LONDON — Frédéric de Narp lives large: A long-married father of seven, he spent his career as a hard luxury man at Cartier and Harry Winston before changing tack and taking on the turnaround job at Bally, which is owned by JAB and is now looking for a new buyer.
Schooled in France, the Brittany native moved to Japan straight after gaining a master’s degree in international business. He immersed himself in the life there, learning the language, practicing martial arts and seeking to understand how the country so rapidly transformed itself from a war-ravaged nation into an economic powerhouse.
His first job at Cartier was in Tokyo, where he worked on the shop floor at the Ginza store. He later took on management positions with Cartier in Switzerland, Italy and Greece before becoming president and chief executive officer of Cartier North America, bringing much attention to that brand.
After leaving Cartier, he became president and ceo of Harry Winston, helping to engineer the sale of the company’s watch and jewelry business to The Swatch Group for $1 billion in 2012.
He joined Bally in late 2013 with the aim of revitalizing that company after years of unclear branding, unfocused marketing and spotty sales growth. He readjusted Bally’s positioning, drafted David Chipperfield to refurbish the store portfolio, put a bigger focus on women’s and set out to appeal to a younger audience.
While he hasn’t reached his goal of $1 billion in sales, he’s getting there. “I’m a billion dollars guy,” said de Narp, who has boosted sales, gotten Bally back into the big multibrand stores, and piqued the interest of a new generation.
It’s now up to de Narp to help secure the company’s future owner. As reported, Bally is working with Bank of America Merrill Lynch and Citi, the two banks that are also helping its sister company Jimmy Choo find a new backer after JAB put its fashion operations on the selling block.
De Narp spoke to WWD from his sunny office in London’s Victoria, a location — and city — he’ll shortly be leaving as he prepares to move the company to Milan as part of a cost-cutting and efficiency program that he outlined earlier this year. In many ways, it’s a move back home as Bally’s roots have always been in Caslano, Switzerland, not far from Milan and, going forward, staff will work between the two hubs.
Here, de Narp talks about his plan of attack for Bally and the people who’ve inspired him.
WWD: Bally is one of many European heritage companies that have been resizing themselves for the new normal of slower growth and geopolitical uncertainty. Where do you see the market going, and where are the big avenues for growth?
Frédéric de Narp: I think the market is in a very good place — for different reasons. The population is growing, there is GDP growth and there is the phenomenon of urbanization that is creating a massive middle class. If we take China, just China, the high-end middle class will grow by 9 percent every year until 2030. Ultimately, human beings are in love with beautiful things. There is massive space for growth, whether it’s in art, luxury, craftsmanship or recognition of quality. All of those elements combined ought to bring about successful growth for the luxury industry.
It won’t work for everyone, however. My expertise is in heritage brands. And those brands have a massive opportunity — more than ever. Millennial values are about authenticity, transparency and fairness, but the condition is that you talk to them in an inclusive way. Millennials are the future of the industry: They represent 27 percent of luxury today and will represent 40 percent of it 10 years from now.
WWD: Where else will your future revenue come from?
F.D.N.: The most important growth that we have seen in the industry in the last five years — and in the next five years — is in accessories. Bally was born as a shoemaker, and we’re probably the only shoe company to do more than 50 percent of its business with accessories. Every shoemaker dreams of doing more than half of their business in accessories, and 53 percent of my business is accessories, not shoes: 44 percent is shoes and the rest is ready-to-wear. Travel retail and tourism are also strong. Bally is the number-two brand in the fashion industry in terms of presence in airports today. We have 137 locations. Ferragamo is the number-one brand.
WWD: What kind of potential do you see in travel retail?
F.D.N.: I’ve put my full energy behind it. We doubled travel retail in 2014, and I am looking at the numbers of Chinese traveling around the world. In 2000, you had 30 million Chinese traveling; In 2015, the number was 120 million. The trend is expected to be 240 million to 260 million by 2030. When the Chinese travel, their proportion of spending is the highest among all the populations.
