MILAN — The Roberto Cavalli group is entering the hotel business.
In a partnership with Dico International, the strategic investment arm of the Dubai-based Damac property developer, the Florence-based company’s first hotel is expected to be completed in 2023 in Dubai. Work on the five-star hotel tower that will comprise 220 rooms will begin in the first quarter of 2019. “This is the first of at least five hotels in 10 years,” said Cavalli’s chief executive officer Gian Giacomo Ferraris on Monday. The announcement was made in Dubai at the same time, one the eve of 2018’s Cityscape Global, one of the largest exhibitions on property development running Oct. 2 to 4 in that city.
The hotels will be called Aykon, with interior design by Roberto Cavalli. “The word Aykon in Arabic stands for icon,” explained Niall McLoughlin, senior vice president of Damac. The building will be located on the Dubai Marina development, overlooking the Palm Jumeirah, and Damac will fund the project with an investment of $500 million. “This is not just to bring a brand and put it on the wall, it has to add value for the customer,” said McLoughlin. Damac has already partnered with Cavalli as well with Versace and Fendi on residential villas. “Italian brands are very clear on their DNA, and the essence of their own label,” he said. Asked for the reasoning behind the partnership with Cavalli, he said the “brand values are easily recognizable — if you take the logo off, you still get the brand. Translating that into a tangible hard-core product, that’s what we are good at.” In Dubai, customers look for “distinctive brands that help them stand out from the crowd, anything with bright colors and prints and a true DNA.”
On the sidelines of the presentation, the executive underscored with WWD the relevance of the Cavalli hotel noting that, unlike other real estate projects, Damac Properties founder Hussain Sajwani is “not selling it. Damac will build and retain it. Usually, we build and sell to customers, including the hotels. For example, we build 100 rooms, sell to customers and they can live in there or give them to us, we use them as a hotel and give them a profit. We’ve delivered 21,000 homes and they were all built to sell, and 44,000 are in the pipeline.” Referring to the Cavalli hotel, he said: “We know it’s such a great plot and we are very confident it will be successful. This is why the owner is keeping it as a legacy product, close to the family to contribute to the recurring revenues stream.”
Ferraris confirmed the hotel will help boost Cavalli’s brand awareness in the region, although he said the label is already performing well in Dubai, where it counts stores at the Mall of the Emirates and at Dubai Mall, and the Clubs established by the namesake founder of the company.
Damac is also building Just Cavalli villas in Dubai. In Dubai, the Italian brand has teamed with Dar Al-Arkan, Saudi Arabia’s larger listed real estate developer, to design the interiors of the 34-story “I Love Florence” tower, which will be located on the Dubai Water Canal in the Business Bay area. As reported, Cavalli in May inked an agreement with Dar Al-Arkan to develop Mirabilia, an upscale residential district in the Shams Ar Riyadh development. One hundred sixty villas are expected to be completed in 2021.
The company today, led by creative director Paul Surridge, is “finalizing the work done for the past 50 years by the founder Roberto Cavalli, who set the basis for a lifestyle brand, branching out into eyewear, fragrances and art de la table in the Nineties,” said Ferraris. “There was this idea of building hotels, but you have to find the right partner who will respect the brand’s DNA. With Damac, we share the same vision.” Ferraris, who has known McLoughlin for several years, also said to be believable in such a project, “you need credibility and a total portfolio from tiles to wall paper and furniture — and all of the home line is Made in Italy.”
At Cavalli, licenses account for one-third of sales. At retail value, home accounts for 8 percent of total revenues, said Ferraris, noting the new real estate projects announced will bring fruits in the next years. On Monday, he reiterated his confidence in the company breaking even this year, and turning a profit in 2019. “Everything is according to plan,” he said.
Ferraris said the company needs further investments to compete in the current scenario. As reported in July, Italian private equity fund Clessidra SGR, which took control of the Florence-based brand in 2015, is said to be open to bringing in other investors to inject fresh capital and expand the fashion house. Asked about any development, the executive admitted the company needed investments to be competitive in this economic and global scenario. “If they come from our current shareholders, they are more than welcome,” he said. Philipp Plein has been rumored to be looking at Cavalli, but a market source contended that such a deal is unlikely to take place. Responding to questions about the recent Versace sale, Ferraris, who helmed that company from 2009 to 2016, said it was a positive development, with “fresh capital that helps support the company, which has a strong growth potential.”
The façade of the Cavalli hotel will feature glass and cladding interrupted by spacious balconies, and the building gives the impression of three towers of varying heights, said McLoughlin, and there will be infinity pools overlooking the Marina. A Roberto Cavalli boutique will stand in the hotel.
Damac is one of the top 10 companies publicly listed on the Dubai Financial Market, with a market capitalization of $4 billion, sales of $1.8 billion dollars and net profits of $1 billion in 2017.
Asked about future locations, McLoughlin said Damac is looking at “key cities where the Roberto Cavalli brand resonates. Anything is possible, the land is the biggest challenge,” but he also said the group is open to renovating existing buildings.
In Dubai, where Damac has five hotels, it has built 37 towers so far, and the company represents 27 percent of all skyscrapers in the city. “We kind of know what we are doing,” said McLoughlin with a chuckle. “We bring that expertise and marry it with another brand and bring that forward.”