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PARIS — When Bernard Arnault said last week that he wanted to build Fendi along the proven path of Louis Vuitton or Christian Dior, the LVMH chairman wasn’t kidding.
This story first appeared in the May 21, 2003 issue of WWD. Subscribe Today.
WWD has learned that Sidney Toledano, president of Christian Dior and one of the chief architects of its current expansion drive, will assume a key role in developing the Fendi business, while maintaining his current post.
According to sources, Toledano will be charged with coordinating the strategy at Fendi and developing production and other synergies between the Rome-based house and Dior. The appointment is designed to bring more decision-making to Paris, and to exploit Toledano’s formidable expertise in handbags, small leather goods and footwear, which account for more than half of sales at fast-growing Dior.
Sources said Giancarlo Di Risio, Fendi’s chief executive, would now report to Toledano instead of a senior executive at LVMH Moët Hennessy Louis Vuitton. Since arriving at Fendi last year, Di Risio installed new management, industrial and marketing structures and set retail expansion and product expansion as key elements of the brand strategy.
Toledano and Arnault were in Asia Tuesday and could not be reached for comment.
But it’s clear that Fendi is a top priority for Arnault, who is eager to get a return on an expensive acquisition. LVMH recently paid $218.5 million for an additional 17.2 percent of Fendi, bringing its ownership stake to 84.1 percent at a total cost of $1.11 billion, as reported. It is believed that Carla Fendi, president and head of communications, is the only member of the family retaining shares, giving LVMH even more freedom to pursue a rejuvenation strategy without obstacles.
Last fall, at a Fendi news conference, Arnault boasted, “in two or 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.”
And last week, at LVMH’s annual shareholders’ meeting, Arnault gave plenty of airtime to Fendi, even giving a sneak preview of its fall advertising campaign featuring Linda Evangelista smoldering in poses reminiscent of Italian movie posters. Arnault also praised “the great designer Karl Lagerfeld,” Fendi’s longtime ready-to-wear designer, and vowed that Fendi would be “headed down the same road” as Vuitton and Dior.
Since arriving at Dior in 1998, Toledano and couturier John Galliano have built formidable buzz around the French brand, and developed products to match growing demand, especially in the high-margin accessories area.
Sales at Christian Dior Couture, which includes the couture, ready-to-wear and accessories business, rocketed 41 percent to $535.6 million last year. In the most recent quarter, sales vaulted 19 percent to $135.5 million, propelled in part by a 150 percent increase in sales of women’s footwear.
Market 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.