifically fashion, food, beauty and design. In five years, we’ve acquired a dozen companies and raised €300 million. We’ve started disinvesting this year, selling off sneakers brands Ghoud and Autry.

FNW: Which brands will you be putting up for sale next?

AB: Brands that are surely ready to be sold are design company Mohd and high-end denim label Dondup, as well as trousers specialist PT Torino, which belongs to the same group. Together, Dondup and PT Torino generate a revenue of €100 million with EBITDA at €25 million, a remarkable result. Other brands have almost reached maturity.

FNW: Made in Italy Fund also owns luxury streetwear label GCDS, which shows in Milan. What’s its status?

AB: Initially, it was positioned as an upmarket label. But the management wanted to reach too high a level, something that wasn’t consistent with its brand identity. It wasn’t the right positioning. We’ve since repositioned it in the contemporary designer segment. Consumers are keen about a fresh new label like this. We’re quite happy. GCDS is doing well, especially in China. But it isn’t ready to be sold yet, we must work on it for another year or two.

FNW: Sessùn was bought by Made in Italy Fund II, can you give us more details?

AB: It’s a new investment fund that was launched in 2023, aiming to raise €500 million in capital. Its portfolio includes Autry, in which we’ve kept a small stake, Sessùn, and affordable luxury knitwear label Filippo De Laurentiis, in which we’ve bought a 51% stake. It’s little-known but highly promising. We’re planning to make another seven acquisitions in the next year and a half. We’re overwhelmed with requests, because investors are few and far between. We’re regarded as experts in fast-growing new brands. Our staff has been working in the fashion market for 40 years, we know all the distributors, retailers and labels.

FNW: Who are your investors?

AB: The majority, 80% of them, are institutional investors: major sovereign funds, banks, insurance companies and pension funds. Most of them, 70%, are Italian, and 30% from abroad, many of them from France. Family offices account for the remaining 20%, and their share has been growing in recent years. We have a staff of 60. Our headquarters are in Luxembourg, and our investment funds are Luxembourg-registered. We have seven other offices worldwide, in Milan, London, Hong Kong, and soon Paris. In the USA, we’re present in New York, Miami and Los Angeles. Our fashion industry investments have yielded returns of 20% per year, and we’ve invested over €300 million.

FNW: How do you see the luxury market evolving?

AB: Generally speaking, investments in intangible assets like fashion labels generate high returns and good margins. One of the most recent examples is sneakers brand Autry, which we bought in 2021 for €60 million and have sold this year for over €300 million. It’s possible to make very good business in this industry.

FNW: Even now, when the luxury sector is clearly slowing down?

AB: The companies we set out to buy are growing strongly despite widespread market uncertainty. It’s true that the market situation in general is quite complex, but it’s a cyclical thing, we don’t expect it to last for more than two years. It’s understandable that, given the ongoing economic crisis, people are cutting down on expenditure, especially in consumer goods. Having said this, brands that are appreciated by the public keep on growing. As shown by Autry, Prada, which grew 17% in H1, and Sessùn, up by 15% this year.

FNW: Aren’t we witnessing a more structural transformation in luxury goods consumption?

AB: I don’t think so. People always want the same things. But now they have less money. Previously, consumers used to resort more to credit. Undoubtedly, they now prefer to invest in travelling than in clothes. This is also due to the steep rise in prices, which have mostly tripled. That’s actually the problem. It isn’t the consumer’s fault. [Consumption] in all segments is slowing down, including in the extreme luxury one. Affordable luxury has been impacted more. But it does really depend on the label.