MILAN — Furla continues to grow rapidly after a record-breaking 2016, but it’s postponing its plans for an initial public offering.
“We need to strengthen our manufacturing and we have no need to raise cash,” president Giovanna Furlanetto told WWD.
Furla produces 2.5 million bags yearly and it is working to increase production by 500,000 units. While the focus is on the premium market, Furlanetto said she plans to introduce a collection of higher-end bags made with vegetable-tanned leather and retailing at between 400 and 600 euros.
In May 2016, after years of speculation, Furla said it had set in motion plans to go public, inking an agreement with TIP Tamburi Investment Partners SpA. The Marzotto, Loro Piana and Ferragamo families are among the investors in TIP, which also has stakes in Hugo Boss and Ferrari. In 2013, TIP invested in Remo Ruffini’s holding company, Ruffini Partecipazioni, indirectly buying a stake in Moncler, which went public at the end of 2013. Tamburi had tentatively set the IPO for 2018, depending on market conditions.
The delay in any IPO was revealed as the Italian accessories group said sales rose 23.5 percent in the first half of 2017 to 238 million euros, compared with 193 million euros in the first half of 2016. At constant exchange, sales rose 22 percent. Even Furlanetto admitted the growth was “unexpected” on top of a record-breaking 2016.
In the first half, the Asia-Pacific region registered a 63 percent jump in sales. In particular, China, where the company has 43 stores, reported strong expansion and like-for-like double-digit growth. Similarly, South Korea and Australia showed “extraordinary results,” said chief executive officer Alberto Camerlengo.
“Asia is growing and it’s a healthy market, we sell full price, it’s not a market of discounts,” Camerlengo observed.
Furla entered Australia three years ago and has just expanded its store in Westfield in Sydney with a 80-foot facade. Sales in this region were up 64 percent. “Five-star partners and five-star locations are key,” Furlanetto said.
He said the company is reevaluating its partnerships globally, pointing to a new partner in Thailand, for example, where Furla has inked an agreement with Pacifica Group, succeeding longstanding partner Central Group, and in India, working now with Reliance Industries. The company is now directly managing Portugal’s web of seven stores after 18 years with a partner, said Furlanetto, and revamping them all.
The retail channel accounted for 65 percent of sales in the period. As of June 30, the company had 444 stores, of which half were directly operated. This is the same number as at the end of December, but the company has closed 24 units and opened 24, in an effort to upgrade its network and expand square footage of the stores. Like-for-like sales were up double-digit. “We are seeing more units per transaction, with the new categories that we are introducing — eyewear, watches and textiles,” Furlanetto said.
Camerlengo remarked on the growing success of the men’s division. In Asia, in particular, it was up 133 percent. In the region, nine men’s travel retail points of sale just opened with the fall season and an additional seven units will bow for spring. Of these, two are in the U.S., in Philadelphia and Dallas, and one in T Galleria Guam. Furlanetto revealed that, in February, the company will start showing the men’s and women’s categories together, foregoing Pitti Uomo in January.
In the first six months, Japan and the Europe, Middle East and Africa region were each up 16 percent while the U.S. reported a 3 percent gain in revenues. “This is a healthy growth, without discounts,” said Camerlengo, noting that the company has stopped selling on Amazon to focus on full-price business.
The EMEA region, including Italy, represented 45 percent of sales; Japan 24 percent; the Asia-Pacific region 24 percent, and the U.S. 7 percent.
The travel retail sector also expanded, growing 47 percent and leveraging a total of 292 points of sale between boutiques, corners, shops-in-shop, in-flight and cruises.
The brand is available in more than 100 countries and is carried by 1,200 multibrand and department stores.
The group has recently unveiled new boutiques in London on Brompton Road and in Amsterdam on PC Hoofstraat. Other openings are expected by the end of 2017 in Hong Kong, Beijing, Tokyo and Prague. Furlanetto said the plan is also to enter Canada and New Zealand.