|  Milan Fashion Week in September was less about hemlines and the whims of celebrities than it was about bottom lines and trends in the boardroom. Indeed, the media spotlight practically abandoned the catwalk to follow the figures behind the host country’s big labels. Enter Massimo Gasparini, new boss at Missoni, who replaced Umberto Monti after 40 years; Michele Norsa, the first non-family chief executive at Salvatore Ferragamo; Furla’s chief financial officer Paolo Fontanelli, poached from Giorgio Armani; and Giancarlo Di Risio, the chief executive who resuscitated Versace.
As the Financial Times’ Vanessa Friedman noted: “For the first time in the history of the industry, there are ... more family companies run by non-family members than family ones”. Adding to the autumn event’s elegiac tone, designer Roberto Cavalli confirmed he wanted to sell part of his business; meanwhile Ferre, now owned by listed IT Holding, named Sweden’s Lars Nilsson as creative director, filling the void left by the death of Gianfranco Ferre in June. And providing a fitting operatic finale for the city that is home to La Scala, 75-year-old Valentino laid down his scissors after 45 years, his business (which owns half of the Hugo Boss label) bought by private equity group Permira this summer. According to Armando Branchini of Milan-based consultancy Intercorporate, the Italian luxury companies are finally grasping what their French rivals did in the mid-1990s; to manage global growth, second- or third-generation family businesses have to bring the conglomerates in. With the exception of Bulgari, the third-largest upscale jeweller after Cartier and Tiffany, which listed in 1995, Italian luxury firms have stubbornly resisted going public. Now, as the luxury market expands into new sectors and geographic territories, they need deep pockets to compete for a slice. The world’s discretionary income soared 11.4% to $32.7 trillion (€26 trillion) in 2007, providing the first double-digit rise in seven years, according to the Merrill Lynch/Capgemini World Wealth Report. Meanwhile, the world’s super-rich population – those with a discretionary income of more than $1m – rose 8.3% to 9.5 million, with Singapore and India leading the way. At the same time, it is a dizzyingly expensive affair for even well-heeled luxury groups to expand into emerging but fiercely competitive territories: obtaining retail licences, renting prime sites, building properties, training staff and glossy marketing campaigns all use up sizeable resources.
The Italian companies are also grudgingly aware that French firms now dominate this sparkling global industry, with 36% of the market. Some, such as Hermès, have long been listed on the Paris bourse, and many others have been absorbed by one of two listed behemoths – Bernard Arnault’s LVMH, or his arch-rival François Pinault’s PPR. By comparison, most Italian companies are like mom-and-pop stores. PPR owns Gucci, one of Italy’s most famous brands, and LVMH has bagged smaller Italian prizes Pucci, from the founder’s daughter in 2000, and Fendi. |