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MILAN — Gianfranco Ferré is trying to return to profitability by broadening its collection into daywear, seeking lucrative licensing deals in jewelry and home furnishings and a more competitive pricing strategy.
“It’s not that we are relaunching, but rather realigning the Ferré brand to a more dynamic, fresh approach,” chief executive officer Massimo Macchi said in an interview, praising the design talent of Gianfranco Ferré and stressing the importance of the designer’s creative autonomy and control. “Next year we will have a more competitive collection in terms of price, quality and design content.”
Manufacturing group IT Holding’s parent company GTP bought control of Ferré in 2000. It was one of several IT Holding acquisitions that racked up considerable debt for the company, which made its name in fashion as a licensee for designer diffusion lines such as D&G, Versus and Just Cavalli. Despite efforts to grow the brand, Ferré has yet to break even.
Getting Ferré back on track is a priority for IT Holding, which is losing two of its key licensees. Dolce & Gabbana announced this year that it is taking production of its diffusion line D&G in-house, beginning with the spring-summer 2007 season. And Versace isn’t renewing its contract with IT Holding for the manufacturing and distribution of Versus. IT Holding stresses that its relationship with Versace will continue as it still holds licenses for the Versace Jeans Couture and Versace Sport collections.
Macchi said that Ferré sales will grow 10 percent to 121 million euros, or $142 million at current exchange rates, in 2005 and another 13 percent in 2006. He stopped short of forecasting a profitability target, saying that 2006 will close with “positive results.” Ferré’s sales exclude revenue from diffusion line GF Ferré’s accessories business, which is organized under a separate umbrella of IT Holding.
Macchi outlined a series of growth priorities: The first is expanding the size of the signature Gianfranco Ferré collection into more wearable, affordable and less complicated pieces. One of the brand’s hurdles has been its extensive, almost couture-like detailing and focus on eveningwear.
Beginning with the fall-winter 2006 season, the companies will double the collection’s size with about 80 new pieces of straightforward daywear. They will cost about 35 to 40 percent less than the rest of the signature collection, will bear an ivory label and some will be incorporated into the men’s runway show in January and the women’s runway show in February. Macchi emphasized these new items aren’t a separate subbrand, but rather a complement to the main Gianfranco Ferré black label collection.
“It’s a new component of Gianfranco Ferré, it’s more prêt-à-porter as opposed to couture. It’s based on the same themes, the same color palette,” Macchi said. “We would never do clothes of a lower quality but [for ivory label items] we can use simpler materials and manufacturing methods.”
The ivory label is one of several Macchi-initiated projects intended to boost Gianfranco Ferré’s profile and widen its customer base on the higher and lower ends of the market. These plans include rounding out the accessories collection, launching a men’s fragrance next year and a home collection, as well as branching out into jewelry.
Diffusion line GF Ferré has already diversified into watches through a licensing pact with Global Watch Industries. The first timepieces bowed at April’s Baselworld exhibition. Distribution is limited to Italy and the Middle East, but there are plans to broaden it to other European countries next year. Macchi said that a Gianfranco Ferré-branded watch could also be in the works in the future.
Macchi, a former Bulgari executive, is also thinking jewelry. During the next six months, he hopes to sign licensing deals for both luxury jewelry bearing the Gianfranco Ferré label and a younger-spirited costume jewelry line for GF Ferré. Macchi declined to identify potential licensees, but he said that the company may be able to find a single partner to produce both the high-end and low-end jewelry collections. A licensing deal for a home collection is another goal for the next six months, Macchi said.
On the retail front, Ferré is to roll out a new store concept early next year. Macchi declined to reveal any defining characteristics except to say that Gianfranco Ferré himself, an architect by trade, has designed the stores. The first will open next month in Florence. Boutiques in Beirut and on Paris’ Rue du Faubourg St.-Honoré, which will also feature the new concept, are to open early in 2006. Underlining the strategic importance of Paris, a Ferré shop-in-shop is to open in the Galeries Lafayette department store in the coming months.