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CHANGE CAPITAL PARTNERS ACQUIRES MAJORITY STAKE IN FRETTE

15th July 2014

Change Capital Partners (“the Firm”), the pan-European private equity fund investing in retail and consumer goods companies, announces that it has acquired a majority stake in Frette SrL (“Frette or “the Company”), a leading Italian luxury linen and home furnishings business.

Change Capital Partners will make a significant investment into the Company to enable it to reach its full growth potential.  Frette’s existing owners, JH Partners, a San Francisco-based consumer focused private equity firm, will retain a minority stake in the business.

Founded in 1860 and based in Monza near Milan, Frette blends contemporary design with Italian craftsmanship to create exquisitely styled, handcrafted linens and textiles that are supplied to the world’s most prestigious hotels, restaurants, private homes, airlines, ocean liners and trains, such as the Orient Express.  The company has supplied high quality linens to aristocratic families throughout Europe as well as the Vatican.  Frette has 15 directly owned boutiques around the world on the most exclusive shopping boulevards in locations including Paris, Milan, Rome, New York and Beverly Hills and is present in high-end department stores from Los Angeles to London and Moscow to Hong Kong.

Frette had consolidated sales of c. €90m in 2013 and it sells through a combination of directly operated stores, wholesale accounts and to hotels via the hospitality channel.

Change Capital Partners believes that Frette offers an exciting opportunity for growth in the years ahead and will deploy its significant retail, operational and management expertise to enable the Company to strengthen its position as the pre-eminent player in the luxury bed and bath linen market.  Change Capital Partners estimates the global luxury bed linen market to be worth over €1.2 billion and expects it to benefit from the continued growth in customer demand from emerging markets.

Steve Petrow, Partner at Change Capital Partners, commented: “We are delighted to be able to make a significant investment in Frette.  The Company has genuine heritage, deep expertise and the specific advantage of spanning both consumer and hospitality sectors.  With our strong track record of investing and growing landmark consumer and luxury businesses we are excited by the prospect of taking Frette to the next level.”

Andrea Warden, Chief Executive of Frette, commented: “As the market continues to evolve there are exciting opportunities ahead for Frette.  With the experience, strategic direction and active support of Change Capital Partners, we look forward to entering a new phase of growth.”

Steve Baus, Partner at JH Partners, commented: “We would like to extend a warm welcome to Change Capital Partners, who will be fundamental to providing the Company with the necessary support and resources to build on its success to date. We are delighted to remain involved in Frette, which we believe has an exciting future ahead of it.”

This transaction marks the sixth investment of the Firm’s second fund and the thirteenth overall. Italy is a key market for Change Capital Partners and the team has several native Italian investment professionals.  In December 2010 the Firm acquired a majority stake in Vesevo (now Sebeto Group), a leading Italian casual restaurant chain with over 120 locations in Europe and the US. Sebeto Group counts the Rossopomodoro brand among its dining formats.

In the luxury sector previous investments include Jil Sander, which was acquired from Prada and was sold to Onward Holdings following a successful turnaround.   Current investments include Paule Ka, the Paris-based women’s ready-to-wear accessible luxury brand, which is sold in 53 countries around the world.

  

About Change Capital Partners

Founded in 2003, Change Capital is a private equity partnership, dedicated to making investments in consumer-oriented businesses across the European lower mid-market. The firm brings both capital and operational experience to enable brands and retail concepts that have established a distinctive customer proposition to secure the next stage in their development.

Change Capital’s team of investment professionals brings together the management expertise of founder Luc Vandevelde and Roger Holmes who led businesses such as Carrefour and Marks & Spencer with the private equity expertise of Steven Petrow and Stephan Lobmeyr from Bain Capital and Hicks Muse respectively.

The firm is currently investing its second fund and has so far deployed c €440 million through 13 acquisitions across Europe. Its portfolio is diversified by geography, sector and investment holding period.

Change Capital Partners is registered in the UK and is authorized and regulated by the FCA.



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