Stefanel confirms second phase of Nuance sale

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Italian clothing group Stefanel has announced it will exercise an option to buy 50% of travel retailer The Nuance Group for about Eur138m ($126m), which it will finance by raising debt

Fellow Italian retail group PAM bought 100% of Nuance from Swissair in April as the airline sought to pay off creditors. PAM then offered Stefanel an option to buy a stake of up to 50% (TRW 17/04/02).

Chairman Giuseppe Stefanel commented, "We are very pleased that we have been able to take advantage of an opportunity of this type - thanks to the trust that the PAM Group has in us - as it will give us a chance to capitalise on our experience in the retail sector. But above all it will boost the size of the group by allowing us to diversify in a way that is of considerable strategic value. This will give our brand a great deal more visibility, while also creating value for our stockholders, of that I am certain."

"This operation is of extreme strategic importance for [our] growth," Stefanel said in a statement, adding the deal would more than triple its turnover and boost its international visibility.

"Stefanel is in this way going ahead with the process of diversification, foreseen in the three-year plan, in a sector that is similar in retailing culture, but not subject to the cyclical fluctuations which its own sector suffers."

"The particularly volatile cycle of the clothing sector should find airport retailing a stabilizing factor, given that it is extremely captive in nature. Thanks to this new acquisition, Stefanel will have the chance to increase its number of sales outlets in locations with very high density traffic, both in terms of sales and in terms of customer movement.

"Moreover, the operation is a very interesting opportunity for Stefanel to transfer to this new activity the consolidated experience that its management has acquired in retailing," Stefanel added.

Stefanel, whose sales totalled Eur267m ($244m) in 2001, said it would invest in Nuance via medium-and long-term loans.The company said the transaction would be closed by the end of the second quarter of 2002.