WWD: In January, you laid out your strategy for a leaner, more efficient Bally. You’re closing your London headquarters and moving all operations to the continent soon. How is that going to help day-to-day business?
F.D.N.: It has been painful working with three headquarters: Caslano, Switzerland; Milan, and London, so the fact that we’ll all be moving to a single hub in Milan is going to mean a massive acceleration in production. We won’t lose time and money by constantly transporting samples between every country, a slow process. We’ll accelerate newness because we’re all going to be in the same room.
WWD: How would you use the money from a new owner?
F.D.N.: At the end of 2016, I had 17 David Chipperfield stores and at the end of this year I will have 55. A new owner and shareholders could help us accelerate the refurbishment of all our stores. These stores bring a mix between men’s and women’s wear that is so much more balanced. Investors could also bring more backing and support — but not financing — because for the first time in many years we are not eating up our cash flow, which feels good. Starting this year we are not burning cash. We just have to execute our very clear strategy now. We’re going to offer 40 to 50 percent fewer products. It’s not about producing tons of product and seeing what sticks to the wall — it’s about having the client understand what you stand for. We have already massively reduced the cost of goods. We know where we’re going, and the price points have been clarified for the next five years. We know where we want to play.
WWD: How big can Bally get?
F.D.N.: I always said this brand was a billion-dollar brand. I don’t know if it will be sold for one billion — it would be absolutely premature to say such a thing — but that’s my target, ultimately, before the end of the decade, to reach a billion dollars for this company.
WWD: Bally has been through so many designers, creative directors and brand iterations over the years, and that has no doubt been confusing for customers. How do you want people to see Bally today?
F.D.N.: We’ve clarified the brand positioning around what we call happy luxury, and that’s about touching the hearts of Millennials. Bally is authentic, but it’s also a brand that’s optimistic, energetic, approachable. It’s not red carpet, it’s urban and casual. There’s no element of bling-bling. It’s accessible luxury with a fair price point.
We have a new collaboration, an homage to Bally’s heritage and the hip-hop community. In the Eighties and Nineties, we were the hottest brand for the hip-hop community in America. Back in the day, in America, more than half of our shoes were sneakers, so this collaboration relies on the urban connotation and interpretation of the brand during this moment of glory in the Eighties. [Bally has recently joined with the music producer, Swizz Beatz, on a collection of accessories and ready-to-wear designed by the Spanish artist Ricardo Cavolo.] The brand has also collaborated with some of the most powerful people in the world — Robert Mallet-Stevens and Le Corbusier.
WWD: Bally is the first soft luxury brand that you’ve headed. Before that, you were working at Harry Winston and Cartier. How difficult was the transition from hard luxury?
F.D.N.: They are all brands with the same fundamentals and they’re anchored in craftsmanship and quality. They also want to conquer a younger audience. That’s a big thing. My whole mission at Harry Winston was to really go after a younger clientele, and that’s the same at Bally. In terms of management it’s exactly the same, too. It’s about being the conductor of an orchestra where each of the musicians is the best at their instrument. I’m also talking to the same editors, magazines and community now as when I was at Cartier and Harry Winston. I’m also talking to the same store landlords and the same property owners.
What is different is the frenzy of creativity that’s required in fashion. It is so exciting, you can never sleep. The rhythm, the pace of creativity in fashion is frenetic, it’s amazing. All of that helps you to take more risks. The value of each item is lower, so in terms of cash flow management, if you want to take a risk on a collection, and it doesn’t work, it’s no big risk for the company. In hard luxury, the pace of creativity is much slower and you cannot take any risks. If your entire collection, made from platinum and diamonds, is not the right one, you eat it. It’s a huge burden in terms of cash.
WWD: How does your strategy for Bally differ from what you were doing at Harry Winston?
