Risiko fashion starts again: from Prada to Armani, the big names that resist foreign hands

Everyone envies us and everyone wants us. But there are those who resist and continue to say ‘no’ to the flattery of abroad. While reaching out to Made in Italy in the risk of luxury brands that end up beyond Italian borders, such as Etro, the latest of the Italian brands that has found a buyer in L Catterton, the largest global private equity company linked to LVMH , several names of Italian luxury are resisting – at least for now – the clutches of foreign buyers. In Italian hands remain Prada, Armani, Tod’s, Aeffe, Moncler and Brunello Cucinelli, but also Diesel, with the patron Renzo Rosso, owner of the Otb group, which in addition to growing internally in the last decade has bought up brands such as Marni , Maison Margela, Viktor & Rolf and, most recently, Jil Sander. Armani set up his Foundation in 2019 and a few months ago announced a change in his mind on the future of the company, declaring himself available to alliances with other Italians, even if last month King Giorgio seems to have responded negatively to Exor’s proposal for a possible alliance. Tod’s remains independent but rumors continue to follow one another after LVMH increased its stake from 3.2% to 10% in recent months. The Prada Group, which in its portfolio boasts brands such as Miu Miu, Car Shoe, Church’s and Marchesi 1824 and is listed in Hong Kong, sees Patrizio Bertelli and Miuccia Prada’s family firmly at the helm, with his son Lorenzo, who has recently joined the company. . Even Dolce & Gabbana, Salvatore Ferragamo (who despite recurring rumors has always denied a potential sale) Moncler by Remo Ruffini, which the entrepreneur bought in 2003, do not give in to flattery, while Ermenegildo Zegna announced last Monday the listing on the New York Stock Exchange. through a merger with the American spac of Investindustrial. “Surely the last two years of coexistence with Covid have put pressure on the liquidity of many brands – Filippo Bianchi, managing director and partner of BCG, and Filippo Prini, project leader of Bcg -. If brands supported by large funds have had the opportunity to leverage the strength, including financial strength, of the group, the ‘stand alone’ brands, in most cases of small size, have felt the consequences of the crisis more, which explains, albeit partially, the ferment in M&A activities around these brands “. Often these ‘stand-alone’ brands are acquired by foreign groups and up to now Italy, if not with very few exceptions, has failed to create a pole of luxury groups such as happened in France, where there are two largest global luxury groups such as LVMH and Kering or in the USA with groups such as Capri Holding. “The structure of the group can boast, in many ways, a clear competitive advantage – underline Bianchi and Prini – for example when contracting sales spaces, even in shopping centers, or in terms of financial solidity and investments in development of e-commerce, omnichannel and data and artificial intelligence strategies, which have now become fundamental for an optimal management of the data to which every brand has daily access. Therefore, even this phenomenon explains the interest of foreign groups for Italian excellences that have not yet reached comparable numbers to theirs, having these revenues lower than one billion euros “. Over the years, several brands have ended up in foreign hands: the French luxury giant Kering has bought Gucci, Bottega Veneta, Pomellato, Dodo, Brioni and Richard Ginori. Since 2012 Valentino has moved to Mayhoola Investments and Versace has been sold to the American Capri Holdings Ltd of Michael Kors, without forgetting the other powerful French luxury hub, Bernard Arnault’s LVMH, which in a handful of seasons has grabbed Loro Piana, Fendi, Emilio Pucci, Acqua di Parma, and Bulgari. Then there is China, it has made its own brands such as Krizia, Mila Schon, Sergio Tacchini, Ferrè and Sergio Rossi, which recently ended up in the hands of Fosun. And still realities such as Buccellati (purchased by Richemont), La Rinascente, passed to the Chinese of Central Retail Corporation, La Perla, sold to the Dutch of Sapinda. “In the fashion and luxury industry – highlights Armando Branchini, strategic advisor Parthenon EY at Adnkronos , Fashion, Luxury and Retail – foreign investments have been multiple and significant in the last 30 years. It has always been Italian companies with internationally famous brands and significant turnover in their respective sectors. In the vast majority of cases, the companies were managed better than before, judging by the growth in turnover, margins, investments, attention to culture and individual heritage, the made in Italy origin, the various companies and brands ” According to Branchini, there are three main factors that benefit the groups. “Management entrusted to managers selected with care and often made to grow internally – underlines -. Indication by the top of the group of very specific objectives and delegation on how to achieve them. Internal satisfaction of financial needs. In summary: controlled rational management “. But also the ability to “cultivate, select and attract the best creative talents from all over the world and the use of the critical mass of the group in financial terms, of central functions (HR and Talent, Consumer Relation, Digital Innovation, Esg, … ) and negotiating skills towards commercial, real estate and media partners “. These factors, he points out, are made possible thanks to a division of roles, both practical and emotional. The owners of the large groups are investors and manage holdings, Branchini points out, the independents own a brand that bears their name. The holding companies, he recalls, “are not just financial organizations, on the contrary they have increased their central operational functions over the years, in support of the brands. It follows that the couple of people at the head of each company, the CEO and the creative director, are totally focused on the objective of ‘creating value for the consumer and the group’ “. This, the expert points out, explains why the attention to culture and individual heritage, of the made in Italy origin of the various companies and brands. “In independent companies, the entrepreneur, in addition to the choice of the CEO and the creative director – says Branchini – must deal with relations with shareholders, often family members, with the banks, with the large retailers, of investments and innovation, of organizational and personnel policy, of fiscal policy. If this, in short, is the representation of the comparison between Italian companies independent and not, in the last twenty years, the unexpected arrival of the pandemic will hopefully induce some entrepreneurs and family businesses to review traditional approaches and first of all to innovate the business culture. And decide to go public, rather than pass the hand. ”The pandemic has also changed the ways of living and buying of many consumers. “Among the many changes – observes Branchini – there is the growth in demand for coolness which tends to concentrate demand on the most important brands (superbrands) in each product category, resulting in a penalization of niche brands, very present in the system. Italian”. Brachini has no doubts: “There will certainly be other cases of foreign investment in the short term, naturally. But we have just witnessed the decision of an important company that has decided to go public, to equip itself with the necessary means to finance a phase of significant investments. And going public is a very different decision from selling majority or control to a foreign buyer! We hope that this example will soon be followed by other independent Italian companies. “A final consideration on what will happen in the coming months and years for those brands that are still ‘stand-alone’ but continue to make Italian excellence known around the world. Bianchi and Prini of Bcg summarize it well: “Even if timidly, in recent years it can be observed that many Italian companies with a growing ‘critical mass”, among the largest in the Italian market, have begun to make partnerships or acquire other brands by starting small centers of national excellence. What we deduce is that this could be a significant way for Italian brands and small groups to continue their growth, as well as a valid alternative to selling to foreign groups and funds “. (by Federica Mochi)