LONDON — Michael Russo, 37, chief executive officer of Ralph & Russo, has been speeding like a Formula One racer ever since he and his fiancé — and fellow Australian — Tamara Ralph founded their fast-growing couture house in 2007.
Now he’s taking it up a gear.
A serial entrepreneur, the youthful, soft-spoken Russo has presided over the rapid expansion of the London-based company, which will debut its ready-to-wear collection on Friday at Old Billingsgate Market, on the first day of London Fashion Week.
The brand, which already shows its couture collections in Paris, has clients ranging from Angelina Jolie — one of the label’s earliest adopters — to Beyoncé, Fan Bingbing, Sonam Kapoor and lesser-known women in markets such as the Middle and Far East and North and South America.
The brand sells couture through its showrooms in London and Paris, and offers accessories on its e-commerce site. Harrods is the only department store that stocks the label, selling a selection of designs that Ralph & Russo will customize.
Russo said the firm is witnessing triple-digit revenue growth year-over-year and he’s targeting revenues “into the billions” over the next five years as the company expands its product offer and sets an ambitious retail course.
Profits are funneled back into the business and the brand has also had help from a backer. Three years ago, Ralph & Russo sold a minority, non-controlling stake to John Caudwell, the British mobile phones billionaire and philanthropist in a deal that valued the company at more than 200 million pounds.
Russo and Ralph appear to be living a fairy tale — but Russo would argue their dream has always been made more of grit than glitter. They and members of their staff criss-cross the globe year-round tending to clients, and the duo said they have always made service a priority.
Each Ralph & Russo client gets a dedicated customer service team to deal with day-to-day requests, and staffers have sometimes helicoptered onto yachts — or into other far-flung locations — for fittings if the client can’t make it to the company’s Paris or London showrooms.
“With couture, it’s not that we’re doing anything differently. We’re not reinventing the wheel. I say to the team that there are businesses and competitors that have bigger marketing budgets, but customer service doesn’t cost us anything,” said Russo during an interview at the brand’s slick, seven-floor Mayfair townhouse and showroom.
“That’s where we’ve really tried to excel because we have the ability to be better in that department — and it’s not going to cost us the world. People forget the value and importance of a smile some days. In the beginning, all we had was a product and ourselves. It was us and how we looked after people and the attention to the detailing and making women feel special.”
Helen David, chief merchant at Harrods, said that while “many other couture houses focus on theatrics, Ralph & Russo focuses on making their clients look and feel beautiful. The business has grown with us from a small selection in eveningwear to a large presence in superbrands. Our clients have grown to love Ralph & Russo over the years, and we now have an extremely established couture business with them at Harrods.”
Here, Russo talks about building the label, the strategy behind the rtw launch and his aspirations for the company.
WWD: What is your vision for the company?
Michael Russo: To be a global luxury superbrand, one of the top ones that exist worldwide. That’s been a clear vision for us since we first started. It was important that we were really positioned as a luxury house rather than a fashion brand. We’re in conversations for fragrance, cosmetics and eyewear as well.
WWD: Where will the growth come from?
M.R.: All of our product categories, and obviously the international distribution that goes along with it. We have a relatively aggressive retail rollout plan. Within the next six to 12 months there will be up to 15 flagships open around the world, and that doesn’t include shops-in-shops, concessions or other points of sale. Many of the openings are happening at the end of this year. Over the next 12 months you’ll see stores in New York, Miami, L.A., Hong Kong, Doha, Dubai, Malaysia.
WWD: Where’s the money coming from to open the stores? Will they be wholly owned or franchises?
M.R.: The money is coming from the business. We’ve been very successful in haute couture, in building a really profitable, large business organically. It is an aggressive plan but we are managing that. A very small selection of the stores will be franchises, predominantly those in the markets where we prefer to have local expertise. The majority of them are owned by ourselves.
WWD: Will couture be available in-store?
M.R.: There will be an element of couture, really just to educate the customer about what couture is, but the couture will be mainly here in London and in Paris. The majority of clients come here for the experience. A big thing is to keep this family feeling of the brand and to really make people feel at ease and comfortable. Once they feel comfortable they become very loyal.
WWD: Couture is the foundation of your brand, but what makes the most money?
M.R.: The shoes and leather goods have become so popular. They get coverage on the couture runway and are now the biggest source of revenue for the business.
WWD: What was behind your decision to launch rtw?
M.R.: We didn’t want to do the rtw until there was so much aspiration and demand that it would fly. We have a hundred requests plus per day for the couture, and the reality is our clients are calling us because they have an event. They have a reason to buy a dress but they might not have the budget to buy couture. And they still want to be a part of the brand. That’s really going to fuel the rtw sales.
WWD: What are some of the biggest challenges you are facing in building this business?
M.R.: Social media has put us in a position that we now have to facilitate. And we have amassed a huge following. You can put a product in front of people, but if they don’t have a place to buy it, to touch it and feel it, there’s only so long they will stay in touch with the brand before going somewhere else. We’ve really had to identify where our biggest markets are, where the demand is, and that’s what has really become one of the main reasons as to why the retail plan is so aggressive.
WWD: What’s next? Will you sell this business and move on? Or do you have other plans in mind?
M.R.: Incubating other brands is definitely something on our road map. We’ve got a really strong infrastructure that we’ve invested in. It’s something that’s been key to the growth of the brand as well, because we’ve controlled everything — the image, product, distribution. We’ve invested a lot of money in this and I think what’s a challenge for a lot of designers is to find the people to create the right product and to have the right business support along the way to help. Being able to take on new designers and plug them into this infrastructure that we’ve created is something that we’re looking at more and more at the moment.
WWD: Why do you think you’ve been so successful in the couture business, where there are few clients and many longer-established brands vying for them?
M.R.: I think couture can be inaccessible. There are a lot of markets where someone in South America or the U.S. or Asia has seen a couture piece in a magazine, but for these people to buy a couture piece, it’s not an easy process. We’re trying to introduce new, emerging customers to the product by educating them, showing them the quality and really converting them to that.
Also, Tamara is a female designing for females, and approachable luxury is part of the ethos of the brand. Everything we do, from the color palettes to the boutiques to the way the sales or client relations people work with our customers. It’s a very soft approach.
WWD: You are also known for treating your staff — and especially the seamstresses and models — with great care, especially during your busiest periods. Can you talk about that?
M.R.: During show periods, we have three masseuses who work in rotation, giving 15-minute back massages or hand massages to the seamstresses who are working over machines all day. We have caterers as well. Our housekeeper is a fantastic cook and during the collections, she and her husband will cook for 250-odd people. Every night, there’s a proper buffet selection, and the models join in, too.