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With 85 years under its belt and a name that conjures up quality Italian craftsmanship, Furla is aiming for sales of 300 million euros, or $394.4 million, within four years.
This story first appeared in the June 13, 2012 issue of WWD. Subscribe Today.
“We have no choice but to become bigger,” said the handbag company’s chief executive officer Eraldo Poletto, who, unlike most executives, didn’t talk about store growth, but instead right-sizing the business.
“If we focus on what we control versus what we don’t control, we can do it,” he said, the “it” being the sales target. That goal, which even Poletto admits is “aggressive,” is already slowly materializing.
Furla’s sales in 2011 increased 13.7 percent to $233.1 million, from sales of $205 million a year earlier. Earnings before interest, taxes, depreciation and amortization jumped 46.5 percent to $32.8 million, from $22.4 million in 2010.
Instrumental to this growth is “broadening” yet refining the design aesthetic of Furla’s pipeline of products by making the brand more accessible to younger consumers. Not only does this include offering more accessible prices and trendier designs, but it also consists of reducing the size of Furla stores and shoring up operational efficiencies in sourcing, the ceo said.
The brand has already put in place many of these efficiencies. On the product side, Furla broadened its offering when it launched a luxe collection for less than $2,000 at Saks Fifth Avenue last year. Furla, which sells bags for about $500, also recently created a lower-priced collection that retails in the $200 range. Called the Candy collection, the bright, shiny handbags made from PVC symbolize a departure from the brand’s leather-laden heritage.
Although Candy isn’t indicative of a new direction for the brand, it provides a glimpse of what’s to come, Furla’s U.S. ceo Tommaso Bruso told WWD.
Fashion collections, as Bruso called them, will begin to enter the brand’s offering more frequently, hopefully injecting the business with energy, color and new customers.
Still, in order to continue its expansion, there will need to be more store growth, Bruso admitted.
With 319 boutiques, 145 of which are directly controlled, Furla is focused on store count and distribution in untapped markets. Case in point: the brand opened a flagship in Bangkok this spring and is said to be looking to open one in the U.S. in the near-term. While part of the push has to do with expanding to new areas, it is also linked to balancing the brand’s distribution in stronger markets.
Currently, Furla gets 27 percent of its sales from Italy, which is among the major European nations that are economically challenged. Excluding Italy, another 27 percent of sales come from Europe and just over a quarter of its business comes from Japan. Asia delivers roughly 12 percent and the U.S. brings in about 8 percent.
“We want the right stores in the right places,” Bruso said. “But we don’t want too many stores.”
Bringing the conversation back to building the brand internally, Poletto agreed, but underscored the importance of the family-owned company’s quick, yet robust growth strategy.
With such a fervent message, could there be bigger plans on the horizon for Furla?
“Our first job is to organize the company so that the day we want to go public we can do it,” he said with a grin.