MILAN — An initial public offering is on the horizon for the Salvatore Ferragamo Group, and the company is going outside the family to help get it done.
Ferragamo on Wednesday appointed Michele Norsa as its new chief executive officer and general manager of the group, controlled by Salvatore Ferragamo Italia. Norsa last week resigned his post as ceo of Valentino SpA and general manager of Valentino Fashion Group's licensed brands, M Missoni and Marlboro Classics.
"The [family's] fourth generation is up next, and we did not want for these young shareholders to be restrained, without the chance to sell or buy [shares]," said Ferruccio Ferragamo, managing director of the company, who will now become chairman of SFI. "We want a company with a broader and more fluid breadth."
He did not reveal a specific time frame for an IPO, although Wanda Ferragamo, who has led the group for more than 45 years, said in a statement the listing would happen in the "not too distant future."
This is the first time the Ferragamo family has expressed an interest in an IPO, although Norsa's experience with the process is clearly one of the reasons he was brought into the Italian footwear, leather goods and ready-to-wear company. Norsa played a critical role in Marzotto SpA's stock market spin-off of its fashion interests into Valentino Fashion Group.
"Norsa is an expert, well-prepared and knowledgeable, someone I've known for years, and I really admire him," said Ferruccio Ferragamo. "We want to do it well, but there is no rush, we have liquid assets and we will go public when the company will be ready and when the market will be favorable."
Wanda Ferragamo said that, by "assigning the executive role to a successful manager well known to us, the family intends to go on providing the vision, the guidance and the strategic coordination, as well as the passion needed to actively support a new development phase globally, taking advantage of the extraordinary potential offered by the brand."
Under the company's new structure, Wanda Ferragamo, the widow of founder Salvatore Ferragamo, will remain as chairman of Ferragamo Finanziaria, the family-owned holding company that controls SFI and, in addition, will become the honorary chairman of SFI."It's a beautiful company, a beautiful brand and a beautiful family," said an upbeat Norsa in a phone interview on Wednesday.
The executive has a history of working with Italian families, from the Mondadoris to the Benettons, the Marzottos and now the Ferragamos. "The one thing a manager can choose is the quality of the people he works with," said Norsa, who dismissed possible controversies connected to a large family at the helm of a firm.
"The more family members, the more positive contributions. These families have a love and a passion for their labels that is fundamental," said Norsa.
The executive pointed to Ferragamo's added assets: an "extraordinary brand awareness," a strong presence abroad, and a "tremendous potential" in areas such as Asia and Japan, where the brand already counts on an "excellent positioning." In addition, Norsa said Ferragamo "has a history, a heritage and a message that will contribute to the success of the brand in emerging markets."
Armando Branchini, chairman of luxury brands consultancy Intercorporate, praised Ferragamo's decision to hire Norsa "for a modern development" of a company with a "strong ownership." He said the move would give "a strong impulse" to Ferragamo because Norsa, in addition to his management skills, will contribute "his intangible assets: his sensibility when it comes to the style and DNA of a brand."
The company in January disclosed financial data, reporting consolidated net profits of 39.2 million euros last year, or $50 million, on a 12 percent hike in sales to 575 million euros, or $734.7 million at current exchange. Ferragamo also forecast double-digit growth for the year, citing strong momentum in the U.S. and Asia. Those results exclude the 2004 and 2005 sales at Emanuel Ungaro, which Ferragamo sold last year. The decision to sell money-losing Ungaro to San Francisco entrepreneur Asim Abdullah also will contribute to a smoother IPO.
The company has 450 sales points, 221 directly owned by the group. Store openings this year include a boutique at the NorthPark Center mall in Dallas and a unit in Beijing, and two Hong Kong flagships will be expanded. Ferragamo does 21 percent of its business in Europe and 26 percent in the U.S. Japan accounts for 27 percent of the total, and the rest of Asia contributes 23 percent. There are plans to open another five stores in China this year.
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