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Reinventing Valentino

<CS:BOLD>MILAN -- "Valentino is a brand destined to live," states Fabio Giombini, chief executive of the luxury goods company. "The label is still vital and is looking for new ways to appeal to a new and younger customer."<BR><BR>While the fashion...

MILAN — “Valentino is a brand destined to live,” states Fabio Giombini, chief executive of the luxury goods company. “The label is still vital and is looking for new ways to appeal to a new and younger customer.”

While the fashion industry speculates about the company’s possible new owners, Giombini said he was satisfied with what had been achieved in the past two years. In 1999, company sales were $90.5 million, rising to $137.1 million in 2000 and by an estimated 10 percent last year. While in 1999 royalties accounted for 59 percent of sales, and for 32 percent in 2000, they accounted for only 14 percent of sales in 2001.

“Though we’ve cut royalties, increased costs and faced a very difficult market, we’ve focused on retailing, successfully launched Valentino Roma, increased our accessories business and estimate a double-digit-percent growth in sales for 2002,” he said in an exclusive interview with WWD at the stately Valentino Milan offices.

Giombini did not deny it had often been hard to work with all the rumors concerning the future of the company. “The situation [the sale of the fashion division by current owners Holding di Partecipazioni Industriali] could have been handled in a more discreet way and everything has been amplified by the press because of the type of shareholders [which include Italy’s Fiat],” said Giombini, pointing out that it was sometimes hard to create a long-lasting, trustful relationship with distributors.

“There were also incredible rumors made up by the press about the contract between Mr. Valentino Garavani and HdP — personal vacations paid by the company, out-of-this world payments — these were all inventions,” said Giombini.

Giombini, however, said that he registered “no difficulties in the daily management and no specific slowdown of activities.”

He reiterated that Valentino Garavani is still very much involved in the company and has no desire to give up his metier. “He sold the company to focus on design and to slow down his daily activities, but he still wants to have his say,” said Giombini. Valentino’s contract with HdP expires in 2003.

Future projects include the launch of jewelry, watch, innerwear and beachwear collections and a home accessories line in 2003, which will most likely be licensed. The company has cut its licenses from 50 to five. The remaining ones include: Unilever for fragrances; Safilo for eyewear; Ratti for ties and scarves; Hemmond for its denim collections.

“The only license we added in 2001 is with Ciwifur for our furs,” said Giombini, adding that the company has registered a 30 percent increase in sales for these licenses. “Each company should maintain its own DNA, and ours is ready-to-wear. Some companies grow through acquisitions, others through their labels. We have decided to focus on our label.” Giombini said the company has also been focusing on retail, with plans to open a store in Las Vegas in the second half of 2002 as well as other boutiques in France, Spain and the U.K. In total, there currently are 19 owned boutiques in the world and 15 franchised stores. In Japan, there are four brand stores and 17 shop-in-shops opened with a local exclusive partner. Through a joint venture, Valentino also opened two boutiques in Hong Kong and one in Singapore last year.

In the U.S., there are also stores in New York, Palm Beach and Los Angeles and a franchised store in Naples, Florida. “Sales in the U.S. were up 15 percent before Sept. 11. In the worst period, after the attacks, our New York sales dropped 40 percent,” said Giombini, adding that sales did pick up at Christmas. The U.S. accounts for 36 percent of sales and is the company’s second market after Italy and followed by France.

In the Via Montenapoleone store in Milan, which was renovated and reopened in September, Giombini said sales grew 50 percent.

Giombini said he was satisfied with the performance of Valentino Roma, launched for spring-summer 2001. “We reached sales of $34.7 million in one year, in line with our estimates” he said. “There is a market for this line. It’s the Valentino world, for its quality and details, but it is more for daywear compared to the Valentino line.”

In the U.S, Valentino Roma is available at Saks Fifth Avenue, Nordstrom and specialty stores. While there are 120 Valentino sales points in the world, the company aims at 350 to 400 sales points at the most for Valentino Roma.