Diego and Andrea Della Valle, the two brothers who control Tod's and who made a bid to take over Church's a few years ago, have acquired a 29.248 percent stake in Marcolin, further diversifying their portfolio of investments. They each paid €5,114,000 or €0.925 a share for a 12.184 percent interest in the company, which is about to lose the juicy Dolce & Gabbana eyewear license to Luxottica.

The Marcolin family thus sees its direct and indirect shareholding decline to the same level as that of the Della Valle family, i.e. 29.248 percent. The balance of 46.384 percent continues to trade on the Milan Bourse, and that includes Dolce & Gabbana's stake of 5 percent. Cirillo and Maurizio Marcolin, the twin brothers who run the family company, have each sold a 3.7 percent stake. Their father Giovanni has sold about 12 percent of Marcolin's shares. A shareholders' pact involving the family and another stakeholder has been broken, leaving each one free to sell his shares to anyone.

It will be interesting to see the results of this unusual blend of Italian competences from the eyewear and footwear sectors, which we personally follow simultaneously (we also publish a business newsletter called Shoe Intelligence). The Marcolin brothers have publicly welcomed the arrival of the Della Valle brothers, describing them as two leading entrepreneurs who have shown their skills in the manufacturing and marketing of other types of luxury accessories. For the moment, there is no agreement on possible eyewear licensing deals for one or more of the footwear and apparel brands owned by the Della Valle brothers ? Tod's, Hogan, Fay and Roger Vivier.

Marcolin says it has started negotiations for the acquisition of new licenses ? and the presence of the prestigious new shareholders should help guarantee a higher degree of success in the process. Meanwhile, Marcolin has secured a premature extension of its 5-year-old licensing contract with the Italian fashion house of Roberto Cavalli, which was going to expire three years from now.

The new agreement runs until the end of 2010, with pretty much the same conditions as the present one, and it includes the rights for a new brand, called Just Cavalli, which will be launched worldwide in October 2005. Marcolin expects sales of €60 million from the Roberto Cavalli and Just Cavalli eyewear lines during the 2005-06 period.

Sales of Marcolin's Roberto Cavalli and D&G lines grew by 64 and 32 percent, respectively, in the first nine months of 2004. Together with the Miss Sixty eyewear line, whose sales rose by 28 percent, they contributed heavily to boost the group's overall consolidated turnover by 12 percent to nearly €128.1 million in the 9-month period, according to preliminary figures, or by around 15 percent on a currency-neutral basis.

Various markets recorded double-digit increases. The gains reached 23 percent in Italy, 43 percent in France, 20 percent in Spain and 11 percent in Germany. Sales increased by around 8 percent dollars in the USA, where the company's new Kenneth Cole line for the department stores was introduced satisfactorily, and profitability improved.

For the group as a whole, the operating margin rose sharply to 11 percent of turnover before amortization and depreciation (Ebitda), as compared to 7 percent in the year-ago period. The margin after amortization and depreciation (Ebit) increased from 1 to 6 percent. Marcolin was thus able to book a pre-tax profit of around €5 million. The net financial position improved significantly to €40.9 million from €6 million, and the debt/equity ratio to 0.69 from 0.82.