Italian luxury manufacturer Factory, renowned for its expertise in leather, has recently been placed in receivership. The company, which had been successfully managing Neil Barrett’s collections under license for several years, found itself in financial turmoil from which it was unable to recover following the devastating impact of the Covid-19 crisis. In an effort to safeguard its operations, Factory sought protection under a preventive concordat, a procedure similar to the French judicial reorganisation. Regrettably, these measures proved unsuccessful, forcing the company to resort to filing for judicial liquidation.

The challenges faced by Factory can be attributed to the unprecedented difficulties brought on by the pandemic. However, the situation further deteriorated with the imposition of European sanctions on the luxury goods trade as a response to Russia’s invasion of Ukraine. Factory heavily relied on this region as one of its primary markets, making it particularly vulnerable to the adverse effects of the sanctions.

To compound Factory’s troubles, the company also lost its licensing contract with Neil Barrett. The contract expired after the autumn/winter 2021/2022 season and was not renewed, exacerbating the company’s already precarious financial situation. Consequently, Factory was unable to regain stability. Despite employing more than 40 people, Factory managed licensed collections for three luxury brands, in addition to its own brand, Drome. However, its revenue plummeted significantly from 36 million euros in 2020 to a mere 6 million euros in 2022.

Factory was originally founded by Ferrero Rosati in 1974, who initially started his business with the creation of the leather ready-to-wear brand Santacroce. Over time, Rosati expanded his operations to include production for luxury houses, ultimately selling a majority stake in his company to Prada in 2001. In 2008, Rosati established a new company, Factory, in order to support the growth of Drome, a ready-to-wear brand launched by his daughter, Marianna Rosati. Drome quickly gained acclaim for its exceptional craftsmanship in working with skins and leathers, attracting a loyal customer base of up to 250 multi-brand stores.

Unfortunately, due to the financial crisis and subsequent liquidation proceedings, Drome has also been forced to cease its activities. At present, no advisor has been engaged in any potential acquisition, leaving the brand’s future uncertain. This turn of events is a devastating blow for Factory, which was once a stalwart in the storied history of Italian luxury manufacturing. Unable to overcome the myriad challenges posed by the pandemic and its aftermath, the company succumbed to an unfortunate demise.

Useful Links:
1. https://www.businessoffashion.com/articles/news-analysis/italian-fashion-held-hostage-by-retail-bankruptcies
2. https://www.reuters.com/business/retail-consumer/made-italy-brands-struggle-survive-receive-fresh-investment-2022-09-28/