Stefanel to pick new investor by year-end to avert bankruptcy - sources

Italian clothing company Stefanel is working against the clock to secure investment from a partner by the end of the year and avert the risk of bankruptcy, three sources told Reuters on Friday.

The fashion group accumulated over €170m ($181m) in losses over the last 10 years while attempting to reach out to higher-spending consumers in order to survive competition from high-street brands such as H&M and Zara .

In November Stefanel was granted court protection from creditors until March of next year. The group has for some time sought to restructure some €90m in debt and relaunch its business with the aid of fresh capital.

"Everyone is working to identify a partner by the end of the year," said one of the sources.

"At the moment, the dossier is the hands of the technical commissions of the banks, but it will then have to go through their boards... and March is just around the corner."

Stefanel said last week it was in talks with two potential investors. The sources said both were investment funds and that one is Portuguese-Italian Oxy Capital.

"Certainly there must be some discontinuity with respect to the past, both in terms of shareholding and of management," said another source, adding that, if needed, chairman, CEO and controlling shareholder Giuseppe Stefanel was ready to reconsider his position.