News: leading Italian furniture brand Driade has been rescued from bankruptcy by a private finance company.

Driade, which has worked with designers including Philippe Starck, Fabio Novembre and Ross Lovegrove, collapsed last year with debts of €1.7 million and closed its prestigious showroom on Via Manzoni in Milan. See all our stories about Driade products.

This week investment company Italian Creation Group injected €7 million to rebuild the company, taking 80% of the firm's equity in the process, according to Milano Finanza.

The group, headed by high-profile businessmen John Perissinotto and Stefano Core, now plans to relaunch the brand.

Driade was founded in 1968 by Enrico Astori and was for a long time one of the most glamorous and adventurous of the Italy's design-led brands, producing furniture, lighting and homewares.

The company, based in Fossadello near Piacenza, produced iconic pieces including Starck's three-legged Costes cafe chair (1984) and Tokujin Yoshioka's monobloc Tokyo-Pop collection (2001).

Core has now become president of Driade while Astori has been named honorary president. His daughter, Elisa Astori, is now creative director.

The rescue comes at a torrid time for the Italian design industry, with many of its small, family-owned companies struggling to stay afloat. After borrowing heavily during the boom years, many of them are seeing sales collapse in the key Italian home market.

In an interview with Dezeen last month Claudio Luti, founder of design brand Kartell, said many Italian firms made a "big, big mistake" by failing to focus on export markets or raise sufficient capital to expand.

"They have perhaps invested too much in innovation and not enough in things like international marketing," said Luti, who is also president of Milan's Salone del Mobile furniture fair. "In the past, the companies were profitable, and it was enough to sell to markets close to Milan. But it was a mistake."

He added: "Also in Italy you have to realise that the policy was not to push capitalism. It was all about small family companies. They didn't raise capital or list of the stock exchange. There was not this push. On the contrary, it was about staying small. It was a big, big mistake."

Earlier this month Kartell announced plans to open 50 new stores in China.