On July 1, storied Italian textile firm Marzotto SpA spun off its fashion holdings into a new concern, Valentino Fashion Group, with shares trading on the Milan Bourse. The move was an effort to wring equity value out of its high-profile apparel labels — including Valentino, a majority stake in Hugo Boss AG and the licensed Marlboro Classics and M Missoni labels — by separating them from the company's legacy textile operations.
"I think this is a revolution in our company, and for our family," said Matteo Marzotto, chief operating officer at Valentino SpA, a division of the group, in a presentation outlining the strategies for turning the fashion group into a global luxury player. "The title of the summit ['The Challenge of Change'] is perfect for us."
Marzotto's textile roots are deep, as the company was founded in 1836, prior to the unification of Italy. "It was the time of the Austro-Hungarian Empire, and the company was starting and stopping. Every two weeks there were the French or the Austrians [invading], and the company really struggled — as we did later with Valentino," said Marzotto, to laughter.
The company segued into the men's wear business in 1950. "It was right after World War II, and we used machinery that came from the Marshall Plan, so that should tell you something about our relationship with the U.S."
In 1986, Marzotto signed its first designer licenses, and in 1992 acquired a controlling stake in Hugo Boss — today it owns 50.9 percent of the German label. Three years ago, Marzotto bought 100 percent of Valentino.
"Hugo Boss was our first step into the international market and beyond provincial Italian, so I would say that was the most important time in our history, as was the 2002 deal for Valentino, which was our first step into a fashion luxury brand," said Marzotto.
The decision to create an independent Valentino Fashion Group — which accounted for 85 percent of 2004 sales within the former Marzotto company — was made in order to create shareholder value. "The market was asking us to be more clear," explained Marzotto. "Textiles were struggling because of new market issues and the cost of labor, and our share values were being discounted. There were no synergies between the different businesses."
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