MILAN — Pal Zileri’s tailored jackets and employees at its Quinto Vicentino plant in Italy have found their white knight, WWD has learned.
After months of negotiations, Nicola Ferraretto, founder of fellow fashion manufacturer J6, together with other investors, has bought out the industrial and manufacturing branch of Forall Confezioni SpA, Pal Zileri’s production and operative arm, through a newco named Manifattura Veneta.
The deal, whose financial details have not been revealed, entails the buyout of Forall Confezioni’s machinery, workforce and manufacturing agreements. It does not include the Pal Zileri brand, which is and remains controlled by Qatari fund Mayhoola, owner of Valentino and Balmain.
Following the deal, Manifattura Veneta will begin operations with a 70-person workforce and a new, 43,055-square-foot production complex located just opposite the storied site in Quinto Vicentino, in the outskirts of Vicenza, where Forall Confezioni operated.
In a joint interview with WWD, Ferraretto, chief executive officer of Manifattura Veneta, and Massimiliano Tintinelli, chief restructuring officer and board member at Forall Confezioni SpA, touted the M&A deal as the result of lengthy negotiations that saw all relevant parties involved, including Mayhoola, trade unions and the Veneto Region.
“The main goals were to ensure continuity for employees and manage the [Pal Zileri] brand more accurately, trying to maintain our manufacturing capabilities and craftspeople in the Veneto region, because Pal Zileri’s manufacturing is ‘Vicentina’ [from Vicenza, Italy], Venetian,” Tintinelli said.
“The most important aspect was maintaining quality, tradition and [presence on] the territory. Our stakeholder [Mayhoola] was very committed to that,” he added.
Several international, mainly financial parties, expressed interest in acquiring Forall Confezioni SpA, but none qualified as much as J6’s Ferraretto, Tintinelli said.
After a few years of stopgap maneuvers — entailing extraordinary wage support measures, employee relocations and reskilling plans — which saw the Veneto Region as well as trade unions contribute to safeguarding the workforce in the interim period, two former Forall employees liaised with Tintinelli and Ferraretto.
Mayhoola’s full support of any potential scenario that would ensure continuity for the plant also contributed to the deal, Tintinelli said.
“Forall was experiencing significant revenue drops, but Mayhoola has always recapitalized the company as it aimed for issues to be fixed and [finally] focus on the brand’s [operations],” the executive said.
In pre-pandemic years, and before Tintinelli’s appointment to his role, Forall also served as a third-party manufacturer for other fashion brands, a business it discontinued amid deteriorating market conditions.
“When I joined, Forall needed restructuring because it was operating at a significant loss. The COVID-19 pandemic further dampened the formalwear sector, as we’ve seen [happening] to other competitors and [sales of formal] jackets hit a roadblock. Today we’re experiencing, so to say, a strong rebound and that’s happening for competitors and for Forall, too, which saw [revenue] upticks in the past couple of years,” Tintinelli explained.
The executive described the road to selling Forall’s assets as a “reengineering of all processes.”
“We had to rewrite processes rather than adapt them because they were outdated and old,” he said.
Out of the 450 workers that as of 2020 were employed at different operational levels, from Pal Zileri-branded stores to manufacturing activities and brand operations, the restructuring relocated around 43 in brand activities, about 60 in retail, in addition to the 70 workers who transitioned to Manifattura Veneta. An additional 30 people were affected by a redundancy plan.
In the workforce, Tintinelli said, were about 10 to 15 percent seasoned employees whose value in preserving the company’s know-how was irreplaceable.
Manifattura Veneta will employ 70 workers at the start, but Ferraretto said he aims to grow that number to 130 to 150 artisans in due time.
The relocation to the new plant was made possible by the support of Mayhoola, Tintinelli said, highlighting how unlikely such a move would have been if the stakeholder was not really committed to the brand.
Ferraretto has been helming the J6 fashion manufacturer for 13 years and has primarily worked with up-and-coming and cutting-edge designers. “I was not much interested in the Pal Zileri brand, its name would hardly trigger any interest. That was until I visited the former Forall plant. I was mesmerized, that’s when everything began,” he said.
“Our long-term ambition, right from the start, was to acquire and revitalize this excellent production asset, becoming a strategic partner to them and [together] becoming one of the most important hubs in Italy for canvassed and half-canvassed clothing, as well as [set foot] in womenswear, courting the luxury sector for the production of jackets and pants,” he added.
He plans to resume the third-party manufacturing activity and add a made-to-measure service, banking on the assets he believes Forall never entirely lost, such as flexibility, speed and modernity.
“I think…brands need Pal Zileri’s [manufacturing expertise]. It’s an ambitious project, it’s not just about offering a second chance to some employees somewhere in the Italian province, it’s a long-term project and vision,” Ferraretto said.
Manifattura Veneta will remain fully independent from J6 and was established by Ferraretto in tandem with two other investors, Claudia Giacomelli and Luca Trevisiol.
The two former Forall employees who played a pivotal role in liaising Ferraretto with Tintinelli, Patrizia Mastromauro and Alessandro Baraldo, will also retain a minority interest in Manifattura Veneta while holding managerial roles at the company.
“There’s great energy.…There’s a sense of release for employees because this is their life, it’s a home to them. It will bring benefits to all involved parties,” Ferraretto said.