MILAN — The beginning of a new year is an opportunity to take stock of the previous one and to map out future projects and Micaela Le Divelec Lemmi, chief executive officer of Salvatore Ferragamo, is doing just that, reflecting on her first 18 months leading the storied Florence-based fashion group, at a time when war does not seem such a far-flung concept and the protests in Hong Kong, which hit Ferragamo’s performance in 2019, continue to weigh on luxury brands.
On the eve of Ferragamo’s return to Milan with a men’s-only show on Jan. 12, following a few seasons of coed shows and a runway event held last June in Florence during Pitti Uomo, Le Divelec Lemmi said the move was “a natural consequence” of last year’s decision, to give the brand’s men’s wear “all the dignity it deserves.” Today, Ferragamo’s men’s wear division accounts for around 40 or 45 percent of sales, depending on the region, said the executive, and is “a particularly important business in some of our reference markets.”
Le Divelec Lemmi might have been referring to the Asia Pacific area, which, as reported, in the first nine months of 2019 was confirmed as the group’s top market, up 2.7 percent to 373 million euros, accounting for 37.5 percent of sales. In that period, the retail channel in China reported a 16.3 percent increase, but, in the third quarter, the performance in the region was significantly negatively impacted by Hong Kong, where retail sales were down 45 percent compared with the third quarter in 2018. Hong Kong represented 6 to 7 percent of total revenues.
Asked about her views on Hong Kong, she said it was “too soon to say,” adding that “some believe that it will never return to being what it was before” the protests. “For us and for the entire luxury sector, Hong Kong is an important point of reference. We are working on an extremely tactical approach, keeping the potential of the market in mind,” said Le Divelec Lemmi in her staple practical and cautious way. Responding to a question about retailing in the city, following unconfirmed reports that Louis Vuitton could be considering closing its store in Hong Kong, she conceded Ferragamo has been “in contact with landlords to review” the brand’s store contracts. “We are reflecting on this without taking decisions. It all depends on how it will evolve. Hong Kong has gone through particular dramatic moments in the past, too, and has always resurfaced. We have to look at the medium-long term approach tactically. Let’s see what the next months bring.” In light of this, the company plans to open stores in second- and third-tier cities, with a focus on Mainland China.
The executive characterized 2019 as “very intense, full of initiatives set in motion to measure the potential growth” globally.
She ticked off an ongoing fine-tuning of the organization, creating roles within the company “that did not exist before and that can help us implement strategies with a more consistent approach throughout the regions and at corporate level.”
She has been focusing on consistency across the board through the brand’s product offer and in-store and online experience, with the “goal not to stop with the first results, but to analyze them and evolve a strategic vision to transmit a message through all touchpoints of the organization, from our digital vehicles, our celebrities’ endorsements and in-store activities to our social network, training of our salespeople, marketing and communication.” She emphasized the show tool, citing the introduction in September of the Viva shoe, which will be in stores in February and that was inspired by Ferragamo’s storied Vara shoe.
Le Divelec Lemmi emphasized the importance of delivering a message through the launch of collections of products last year such as the Gancini collection and the Boxyz bag in the first half and the MyVara personalization project in the second half.
“In 2020, we will continue on this path, learning along the way, improving as we go, with a more consistent message for our final customers,” she observed. “Now more than ever we need to be careful of the message we convey to consumers, upping our relevance and content.”
Shoes continue to be an important focus, she said, speaking of “working on balancing full-price and off-price, first and secondary channels, in a way that enhances the brand and its value and may not immediately be reflected by the numbers.” Sales of shoes in the nine-month period last year were up 3.5 percent to 419.9 million euros, representing 42.3 percent of the total.
Handbags and leather accessories grew 4.7 percent to 392.3 million euros, accounting for 39.5 percent of total sales.
“We can and want to express our potential in handbags, and we have expanded and renewed our portfolio, completing our offer and speaking to different customers with different price ranges,” she said, citing the Studio Bag as a bestseller.
She also said “there are margins to improve” the brand’s ready-to-wear “so that it’s not only image but also business.”
“The trend that is emerging toward a new formal can be an area of opportunities for us, where we can have a say,” she added.
Last year, Paul Andrew was promoted creative director of the brand, while Guillaume Meilland maintained his role as men’s ready-to-wear design director, and Le Divelec Lemmi has repeatedly voiced her support for their work. Asked what expectations she had from the designers this year, she said she has requested them to be “increasingly more consistent” and in sync with their collections. “We talk a lot about this, a message that requires a continuous focus and evolution at the same time in keeping with the values of the brand.”
She admitted a year ago she “would have expected a less turbulent” scenario, “wishing to work on these initiatives in a more stable situation,” but as things stand today, “for a brand such as Ferragamo, that has this history and has seen so much, keeping a medium-long term vision in mind and maintaining it” is key.
The interview taking place a few days after the targeted killing of Iranian Gen. Qassem Soleimani, the executive said “we ask ourselves many questions professionally and personally. This is a unique historical moment, and we must keep a cautious position. It’s not simple, but we need to have a pragmatic approach.”
In line with her modus operandi, Ferragamo last month opened a 1,365-square-foot pop-up in Miami’s Design District, to “test if it’s an interesting destination for us,” presenting a new monogram based on the Gancini symbol, and with a storefront marked by a glass facade and a luminous two- and three- dimensional butterfly design giving the illusion of movement. The opening was the occasion to launch a limited-edition capsule collection of leather handbags, shoes and silk accessories with the butterfly motif and sold exclusively at the Design District location.
Sales in North America in the nine months were down 1.3 percent to 219.7 million euros, representing 22.1 percent of total revenues, and hampered by lower revenues from rentals and a negative performance of the wholesale channel in the third quarter. “The wholesale situation is quite confused, we don’t understand what could be the evolution of department stores and we hear disquieting and different news, it’s difficult to make forecasts,” said Le Divelec Lemmi.
However, the U.S. market is “more fundamental than ever, not only because Salvatore Ferragamo started his career there, but in terms of Italian lifestyle in America, for a brand that has the respect it has there, striking the right balance between the values of the brand and the need and attitude of the American customers, I think it’s worth focusing and working on it.” She also noted that the company’s retail distribution is “quite widespread,” balancing the wholesale troubles.