MILAN — The turnaround of Roberto Cavalli is under way, with break even expected to be achieved in 2018 spearheaded by chief executive officer Gian Giacomo Ferraris, who revealed plans for a new major hospitality project in line with the brand’s lifestyle mission — capped off by a hotel venture by the end of the year.
The Florence-based company has inked an agreement with Dar Al-Arkan, the largest publicly listed real estate developer in the Kingdom of Saudi Arabia, to develop Mirabilia, a new upscale residential district in the Shams Ar Riyadh development. A total of 160 villas is expected to be completed in 2021, with an initial investment of around 120 million euros for 80 villas to be developed in a first phase.
This is the first such project for Cavalli. Mirabilia [Marvels in Latin] will comprise a collection of luxury custom-built one- to four-bedroom residential villas that range from 3,240 to 15,120 square feet, overlooking the Wadi Hanifa valley, with interiors by the brand.
Shams Ar Riyadh is a massive premium development and is the first of its kind in the Kingdom of Saudi Arabia, comprising retail, commercial, hospitality and residential spaces.
“We have 10 years of furniture and home design behind us,” said Ferraris, expressing the brand’s legitimacy in taking on such ventures. “We also have a precise and distinctive DNA and there is a link between us and [Dar Al-Arkan’s] idea of a Mediterranean resort, as we bring joy, color and Made in Italy quality.” Ferraris emphasized Dar Al-Arkan’s projects to develop internationally outside the Middle East. Based in Riyadh, Dar Al-Arkan was established in 1994.
The projects with the developer makes sense for Cavalli on several levels. The company has always had a strong business in the Middle Eastern region, said the executive, adding that it now accounts for around 20 percent of sales. “There are eight million people in Saudi Arabia and it’s a market that is growing strongly, we see a great expansion. It makes sense financially, with interior design fees and royalties,” Ferraris said. There are four Roberto Cavalli stores in Saudi Arabia at the moment. “Also, these projects help brand awareness, and complete the fashion, luxury and lifestyle elements of the brand.”
Ferraris acknowledged the geopolitical tensions in the Middle East and said the brand’s business in Qatar was not immune to the effects of last year’s decision by Saudi Arabia, the United Arab Emirates and Bahrain to sever ties with Qatar, accusing the government of supporting terrorism.
While declining to provide additional details, Ferraris said the company is finalizing a deal to launch branded hotels starting in 2018. Cavalli would join the likes of Giorgio Armani, Versace and Bulgari in developing luxury hotels and resorts.
The “I Love Florence” tower will be the first in the world to feature the Cavalli interiors and is expected to be completed in 2020. The investments in the 34-story waterfront skyscraper total 800 million dirhams, or $217.8 million. Located on Dubai’s Water Canal in the Business Bay area, the location is “one of the world’s greatest urban transformations,” touted Ferraris.
These are only the latest steps for Cavalli, which under the namesake founder built a hospitality business and a comprehensive home line that is regularly shown at the international design and furniture trade show Salone del Mobile in Milan. Ferraris said there is a plan to roll out new Roberto Cavalli Caffès with the Saudi Arabia-based Unique Vision Group. As of today, Cavalli counts Caffès in Saint Tropez; Dubai; Riyadh, and Jeddah. There is also a Just Cavalli Club in Milan and in Sardinia’s luxury resort Porto Cervo.
Roberto Cavalli Home includes licenses with Caleffi for linen; Compagnia del Cristallo for tableware; JC Passion for interiors; Ricchetti for tiles, and Emiliana Parati for wallpaper.
Cavalli will be showing its men’s collection for spring 2019 designed by creative director Paul Surridge as a guest at Pitti Uomo in June in Florence. In line with the Cavalli’s efforts to further underscore its links with its hometown, the company has added the name of Firenze, or Florence, to its logo. Ferraris said he was looking for a “luxury building in central Florence” that would be appropriate for the company’s headquarters, as the Osmannoro plant outside the city was “no longer in tune with the times,” he said. “We need to be quick and flexible, this was a 324,000-square-foot building, and we need only 54,000. The heart of the company is in Florence and that’s where we need to be.”
Since his arrival in May 2016 after exiting Versace, Ferraris has been working on reorganizing the company and to keep a lid on costs.
As reported, operating losses before interest, taxes, depreciation and amortization totaled 7.1 million euros in 2017 compared with a loss of 26.2 million euros in 2016. As of Dec. 31, the company had a positive net financial position of 1.2 million euros.
In the 12 months ended Dec. 31, revenues were down 1.8 percent to 152.4 million euros, compared with 155.2 million euros in 2016, but Ferraris emphasized that the figure stabilized after years of steep declines in the range of about 25 percent each year. Stabilizing sales was one of the most urgent tasks when he took over, he has said.
In May 2016, Italmobiliare SpA, the publicly listed investment group owned by the Pesenti family, took control of the brand’s most recent owner, Italian private equity fund Clessidra Sgr SpA. Designer Roberto Cavalli himself retains a 10 percent stake in the firm, but he has eased out of the fashion industry.