LONDON — It’s January, and everyone seems to be on a diet — especially in luxury, an industry that’s feasted for years and packed on the pounds. Some, such as Burberry, have been dropping weight longer than others, while Bally has become the latest brand to join the slimmer’s club.
On Tuesday, the leather accessories brand founded in 1851 said it was consolidating its operations, leaving its London office, where the creative, merchandising, marketing and communications offices are located, and moving everything to Milan and Caslano, Switzerland, where the product development and supply chain teams are based.
An in-house design team will succeed Pablo Coppola, who had been Bally’s design director since 2014. He left the company at the end of last year to pursue new opportunities and the team he built will take over.
As he seeks to expand the business, Bally’s chief executive officer Frédéric de Narp has created some new positions, and promoted from within, with the aim of knitting the creative, production and supply chain divisions closer together.
His goal is to pump up the women’s overall business, which represents just 37 percent of sales, with an eye to shifting the men’s/women’s ratio to 50-50 by 2020. Accessories currently represent 50 percent of Bally’s revenues, with shoes generating 45 percent, and ready-to-wear just 5 percent. During an interview this week, de Narp also admitted Bally’s rtw was “way too expensive” compared with women’s shoes and bags, which are pegged at entry-level luxury prices.
“We need to concentrate on accessories and we see a massive opportunity in shoes,” said the Frenchman, who arrived at Bally in 2013 after serving as president and ceo of Harry Winston Inc. and, previously, as president of U.S. operations at Cartier. In March, the company will also move to a bigger manufacturing facility in Tuscany, outside Florence. The new space will span 15,120 square feet, confirming the company’s “sustained investment” in the future of accessories, he said.
At Bally, most women’s shoes cost 500 euros, or $537, or less while handbags are in the 1,000 euro to 1,200 euro, or $1,073 to $1,288 range. Bestsellers include the Janelle loafer, a slim shoe with a fat buckle and a crushable back so it can also be worn as a slipper, as well as the Sommet B-Loved bag, a boxy, structured bag with contrast lining.
The plan is to build out women’s shoes, in particular, which he said are a much easier sell than men’s. He said that over the last four to six months the category has been taking off “aggressively,” and that women are far more receptive to buying new or different brands than men are. He said it takes “decades” to gain men’s trust and convince them to buy.
The new setup, including the move and the management changes, will lend “speed and agility” to the business, so it can be more reactive to market trends. “We need to be under the same roof, in the same hub, and creative needs to work hand-in-hand with merchandising. Today, we need to be quicker than the market,” he said. The office move is set for July.
While he called Coppola “instrumental” in building Bally’s design image over the last three years, he said that working with a “creative collective,” was a more modern way of doing things. That collective will be comprised of three design heads for shoes, accessories and rtw, working with a vice president of merchandising and fashion coordinator to ensure that Bally offers the “best product at the best price.”
This year will also see collaborations with other “brands and creators,” and capsule collections aimed at keeping the brand offer fresh — and the customer interested.
In some ways, the changes will take Bally back to its roots: The brand already has offices in Milan and Caslano (its longtime headquarters, and home of its large archive) and only recently opened the one in London after it was acquired by JAB, then known as Labelux, in 2008.
It also started life as a footwear brand — not a fashion one — and later launched accessories. Only under former owners Texas Pacific Group — at a time when everyone wanted to “do a Gucci” with the European heritage brands — did Bally experiment with creative directors.
Scott Fellows, now a furniture designer with a business based in New York; Brian Atwood, and the creative team of Michael Herz and Graeme Fidler all passed through Bally’s doors.
While he may be looking to Bally’s past, de Narp is also projecting the brand into the future: He’s created the new position of chief client officer, which will be filled by Antoine Auvinet, who will also be vice president of omnichannel. “The client has to be at the center of everything we do,” de Narp said.
In tune with so many brands — including fellow slimmers Burberry and Paul Smith — Bally will stage its first combined men’s and women’s presentation during Milan Women’s Fashion Week in February. The presentation will take place on Feb. 23 at the Biblioteca Nazionale Braidense at 28 Via Brera.
De Narp is also shunning the classic route into Chinese e-commerce with plans to launch a standalone Bally site by April. “We’re not going with Tmall, or Alibaba. We are so sure of our business model that we want to be on our own, control our image, our destiny, and ensure there are no fakes,” he said.
Mainland China is Bally’s largest market (it first entered the region in 1986) and the brand has 58 points of sale there, although de Narp said he plans to shave that number down to 45 as he seeks to rebalance the retail portfolio.
Meanwhile, the new David Chipperfield store concept is rapidly rolling out. There are 17 points of sale globally, with a total of 50 set to be open by the end of this year, including a flagship on Madison Avenue in Manhattan in April.
He said Bally’s revenue advanced 4 percent in fiscal 2016, with earnings before interest, taxes, depreciation and amortization doubling and cash flow tripling. Travel retail has been a powerful engine of that growth, with Bally now one of the top brands in terms of store numbers in airports.
The U.S., still an underdeveloped market for Bally, grew 10 percent last year, and de Narp said his goal is to triple the American business over the next five years.
The ceo declined to reveal the 2016 revenue figure, with all Bally accounts consolidated on JAB’s balance sheet in Switzerland. JAB purchased Bally from Texas Pacific Group for an estimated 600 million to 700 million Swiss francs, or $558 million to $650 million, and this week de Narp confirmed his original sales target for Bally of $1 billion by 2021.
All figures have been converted at average exchange rates for the years to which they refer.
De Narp appears to be striking all the chords for a luxury business that’s looking to keep up in today’s uncertain world. According to a list of 2017 trends published by the London-based eco-consultancy Positive Luxury, a brand’s authenticity, direct relationships with customers, and a rejection of conspicuous consumption will be among the top trends this year.