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Franchini’s Experience Aiding Bally Transition

LONDON — For Marco Franchini, building Bally’s business has brought on a serious case of déjà vu. Franchini, the newly appointed chief executive and chairman of the board at Bally International AG, is a former Gucci executive...

LONDON — For Marco Franchini, building Bally’s business has brought on a serious case of déjà vu. Franchini, the newly appointed chief executive and chairman of the board at Bally International AG, is a former Gucci executive — and he remembers how it feels to make an old brand young again.

“Bally today is facing some of the same problems that Gucci had nearly a decade ago,” said Franchini during an exclusive interview at the London headquarters of Texas Pacific Group, Bally’s parent. “For Bally, it’s a time of transition, of adjusting its position in the marketplace. One of the reasons I accepted the job was the thought that I’d been through this already.”

Franchini joined Gucci in 1994, serving first as European retail director, and then as general manager for Europe. And there is no doubt that he hails from the Domenico De Sole school of business. “I believe in clear approaches to problems, and of course, in the importance of following through. Like my old boss used to say: ‘Execution, execution, execution,’” he said, quoting the management mantra of Gucci Group’s chairman and chief executive.

However, Franchini won’t have a high-profile creative counterpart like De Sole has in Tom Ford. Franchini confirmed reports that Bally’s creative director Scott Fellows — the man who put the new creative imprint on the brand — would not return when his three-year contract expires at the end of this year.

“The show in Milan was our last collaboration with Scott,” he said, referring to Monday’s event where Fellows showed tailored, precision-cut leathers and skins paired with floaty chiffon dresses and skirts. “Scott defined Bally’s identity and gave us a base to grow from. His work and contribution to the company is not going to go away. It’s our job now to make a success of it. We’re going to leverage the new identity and focus on growth.”

Franchini said Fellows would not be replaced as creative director, but that Melissa Maish would take over as design and product director for women’s categories and Luca Ragonese would do a similar job for the men’s categories.

This story first appeared in the October 4, 2002 issue of WWD.  Subscribe Today.

In July, WWD first reported the news that Maish — formerly a freelance designer with Bally who worked closely with Fellows — would take on a greater role in the company. Ragonese was the former men’s fashion director at Ferragamo.

As reported, industry sources suggested that Fellows may have worked too quickly to rejuvenate Bally’s products — and alienated traditional customers in the process. Asked whether he would try to win back the old guard, Franchini said: “My explicit brief to Melissa and Luca was there were to be no dramatic changes — at least for the time being. But I do think that Bally has a great opportunity to grow in two directions, first by attracting a younger, fashion-conscious segment, and second with the loyal customer base. We need to give them a new reason to come to Bally. I think we can do that without compromising the new style.”

Footwear and accessories, he said, would remain at the core of Bally’s business. Footwear currently generates 50 percent of sales, followed by accessories with 30 to 35 percent, and licensed goods and ready-to-wear making up the remaining 15 to 20 percent.

On a more technical note, Franchini said that he would focus on fine-tuning Bally’s offering. “I want to see salable collections, improve the full-price sell-through and ensure that everything is merchandised properly.” He’s currently working on guidelines for visual merchandising, window programs and stock concepts.

He said that Bally would continue to mine its vast, and newly digitalized, archive for new ideas. For spring 2003, the company will be coming out with a new trainer with a version of the Bally family crest on the side, which looks like mountains with a sun or a moon rising over them.

While Bally is a private company and does not publish financial figures, Franchini said the 2002 budget was in line with projections, and that Bally would “at the very least, break even” next year. He said the company was expecting to turn a profit in 2004. Sources close to the company said TPG has invested $250 million in the Bally restructuring. Bally’s sales were $303 million in 2000, and were expected to grow to $364 million in 2001, the latest figures available. When TPG purchased Bally at the end of 1999, sales were approximately $500 million, but the company was losing money.

After three years of restructuring and repositioning at the company, Franchini said it was time to focus on growth. That will come, he said, from Bally’s new generation stores, improved logistics systems and a product offering that appeals both to Bally’s new and older customers.

He said that in 2003, the company would open freshly renovated stores in Beverly Hills and on Madison Avenue, and new stores in Hong Kong and Munich. Those stores will follow the template of the Berlin store which opened in the spring of 2001 and the Lugano store, which opened this past spring.

Franchini sees great potential for growth, both in the U.S. and Italian markets. To wit, he added that in Hawaii, Bally’s sales had risen 70 to 80 percent year-on-year in the first half. Wholesale distribution is also on the agenda. “Bally considers itself a luxury goods brand, and like the others, we want to be present in the major department stores,” he said.

He’s also proud of Bally’s new real-time global information system, which allows Bally employees to track the position, sales record, and other details of any Bally product around the world.

Franchini also glossed over the gloomy atmosphere in the luxury goods market right now. “We are all working and living in the same environment, and of course no one can disregard the atmosphere. But I am convinced of Bally’s potential and of the fact that we will be able to see measurable results in the short term. We’re going in the right direction. It’s an optimistic time for us.”