MILAN — Italian quality and craftsmanship are fundamental assets for the country’s luxury goods firms, but the stock market is now viewed as a top option for growth, according to entrepreneurs including Remo Ruffini, Brunello Cucinelli and Lapo Elkann speaking at the sixth edition of the Luxury Summit here Wednesday.
“The final consumer is our majority shareholder, but going public was the natural path for us,” said Ruffini, chairman and chief executive officer of Moncler SpA, which started trading on the Italian Stock Exchange in December.
As he urged executives to always stay true to the brand, Ruffini also advised his peers to strategically look at a period of three to five years. “You can’t be influenced by the quarterly performances,” he said at the conference, which was organized by Italian daily Il Sole 24 Ore. “The shares will follow the value of the company.”
At the same time, Ruffini believes in quick decision-making to update the company’s strategies on a daily or weekly basis to react to market changes. He cited, for example, the newfound strength of the American market — a leitmotif at the summit. Ruffini dismissed the cyclical economic crisis and geopolitical unrests, while conceding some concerns over Russia. Hence the brand’s increasing internationalization for “risk diversification.” The priority, he said, continues to be “to create a dream.”
Elkann, chairman of the Italia Independent group, echoed Ruffini. “We must succeed in making our customers dream,” he said. Elkann explained that he turned to the Bourse in June last year to maintain the company’s independence, which he said was “essential.” Private equity firms are looking for a quick return, and they “squeeze the lemon” to that end. “I fully respect those who choose otherwise, but this was not our path,” said Elkann, praising the stock market for helping to expand faster around the world and bring order and discipline to the company.
“I would rather be a small fish in the ocean than one in the kiddies’ pool,” said Elkann to a round of chuckles. “The Bourse was the best decision we took, and it helps our credibility.”
The young entrepreneur had a bone to pick with the Made in Italy term, which, he said, “has been abused and is now obsolete.” He prefers what he calls the “three Cs” — created, crafted and conceived. “It has more power and draws more respect. ‘Made in’ does not have all those values.”
He concluded that his own “dream and objective is for the company to become one of the most innovative in the world.”
Cucinelli, founder, chairman and ceo of his namesake firm, shared the sentiment and optimism of the others. “This is a magic moment. The world is fascinated by our Made in Italy products, and I see an economic and spiritual renaissance,” said Cucinelli. The Italian luxury brand went public in April 2012 and the entrepreneur couldn’t be happier about it, he said. “I had been thinking about it for three or four years and it’s doing very well now. We’ve opened up to the world.”
Cucinelli said he did not agree with a number of new definitions of luxury, which he believes must always be “special and exclusive,” and not overdistributed. “You can’t speak of superluxury or of accessible luxury.”
Footwear designer Giuseppe Zanotti was also upbeat, following the sale of a 30 percent stake in his firm, Vicini, to the LVMH Moët Hennessy Louis Vuitton-backed L Capital Asia and L Capital Management funds in December. The partnership, he said, allows him to focus on his designs. “I am very happy and they let me work freely,” said Zanotti. “Maybe an initial public offering could take place in a second phase.”
Elaborating on the strength of the U.S. market, Antonio Achille, partner and managing director of the Boston Consulting Group, said that, in the next 10 years, America will be the first market for the luxury sector. “There is still much growth potential for luxury in the region, where it is still very much connected to the automotive industry,” said Achille. While even wealthy Americans “remain bargain seekers,” Achille also sees business potential in second-tier cities in the U.S. and in the growing number of Brazilian and Chinese tourists.