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Damiani’s Growing Pains

Venerable Italian jeweler Damiani takes a multitiered approach.

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MILAN — When Guido Damiani moved to Milan 15 years ago to be a real estate agent, he shared an apartment with a goldsmith friend whose stories of diamonds and gold intrigued their female dates much more than his brick-and-mortar ones.

This story first appeared in the December 15, 2008 issue of WWD.  Subscribe Today.

But things changed when Damiani went back to his gem-studded roots and today the chairman and chief executive officer at the 84-year-old company founded by his grandfather, Enrico, has his fair share of stories to tell.

Damiani and his siblings, Silvia and Giorgio, both vice presidents, spearheaded fast-paced growth when they took the reins from their father, Damiano, who died in a car accident in 1996. The past decade has been prolific for the firm, which morphed from a medium-sized jewelry company to a public group with a varied portfolio of brands.

Moreover, Damiani acquired retail chain Rocca SpA in 2006 and struck two high-profile designer collaborations with Jil Sander’s Raf Simons and Martin Margiela.

But things haven’t always gone smoothly for Damiani of late, from the firm’s share price to its financial results. When asked to evaluate the stock market adventure started in November 2007, Damiani said: “If we look at the stock price, it’s clear that we haven’t had much satisfaction but we didn’t do it for short-term profit,” said the 40-year-old executive. “However, it did help us raise cash to make investments such as the acquisition of Rocca and to make us debt free.”

Over the last year, Damiani’s stock slumped fourfold, falling from a peak of 3.98 euros or $5 at current exchange, to 1 euro or $1.30. Damiani noted that three years are needed to truly evaluate the undertaking.

In the six months through Sept. 30, Damiani’s net profit fell 46.5 percent to 1.8 million euros, or $2.3 million at current exchange. Consolidated revenues fell 10.9 percent to 66.1 million euros, or $83.8 million.

Thanks to the group’s myriad brands — Damiani, Bliss, Salvini, Alfieri & St. John and Calderoni 1840 — Damiani has a multitier positioning that caters to teenagers on a budget who buy Bliss and sophisticated shoppers who splurge up to six-digits for Damiani and Calderoni 1840.

Their star-studded advertising campaigns have featured Brad Pitt, Jennifer Aniston, Sharon Stone, Gwyneth Paltrow, Paris Hilton and Juventus soccer ace Alessandro Del Piero.

Save for Bliss, which is outsourced to China, all of Damiani’s production takes place where it’s based in Valenza, a medium-sized town in Italy’s northwest that is densely populated by jewelry companies.

Damiani also broke new ground by striking deals with Jil Sander and Margiela to create fine jewelry collections for the houses. The introverted and experimental nature of both designers didn’t intimidate Damiani, who views the alliances as “constructive for both parties.”

For Jil Sander, the firm crafted inventive earrings made with thin gold rods and precious stones that meld a tribal aesthetic with a Twenties air and switched gears to make Margiela’s extra large pieces including necklaces composed of giant oval links.

Such unions display Damiani’s versatility and capability to treat designer’s whims.

“We’ve had plenty of fashion houses come knocking at our door,” said Damiani. “When the crisis withers, I think there will be a boom of fine jewelry brands because consumers, especially ones from emerging markets, will want to wear beautiful jewels.”

In a rather conservative industry like jewelry, where the winds of change are mild, Damiani is one of the few companies structured to control everything from design to production, from shipments to retail. It has 80 stores worldwide, half of which are franchised.

Commenting on the recent financial meltdown, Damiani hopes the pessimism that is warping consumers psychologically will soon dissipate, but stressed recessions are good to weed out flash-in-the-pan or underperforming companies.

He believes a weaker euro against the dollar and the yen is positive, and hopes consumers and investors will shun the stock markets to invest in luxury goods again.

“It’s obvious that for an entrepreneur eager to get things done, these economic conditions are frustrating,” said Damiani. “But I’m convinced that luxury goods are the last to enter a recession and the first to come out of it. And we’ll be ready when that happens.”

 

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