By  on January 17, 2006

NEW YORK — Newly opened after an eight-month renovation, the 3,000-square-foot Bally flagship here is a symbol of the company's new direction. The collections are tightly edited, with a balance between classic and modern designs; the space is spare but not austere.

The store, at 628 Madison Avenue, is a prototype for future redesigns. Groupings of low white bouclé couches and leather coffee tables beckon as conversation areas. The furniture — along with brown glass wall panels, brown velvet rugs, vitrines and shelves of oak and walnut, and wood vases — create a warm, lounge-like environment. Sales at the Madison Avenue store are expected to increase 40 percent.

"We shrank down our collection," said Marco Franchini, chairman and chief executive officer of Bally. "Our margins have improved. We're selling a lot more at full price."

When he joined Bally in 2002, "the company was losing money because there was a lot of spending on image," said Franchini, who was then general manager of Gucci Europe. The brand's creative directors, he said, were more interested in promoting themselves than promoting the brand. One of the first things Franchini did was fire the creative directors and hire design teams. "Now we're ready to invest again in communications," he said.

Bally is focusing on three concepts: nature, craftsmanship and heritage. The brand, which is based in Caslano on Switzerland's Lake Lugano, has an affinity for nature and created the first shoes that were used to climb Mount Everest.

An example of the company's commitment to craftsmanship, Franchini said, is Bally's redesigned men's wingtip shoe, which requires 250 steps to make. There's a free repair service, which entitles owners to have the shoes refurbished once a year.

Although Franchini said, "We revamped a very dusty brand," he doesn't want to distance the company from its roots – Bally, after all, was the first luxury brand in the world when it was introduced in 1851 — hence the decision to include "Since 1851" in advertising and products. The phrase is a tag line for ads, appears on hardware for handbags and is embossed on the the innersoles of shoes. The original Bally family crest has been taken out of retirement and appears on tote bags.There are other links to the past. The Trainspotting group of handbags and shoes features leather and grosgrain striped ribbon, underscoring Bally's start as a ribbon company. Double D, a line of handbags, is considered a classic with its rounded hardware. These signature styles are punctuated by unusual pieces such as a black leather evening bag dotted with turquoise stones, $795, and a pair of boots covered in a patchwork of suede shapes and flowers, $1,235.

Franchini said the company's customer base is divided evenly between men and women. Over the years, as Bally has experienced ups and downs, the male clientele has been more supportive. "Bally has gone through so many faces in its life," he said. "Women are less loyal."

Ready-to-wear, which has the highest sell-through in the store, accounts for only about 10 percent of sales. Shoes represent 50 percent and accessories, 40 percent.

"We think of rtw as an accessory to the accessories," Franchini said. "We wanted to revamp our core business first. Once we become strong with our core products, we can do rtw in a big way.

"We have a very efficient machine," he said. "This will be a pivotal year where we feel confident to expand and communicate the image of our product. We have a strong opportunity in our three traditional categories: footwear, accessories and rtw."

To celebrate the reopening, Bally next month is planning a retrospective of 100 shoes taken from its archives. In addition, four archival shoe designs from the Thirties and Fifties will be reproduced in limited editions, signed and numbered like lithographs. All have handmade details such as hand-knitted paillettes, leather piping, perforated leather and other stitching techniques.

Bally, which broke even in 2004 after losing money for 15 years, finally has the luxury to invest in its business. Global sales increased between 15 and 20 percent in 2005, from 345 million euros to 360 million euros, or $419 million to $437 million at current exchange, and a similar target is set for 2006. The improvement hasn't escaped the notice of Texas Pacific Group, which purchased Bally in 1999 and supports the store openings, renovations and an advertising budget for 2006 that's four times last year's.Bally opened stores in Las Vegas and Los Angeles and renovated a unit in Costa Mesa, Calif., last year. A unit in Ala Moana Center in Honolulu is opening at the end of the month. Stores are slated to open this year in Boston, Waikiki and Las Vegas, where a second unit will bow at the Fashion Show Mall. Still on the agenda: finding locations in Miami, San Francisco and Chicago.

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