Byline: Samantha Conti

MILAN — Carla Fendi remembers her mother, Adele, as a woman who always let her family interfere with her job. When Carla and her four sisters were still babies, Adele breast-fed them while she worked, forcing the nanny to run a daily marathon up and down the staircase that led between the family’s apartment and the Fendi store.
“We waited our turns in a handbag drawer — accessories were our first toys,” said Carla Fendi during a recent interview. Later, when Adele handed the design responsibilities to her daughters, she told them: “Girls, design whatever you want. Just make sure that it’s high quality.” Carla said Adele was proud of her girls’ independent minds: “She defended us when we started stripping the traditional linings and crinolines out of the fur coats — even when our manufacturers went crazy: ‘Your daughters can’t do this!’ they cried. ‘Oh yes they can,’ my mother replied.”
Work and family have always been like yin and yang at Fendi, ever since Adele and her husband, Edoardo, founded their fur and leather accessories company in 1925, and those twin values have also been Fendi’s formula for success. Today, Paola, Anna, Franca, Carla and Alda Fendi are running one of Italian fashion’s hottest companies, expected to post $490 million in revenues this year.
For the past two years, firms inside and outside the sector have been in hot pursuit of Fendi — although it’s not officially up for sale. Sources say the leveraged buyout fund Texas Pacific Group (TPG) has conducted due diligence on the company and is reported to have offered upward of $440 million for the Rome-based company, and Bulgari chief executive Francesco Trapani admitted earlier this year that he had looked at Fendi’s numbers and found the company “very interesting.”
Italian luxury group czars Domenico De Sole, the chairman and chief executive officer of Gucci, and Patrizio Bertelli, who owns and manages Prada, are said to be warring for control of the company as acquisition fever sweeps through Europe.
What makes Fendi such a catch?
“There aren’t a lot of companies like it on the market; it’s a sizable business, 40 percent of revenues come from accessories — a lucrative sector — and it is undergoing a renaissance. Fendi is a hot label once again,” said an industry source. “I think a lot of the contenders — especially Gucci and Prada — know they can add value to Fendi and run with the business. I think they see a lot of unexploited potential.”
Armando Branchini, the vice president of InterCorporate, a luxury goods consulting firm here, said Fendi also has a well-developed distribution network spread evenly around the world. Eighty percent of Fendi’s sales comes from exports, he added, and the name has an extremely strong brand awareness.
“Fendi is a quality name that people recognize,” he said.
For years, the company was known for its luxe — and often wacky — furs and ready-to-wear designed by Karl Lagerfeld, who has been working for the company for nearly 35 years.
“He’s the sixth Fendi child; our pasts and our future are intertwined,” Carla Fendi said. Lagerfeld’s latest three-year contract began on Jan. 1, 1998, and he has the option to renew for another three years, although it is unclear what his plans are. The designer could not be reached for comment.
Fendi was also well known for the double “F” logo printed on canvas and leather bags and accessories. The Fendi revival, which many say was orchestrated by chairman Carla with help from Anna and her daughter, Silvia Venturini, who run the design office, began in the fall 1997 season with the debut of the now-famous “Baguette” bag. Fendi’s little shoulder jewel, which fits snugly under the armpit, comes in 500 different styles — everything from python to denim to precious Venetian velvet — and is flying off shelves. Carla said the company has sold about 300,000 so far to clients around the world, including Madonna, Sharon Stone, Sophia Loren and Elizabeth Hurley. Carla Fendi said the Baguette’s appeal comes from its anti-minimalist look and couture-like cachet.
“Each bag is different from the next. I think the Baguette allows women to make a unique, personal statement,” she said.
Kal Ruttenstein, the senior vice president and fashion director of Bloomingdale’s, said the Baguette is “the most incredible item” and the biggest seller at the department store’s Fendi corners.
“Prices range from a couple of hundred dollars to $3,000 dollars — and they’re all selling. But that’s only the icing on the cake,” Ruttenstein said. “Our overall Fendi accessories business is incredible. They offer so many styles that are continually updated season after season. The Fendi sisters are on top of everything.”
The company has also begun to roll out a radical new store design known as Dark Shop Fendi. The new stores, designed by the Rome-based architects Lazzarini and Pickering, are shadowy with black panels, dark brown wooden tables and steel shelves and floors lit with blue light. The displays are set off by spotlights and invite customers to touch.
“We were sick of seeing the same old image for fashion stores: lots of white, diffused lighting and minimal furnishings. We wanted to renew our image,” Carla Fendi said.
Fendi’s Rome boutiques have already been redone in the new style, and over the next year, new corners at five Saks Fifth Avenue stores and a shop in Manhasset, N.Y.’s Americana upscale shopping center will throw open their darkened doors.
Branchini of InterCorporate added that Fendi’s renewal is also taking place under the surface. The company has finally taken control of all distribution in North America, eliminated a series of nonstrategic licenses in the men’s wear division and put a larger focus on the accessories business.
“Carla Fendi is a very, very good manager. She is responsible for much of the latest success of this company,” Branchini said.
And while work and family have always been the winning formula for Fendi, that symbiotic relationship just might jeopardize the company’s future. While Carla says Fendi is not up for sale, she admits that she and her sisters are “examining all of the proposals that come our way — and there are more than just the ones you read about in the papers.”
It’s no secret, however, that the sisters are deeply divided over the future of the company, which is essentially run by five different families. To make things even more complicated, under Fendi’s Byzantine corporate structure, all five sisters must agree to turn over their 20 percent stakes in the core company — Fendi Paola e Sorelle Sas — to the same person if a sale is to be successful.
As reported, Prada’s Bertelli may have already wooed one Fendi sister to his side, while De Sole may have convinced two — Carla and Anna — to hand over their shares to him. Bertelli is also reported to have purchased a 9.5 percent stake in Fendi, although that stake appears to be in Fendi Srl, the company that oversees the manufacturing and commercial arm of the business — and has nothing to do with the core company. Both Bertelli and De Sole, both of whom are on aggressive acquisition campaigns in the luxury goods sector, declined to comment on the reports.
Carla Fendi also said that, when acquisitions happen in any sector, whether it’s banking, publishing or fashion, companies should stick to their tribes.
“It’s always better for a company to be bought by someone who knows what the industry is about,” said Carla. In line with the company’s policy not to comment on rumors, she declined to say anything more. Paola and Alda Fendi are both said to be considering selling to De Sole, who has reportedly offered more than $700 million for the company. The main problem, sources say, comes from Franca Fendi, whose children — Guido and Andrea — hold top managerial jobs within the company. Sources say Franca favors TPG because it is the only suitor that will guarantee that her children keep their positions.
“Gucci, the most aggressive contender, also appears to be the front-runner, both because it has offered so much money, and because it could add so much value to Fendi,” said a source close to Fendi. “But timing is a big issue; the sisters have been seriously evaluating offers for more than a year now. They don’t need the money personally, and they don’t need it to grow the business. But this is Fendi’s moment, and they shouldn’t miss this golden opportunity to sell.”