Causes of the crisis: High losses and rising debt
The change of ownership was triggered by a sustained deterioration in the financial situation. Dainese had posted losses for three consecutive years, with the 2024 financial year closing with a record loss of €120 million (approximately US$132 million). The previous year’s loss was significantly lower. The main causes of the crisis included the write-off of goodwill amounting to €86 million (approx. US$95 million), declining demand – particularly in Asian markets – an unfavorable macroeconomic environment with high interest rates, excess inventory from the pandemic period, and declining consumer spending.
With debt amounting to 15 times EBITDA (estimated at €20 million or approximately US$22 million), Dainese was well above the industry standard limits of 3 to 3.5. A short-term capital injection of €15 million (approximately US$16.5 million) by the previous owner Carlyle in 2024 was unable to halt the downward trend. The postponement of an interest payment due at the beginning of July was also seen as a clear warning sign.
Takeover and planned restructuring
Various restructuring options were discussed at several extraordinary board meetings in June and July 2024. The restructuring included, among other things, the issuance of a new bond secured with €25 million (approximately US$27.5 million) to finance working capital and support subsidiaries. This measure supplemented the €285 million (approximately US$313 million) previously raised from private bonds, most of which had been subscribed by HPS and Arcmont.
In addition, there is a revolving super-senior loan of €52.5 million (approximately US$57.7 million) granted by major financial institutions such as Unicredit, Intesa Sanpaolo, and Bank of America. The intertwining of guarantees and collateral led to an extremely complex financial situation.
As part of the sale, the new owners waived most of the claims in return for the takeover. The final settlement is still being implemented. According to information from the company’s environment, ongoing operations, including employees and suppliers, are not expected to be affected for the time being.
Statements and outlook
A company spokesperson stated: “Dainese is in constructive discussions with its financial partners regarding a recapitalization of the business to strengthen its capital structure and improve financial flexibility.” Management emphasizes that current operations are not at risk.
The new ownership structure poses major challenges for Dainese: on the one hand, it needs to reduce its financial liabilities and review its business model, while on the other hand, the long-established company must maintain its position in international markets. The future strategy is likely to focus on cost savings, a realignment of sales, and adaptation to the changed market environment. The outcome of this development remains to be seen.
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