Bally Resort 2017

LONDON — Bally is streamlining its structure, with plans to move out of London in July, consolidate its operations in Milan and Caslano, Switzerland, work with an in-house “creative collective,” of designers and create a management structure that puts the customer at the center of the business, WWD has learned.

Frédéric de Narp, Bally’s chief executive officer, said in an interview the decisions were about creating “speed and agility” in the business, and being 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.

He confirmed that Pablo Coppola, who had been Bally’s design director since 2014, left the company at the end of last year to pursue new opportunities. Bally will continue to work with the in-house creative team that Coppola put in place, and de Narp said the designer had been “instrumental” in the development of the Bally collections.

Bally’s merchandising, creative, press and marketing operations are based in London, with product development and supply chain located between Milan and Caslano.

Pointing outside the glass walls of his office to the fog hanging thickly over London’s Victoria neighborhood, de Narp said days are lost with samples having to travel back and forth to the continent, while a clutch of Bally staffers was already late arriving in London on the day of the interview due to flight cancellations from the fog.

Bally’s historic home is in Caslano, about an hour from Milan. Before it was purchased by current owners Joh. A. Benckiser, or JAB, which was formerly known as Labelux, it was based between Milan and Caslano. It moved to London after JAB leased much of the building at 10 Howick Place, the London headquarters of JAB and one of its other holdings, Jimmy Choo.

Bally is the latest in a string of big European luxury brands to consolidate in a fast-moving — and unpredictable — market, with tourist flows hostage to terrorist attacks, currency fluctuations and customs regulations.

Although Bally positions itself as an entry-price luxury brand — with many women’s shoes styles costing less than 500 euros, or $537 at current exchange, and handbags in the 1,000 euro to 1,200 euro, or $1,073 to $1,288, range — it is feeling the sea changes sweeping over the industry.

In November, Compagnie Financière Richemont’s owner Johann Rupert whittled down the management structure at the parent of Cartier and IWC, as the group adjusts to the “new normal” of slower growth in the luxury watch industry.

Burberry Group is looking to save 100 million pounds, or $124.4 million, by 2019, and has slashed the number of products it offers. It is increasingly cultivating the local consumer, rather than the tourist, and seeking to convert digital “likes” into sales.

Other brands that are reorganizing include Paul Smith, which has also downsized the number of labels it offers and shut press offices. Like Burberry, Smith has also opted for co-ed shows, with his first one taking place earlier this week at the École Nationale Supérieure des Beaux-Arts in Paris.

As reported, Bally will stage its first combined men’s and women’s presentation during Milan Women’s Fashion Week in February. It will take place on Feb. 23 at the Biblioteca Nazionale Braidense at 28 Via Brera.

De Narp has also restructured the management team, promoting from within the company and creating the position of chief client officer, which will be filled by Antoine Auvinet. Auvinet will also be vice president of omnichannel.

Bally chief executive officer Frédéric de Narp

Bally chief executive officer Frédéric de Narp  Courtesy

De Narp has named Nicholas Girotto as the sole chief operating officer, another new role. Under the new structure, Girotto will directly oversee the heads of shoes, accessories and logistics. De Narp has also named heads of retail, wholesale, merchandising and fashion, all with an eye to knitting together the creative, supply chain and merchandise functions.

Asked whether the reorganization had to do with sluggish sales growth, he said Bally’s revenue advanced 4 percent in fiscal 2016, with earnings before interest, taxes, depreciation and amortization doubling and cash flow tripling. He also denied that his decision to move out of London was a result of the Brexit referendum, which will most certainly cast a pall on British businesses looking to trade internationally.

De Narp declined to give a revenue figure for 2016. All Bally accounts are consolidated on JAB’s balance sheet in Switzerland. In 2008, JAB purchased Bally from Texas Pacific Group for an estimated 600 million to 700 million Swiss francs, or $558 million to $650 million, and de Narp confirmed that his original revenue target of $1 billion by 2021 still stands.

All dollar figures have been converted at average exchange rates for the periods to which they refer.

De Narp said there is much work to be done: He wants women’s wear to play a bigger role in sales. Today, it represents 37 percent of the business, with the balance making up men’s, and he wants the number to be 50-50 by 2020. The executive also wants to triple the U.S. business over the next five years, and plans to open a Madison Avenue flagship store in April, which is 4,320 square feet.

Accessories generate about 50 percent of the business, with shoes at 45 percent and ready-to-wear, 5 percent. mainland China remains Bally’s number-one market, with 58 points of sale, although he plans to whittle that number down to 45, and the plan is to develop Japan further. In the U.S. and Europe, Middle East, Africa region, Bally plans to be a fully omnichannel business in six months’ time.

In March, the company will also be moving to a bigger manufacturing facility in Tuscany, Italy, outside Florence. The new space will span 15,120 square feet, confirming the company’s “sustained investment” in the future of accessories.