The Samsung Group, the South Korea-based electronics giant, has placed a bid on the Gianfranco Ferré clothing label for the bargain-basement price of $25 million. And Samsung can afford to: it made $117.4 billion in 2009.
Ferré is a luxury fashion house based in Italy that has been flailing for the past few years due to poor sales, followed by the death of its founder, which drove the company to near-bankruptcy in 2009. Designer Ferré first created his eponymous womenswear line in 1978 followed by menswear in 1982 before expanding to intimates and perfume. He passed away in 2007 from a brain hemorrhage.
In June, the company put itself up for sale and, with the help of private-equity firm Prodos Capital Management, Samsung swooped in with a bid. According to the Wall Street Journal, Samsung’s textile division will be a minority partner and will provide capital to cover the costs of inventory and production.
Samsung has failed before in its fashion investments: another Italian label, Derercuny, folded in 2009 despite a $22 million investment from Samsung the year before. Three years into the clothing line’s creation, it had yet to turn a profit — and Samsung lost millions as a result.
One major roadblock standing in the way of the Ferré deal is Italian Premier Silvio Berlusconi. According to the New York Times,“The government itself will review the terms of the deal, a process that could take another two weeks.” Specifically, Berlusconi wants to keep Ferré jobs and manufacturing in Italy — which may conflict with Samsung’s interests.