Reuters
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Agnelli heir Lapo Elkann takes design firm along investor route
Mon, Jan 14 10:34 AM EST

By Antonella Ciancio

MILAN, Jan 14 (Reuters) - Flamboyant Italian celebrity Lapo Elkann, a member of Fiat's Agnelli dynasty, is considering linking up with financial investors to propel his design group Italia Independent towards further growth.

The 35-year-old, known in Italy for his dedication to Agnelli-owned soccer club Juventus and his stable of luxury sports cars, told Reuters he was thinking about an initial share offering or a private sale this year.

"In the past I considered finance as a cynical business, distant from reality, arrogant towards entrepreneurs," he said, wearing a pinstriped suit, white shirt and a black tie.

Though part of Italy's powerful family of industrial tycoons, Lapo Elkann cuts a very different figure from his reserved brother John, who took over Fiat's presidency in 2010.

"My brother is an expert in this field but I hope finance will occupy a larger part of my life in the future," said Elkann, who owns a stake in Fiat along with his siblings through family holding Exor.

Elkann set up his design group in 2007 with old-time friends, now chief executive Andrea Tessitore and general director Giovanni Accongiagioco. The group includes a sunglasses firm of the same name, and also teams up with manufacturers to create limited series objects such as denim-clad fridges and Fiat 500-shaped chairs.

The design firm is targeting revenues of 18 million euros in 2013, a six-fold increase from 2010.

As part of its reorganisation plan into a group that manages design, fashion, accessories and communication - it includes an advertising company Independent Ideas - Italia Independent could also buy brands in those sectors in the future, he said, though did not give further details.

Italia Independent also plans to gradually increase its presence in foreign markets while reducing its exposure to Italy, which currently accounts for half of sales.

"We aim to get to 50 million euros of revenues in the next few years," Elkann said.

LIMITED LENDING

Family-owned small and mid-sized businesses - the backbone of Italy's economy - are suffering from limited access to credit amid the worst euro zone debt crisis in decades but many are reluctant to sell because of fears of losing control.

Italian banks' loans to businesses in November declined at the fastest pace since records began in 2001 while bad debts rose to nearly 122 billion euros, Bank of Italy data showed on Jan. 10.

New-York born Elkann, a globe-trotter who speaks five languages while promoting Italian style, said he hoped other domestic firms would follow his example and seek financial investors.

"The banking system is not helping Italian firms," he said.

The decline in lending to Italian firms is exacerbating a credit crunch in the euro zone's third largest economy, which has been mired in a recession since 2011.

Elkann is considering listing Italia Independent on the Alternative Investment Market (AIM), the London Stock Exchange's platform for small, growing companies. LSE also owns the Milan stock exchange.

Methorios, a consultant for small firms IPOs, is advising Elkann over the deal. Deutsche Bank and Morgan Stanley are general financial advisors for the group, Elkann said.

Italia Independent has increased pre-tax profits every year, helped by a fast-changing array of products. Its sunglasses unit includes styles with frames in a material that changes from black into camouflage and polka dot prints when under the sun.

The company expects pre-tax profits to reach 1.7 million euros in 2013.

Elkann said he had invested 1.5 million euros to launch his company after marketing jobs at Fiat and Maserati.

He said he wanted to bring "customised" luxury - the inside of his Ferrari car is covered with denim - to everyday items like sunglasses.

One of his sunglasses models - which are sold at around 150 euros - can be personalised in 200,000 different ways, he said.

Elkann was behind the relaunch of the Fiat 500 brand, taking the small car from a cheap, elderly model into an trendy object of desire, even pairing up with luxury goods maker Gucci for a limited series of the car featuring Gucci's signature red-green stripe and velvet-look dashboard.


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