MILAN — A show at Pitti Uomo, a new Milan store, the launch of an activewear line, and a comprehensive retail expansion are only some of the projects to mark MSGM’s 10th anniversary this year.
The MSGM Active label will launch for spring-summer 2020 and is inspired by yoga — a favorite of the brand’s founder and creative director Massimo Giorgetti.
“This is something really important for Massimo, and it’s a collection that can be worn in your downtime, for leisure and your well-being,” said Roberta Benaglia, chief executive officer of the brand. It even has its own claim, she said. “Exhale the past, inhale the future”— an obvious reference to yoga’s power of breathing.
Benaglia is also a founder of Style Capital, the fund that a year ago acquired a 32 percent stake in MSGM. Manufacturing company Manifattura Paoloni retained a 49 percent holding in the brand and Giorgetti the remaining 19 percent.
In her spacious and light-filled Milan office, Benaglia outlined her four-year plans for the brand, taking notes as she spoke, enthusiastic and upbeat, well-prepared yet carefully considering her answers as she checked her charts.
Since her arrival at MSGM, Benaglia has been focusing “on the development of the business, which was very strong in terms of style, image and product,” and had a distribution model based on wholesale. Benaglia has been forging distribution partnerships and building a global retail network.
As part of her business plan, Benaglia aims to double sales, reaching 100 million euros in four years. Last year, the company registered revenues of 51 million euros, up 21.4 percent compared with 42 million euros in 2017.
While declining to provide profit figures, Benaglia did say she was pleased with the company’s margins, which hover at around 20 percent.
While Giorgetti continues to build the brand’s men’s division — and the visibility of the Pitti Uomo show to be held on June 13 will be an additional boost — women’s wear still accounts for 85 percent of sales.
This is a return to Pitti for Giorgetti, who unveiled his spring 2014 collection for MSGM with a presentation at Florence’s Stazione Leopolda in June 2013. The show to celebrate the 10th anniversary will “fully emphasize the brand’s two divisions in two different contexts,” said Benaglia, as the women’s collection will be shown in Milan in September.
Milan Fashion Week this fall will also be the opportunity to unveil the new MSGM store in the city’s Via Broletto, relocated to a much bigger space, but remaining in the Brera arts district.
“This is our comfort zone, our environment, near Acne, Antonia and Golden Goose,” said Benaglia of the city’s characteristic area. Expanding to 3,240 square feet from the previous unit’s size of around 864 square feet, and covering two floors in a building that used to house a bank, the flagship will allow the brand to be “better represented.” Benaglia touted six-meter-high ceilings and an impressive staircase.
By geographic market, Italy represents 20 percent of sales. Including Italy, Europe accounts for 45 percent of revenues, followed by Asia, which accounts for 30 percent of revenues. Benaglia has been strengthening the latter. For example, in Korea there are 13 shop-in-shops now and the goal is to reach 19 in three years. She has inked new partnerships in China, where MSGM expects to have 10 stores by the end of the year.
Over the next four years, the company will open 30 stores in Asia, including Korea, China, Japan, Singapore, Taiwan and Malaysia. In Japan, the company will open two additional stores in the fall and seven more in three years, for a total of 16.
“We are aiming for Asia to represent 40 percent of sales in three to four years,” said Benaglia, while Europe is expected to account or 40 percent of revenues.
MSGM will also open a store on Tmall with the fall/winter 2019 season and on WeChat in 2020. This will allow the brand’s e-commerce business to be global, Benaglia noted.
The company is also investing in the U.S., which currently accounts for 10 percent of sales and the goal is for the region to represent 15 percent. Benaglia touted a solid business with department stores in the U.S. and said that an opening of a flagship in New York has been postponed to 2020 in light of the Milan relocation. Giorgetti plans to boost MSGM’s visibility with trunk shows in the region and the designer will present the brand’s resort collection in New York by appointment in early June for the first time.
There are around 600 multibrand stores globally that carry MSGM.
Benaglia sees growth also in the brand’s children’s collection, which currently has sales of 9 million euros and is expected to reach revenues of 15 million euros in four years. The line is produced under license with Daddato.
Given MSGM’s brand awareness and presence in Europe, U.S. and Asia, Benaglia sees more licenses in the future of the label. “We don’t want to dilute the image, but we are talking with qualified manufacturers to eventually launch perfumes, eyewear and watches,” she said.
As reported, MSGM in July will introduce a collection of underwear pieces for both men and women, which will exclusively hit the brand’s retail network, as well as its e-commerce. Giorgetti has described the collection as a “pilot” capsule, which he plans to extend in the near future by bringing a licensing partner on board and opening up to wholesale.
Sales of shoes and handbags grew 75 percent in two seasons, reaching revenues of 3.5 million euros, said Benaglia. “Sure, it’s still a small business, but this success tells us that we are in the right direction,” she noted.
Investments in communication in 2019 will be raised to 3 million euros from 2.5 million euros last year. This sum also included the fashion shows, pointed out Benaglia. “We will grow our digital budget, but not reduce our off-line investment,” she clarified.
Asked about the future for MSGM and whether an initial public offering could be an exit for Style Capital, Benaglia said she has “always sponsored public listings,” but doubted that it would be viable for a company with revenues of 100 million euros. Her goal is to create a management structure so MSGM can become “more independent and autonomous.”
She also explained that Style Capital is still in a phase of investments. “We expect to carry through one or two investments in 2019, and five additional ones in three years,” revealed Benaglia, adding that she was looking at the beauty sector “at the service of fashion,” or to the digital world, “but also to service fashion,” eyeing companies with sales between 30 and 90 million euros.
In April 2017, Style Capital, which manages a portfolio of 100 million euros, acquired a 51 percent stake in women’s wear brand Forte_Forte and last year a 30 percent stake in California-based denim brand Re/Done. Style Capital’s parent company Style Capital Sgr also controls the DGPA Capital private-equity fund, which includes investments in beachwear brand Sundek. DGPA sold its participation in Golden Goose Deluxe Brand to investment fund Ergon Capital Partners III in May 2015. Golden Goose Deluxe Brand was acquired by Carlyle Europe Partners IV in February. Benaglia left her role as ceo of Golden Goose Deluxe Brand in March 2017.