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Salvatore Ferragamo Signs Sustainability-Linked Credit Agreement

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MILAN — Salvatore Ferragamo SpA has signed a financing credit line granted by Intesa Sanpaolo SpA for a maximum amount of 250 million euros that is linked to the luxury brand hitting certain sustainability targets.

Intesa Sanpaolo also acted as global coordinator, bookrunner and sustainability coordinator through the IMI Corporate & Investment Banking Division.

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The credit facility is structured in a term loan credit line with a five-year maturity in 2025 and a revolving credit line with a maturity in 2024 and possibility of renewal for a further year, each one for an amount of 125 million euros. It is associated with a rewarding mechanism linked to the achievement of specific sustainable indicators. The credit facility is granted to support the Florence-based company’s specific Environmental, Social and Governance targets and to finance general cash-flow needs, reducing risks from the current market situation. It also helps consolidate Ferragamo’s solid liquidity position and emphasizes the company’s commitment to sustainable investments.

Ferragamo is a signatory of the Fashion Pact and has been spearheading environmental initiatives.

Last year the company staged an exhibition dedicated to sustainability at the Salvatore Ferragamo Museum in Florence called “Sustainable Thinking,” exploring the theme by tracing a path that connected the namesake founder’s pioneering use of eco-friendly materials — from uppers in raffia to soles in galalith — with today’s most innovative developments.

In 2014, the fashion house created an in-house Green Team focused on the development of eco-friendly activities and in 2016 certified its group sustainability report. In addition, in 2017 the company launched a three-year Sustainability Plan, which included significant investments to reduce the impact of its manufacturing activities. In 2018, Ferragamo obtained certifications and also joined the United Nations’ Global Compact, a voluntary initiative based on chief executive officer commitments to implement universal sustainability principles and to take steps to support U.N. goals.

In 2017, Ferragamo launched a capsule collection made with the patented Orange Fiber, the first fabric in the world made from citrus fruits. The company was the first brand to use the Orange Fiber — a twill that looks and feels like silk.

Ferragamo is the latest fashion company to link a financing package to sustainability.

Earlier this month, Moncler signed a financing credit line also granted by Intesa Sanpaolo SpA for a maximum amount of 400 million euros based on similar rewarding mechanisms linked to the achievement of environmental impact reduction targets. The committed credit line expires in 2023 and can be renewed for two additional years. The company is committed to becoming carbon-neutral in its global direct emissions by 2021.

As reported, last year Prada SpA signed with Crédit Agricole Group the first sustainability-linked loan in the luxury goods industry for 50 million euros over five years through a Sustainability Term Loan, introducing a rewarding annual pricing adjustment based on the achievement of sustainability targets.

In February, VF Corp. formally revealed the close of its first green bond. The offering includes 500 million euros in financing for projects encompassing sustainable products and materials, sustainable operations and supply chains and “natural carbon sinks” for its brands: Timberland, Vans, The North Face and Dickies.

Prior to this feat, German retailer Otto Group, which owns Bonprix, Crate and Barrel and Manufactum, was the first known issuer in the “textile sector” of “sustainability bonds.”