F.D.N.: Winston is the ultimate aspirational luxury brand. When I entered Bally, it was trying to be an aspirational luxury brand, but it didn’t have the correct credibility or brand recognition. The most important clarification I brought to this company is that Bally is not an aspirational luxury brand, Bally is an accessible luxury brand. You have to be honest and true, and when you clarify that and align the entire engine of the company to that position, that’s when everything comes together. Bally has an entry luxury price point, so you cannot have a ton of crocodile bags in the store windows next to sneakers that cost 250 euros. Bally had failed to clarify its position for 20 years in a row. That created a massive confusion in the supply chain, the store experience, the hiring of people. When we clarified that once and for all, it was like, “Sésame, ouvre-toi,” (Open Sesame). Every brand has its own DNA and you need to understand it.
WWD: How would you gauge your success so far in turning around Bally?
F.D.N.: The first confirmation of the turnaround of any company in the fashion industry comes from wholesale. If the stores buy your product, it’s because they believe it’s the future. For fall, I was superexcited as we were up 12 percent season-on-season, so it’s finally coming together. Our spring 2018 selling campaign is up 19 percent season-on-season. For the first time, the multibrand stores that kicked out Bally years ago are coming back. Stores including Neiman Marcus and Selfridges. Bally is having an extraordinary comeback.
In the women’s segment we are seeing growth of more than 41 percent in spring 2018 compared with last year. I had a plan of attack on the women’s segment from the beginning. For me, it was essential. When I started at Bally, 70 percent of the business was men’s, while women’s wear was something like 28 percent. Now women’s is already 37 percent. For autumn, the trend is double-digit growth.
The women’s segment at retail is plus 32 percent, while for men it’s flat. We’re preserving our men’s positioning, which is really important because for men’s. It takes decades and a lot of communication to convince that you are the right brand. We are the right brand and we’re also approaching a much younger clientele with sneakers and backpacks and the urban trend that we see everywhere.
WWD: You were talking before about being a brand’s “orchestra conductor.” How do you manage your teams?
F.D.N.: My management style is very much inspired by Japan. I was 17 when I decided I was individualist — because I’m French — therefore I needed to plug into my brain the ability of Japanese people to work in a group. I decided to do a Master’s degree in international affairs, and I specialized in Asian business and I learned Japanese. My first work experience was in Japan. I wanted to learn everything from them. The country went from being erased from this planet in 1945 to becoming the second [economic] power [by the Sixties]. I was amazed by these people. I breathed Japan. I even did martial arts. My family was intrigued.
WWD: How would you describe your management style?
F.D.N.: Cocreation, a combination of the values of individualism and group work. It’s collective entrepreneurship, and I think it’s why people follow me and why I work well with people. It’s because I trust them. It’s all about trust and making sure they are better than I am. I need to admire the people I work with directly. I need that. This admiration creates a certain respect which engenders trust. Then comes my job of conducting the orchestra. I might not be able to play any of these instruments at all, but the clear combination of all of them is like a perfect sound.
WWD: Who are your mentors?
F.D.N.: Bernard Fornas [the former Cartier executive who recently retired as coceo of Compagnie Financière Richemont]. He showed such strong leadership, a clear vision and was capable of leading the troops. I was an intern at Guerlain when he was international general manager there. We later connected at Cartier, and he has been my mentor for many years. He does not have the same kind of management style, but he’s a very strong leader and very inspiring.
My other mentor is not a business one. It was Elie Wiesel [the Nobel Laureate, writer and Holocaust survivor]. He was one of my best friends, and I’m still on the board of The Elie Wiesel Foundation for Humanity. Elie was this inspiring person who I went to see a few times a month. He always supported me, and he would always tell me to “think higher and feel deeper.” He would challenge me never to let go and always to do more.
I remember a time when I was tired, I was exhausted, I was on the board of different charities, and it was way too much. I was expecting him to tell me, “Frédéric, don’t do everything. Less is more.” But he actually said to me, “Frédéric, do more.” He told me that I needed to give back, that we need to give our maximum. That “do more” inspired me, and it was a defining moment in my life. This man inspired me to do more, and next thing you know, I had seven children and a life around the world.