Not waving but drowning

Giorgio Armani famously said he would never let private equity buy his fashion group. Financial investors left luxury companies «adrift», according to Italy’s maestro of style. Those words have now proved prophetic, with Ferretti, the luxury yacht maker, defaulting on its E1bn of buyout debt and forcing two of its private equity owners to bail out. Ferretti makes yachts which cost on average E1.5m. It underscores how rapidly a luxury business can deteriorate when plunging sales make high leverag...