"The restructuring is over. We’ve laid the foundations, and now we are ready to attack," said Giancarlo Di Risio, chief executive officer of Fendi, in an exclusive interview last week. The tactics he plans to use, however, involve those products most women would covet, like furs and exquisitely crafted handbags.
Just eight months into his post, an upbeat Di Risio says Fendi now has a new management, and a new industrial and marketing structure.
"I am confident we can grow and see profitability next year," Di Risio said.
The primary strategies by which the company hopes to move into the black include an aggressive retail expansion, beefing up its men’s collection, taking over its licensing and expanding its core accessories and fur divisions.
He also denied that there were any troubles with Fendi family members, either among themselves or with the new management.
Although Di Risio could not break out 2001 financial figures, because it is majority-owned by LVMH Moët Hennessy Louis Vuitton, sources estimate Fendi had a net loss of $18.9 million last year on sales of $250.5 million and a debt of $189.1 million. (Dollar figures are converted from the euro at current exchange rates.)
But Di Risio’s optimism echoed that of LVMH chairman Bernard Arnault, who said at a news conference Sept. 12 that he believed "in two to three years…we can replicate at Fendi the success we had at Dior. Fendi will become the leading Italian fashion brand within the next five years."
Prada and LVMH acquired 51 percent of Fendi in 1999. In November, Prada chief Patrizio Bertelli, sold his own 25.5 percent stake to LVMH.
Industry gossip at the time said there were too many cooks in the kitchen, and that Fendi was not changing its course in any significant way after the sale. This summer, Franca Fendi, one of the five sisters who inherited the company from their parents, founders Adele and Edoardo Fendi, sold her 15.9 percent stake to LVMH, which now owns 69.9 percent. Franca Fendi is not involved in the business anymore. The remaining shares are held by Franca Fendi’s sisters, Paola, Carla, Anna and Alda.During the interview, Di Risio set the record straight about constant industry talk of squabbles between the Fendi sisters, their offspring, who held various posts within the company, and the new owners. "There is absolutely no truth to any friction," Di Risio said. "Over the past few months, we’ve serenely clarified roles and duties, and the relationship is very good. The sisters guarantee continuity and they share the [aim] to develop the company."
Carla Fendi is president of the company, and is in charge of its communications. Paola Fendi, the eldest, is a shareholder, but relinquished all management responsibilities in 1999, when LVMH and Prada took control. Alda Fendi is a shareholder and board member. Anna Fendi is responsible for the research of couture furs. Her daughter, Silvia Venturini, is creative director.
Di Risio described Karl Lagerfeld, Fendi’s women’s wear designer, as "the creative soul" of the company.
This month, the historic Via Borgognona store in Rome is reopening as a veritable atelier, where made-to-order furs and accessories will be available, the only Fendi store in the world that offers this kind of service.
In an effort to strengthen its men’s unit, industry sources say one of Prada’s men’s wear designers, Gianluca Lera, was tapped by Fendi to expand the division and work with Venturini. Although Di Risio would not comment on that, he said the company "now has a strong international team, a new structure with new people in all departments, from marketing to retail."
Di Risio conceded that some employees had been let go, confirming reports circulating earlier in the year, but added that "many new heads" have joined the company, given its new shape. As reported, Fendi bought back all but six of its 20 licenses in the past year. Fendi has taken design and production of its shoe line in-house and plans to relaunch the line for fall 2003.
Di Risio said the company was restructuring its American business as well, and had appointed François Cresspresident of Fendi USA this month.
"We plan to restructure and expand our New York boutique by the end of next year," Di Risio said. There are 10 branded boutiques in the U.S. The ceo also said Fendi plans to roll out a series of new corners in department stores in the U.S. and around the world, mirroring Fendi’s store concept. Last spring, Fendi opened corners at Selfridges and Harrods in London and at Galeries Lafayette in Paris."Retail and wholesale volume each account for 50 percent of revenues, but we want to develop our business so that retail will be more significant in the medium-to-long term," Di Risio said. Fendi also plans to restructure its Tokyo boutique by the end of next year and its Milan store in 2004.
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