MARZOTTO PASSES TORCH TO DE JAEGHER
Byline: Luisa Zargani / Samantha Conti
VALDAGNO, Italy — Pietro Marzotto, one of Italy’s most savvy businessmen, resigned Monday as chairman of his family’s $1.3 billion clothing and textile group.
While Marzotto, 60, had begun to distance himself from the day-to-day running of the company a year ago — giving more responsibility to his top managers — his resignation came as a surprise.
“I am resigning because I want to spend more time with my family and my grandchildren. And I know I can leave the company in good hands,” said Marzotto at the very end of an annual shareholders’ meeting at the company’s headquarters here.
Investors appeared to agree. Marzotto’s share price on the Milan Stock Exchange closed at $15.56 on Monday, up 1.5 percent from Friday’s closing price of $15.33. Dollar figures are translated from the Italian lira at current exchange.
Marzotto named Jean de Jaegher, his second-in-command and the company’s executive deputy chairman, as his successor. Silvano Storer will remain chief executive officer and report directly to de Jaegher. Marzotto will remain on the board.
Over the years, Marzotto had built a reputation for rescuing troubled companies — and drawing others into the group. In 1991, he scored one of his biggest career coups by acquiring and restructuring Hugo Boss, the German men’s wear firm, which today generates just under half of Marzotto’s consolidated sales.
He said his decision to step down was in the company’s interest. “Although I fulfilled my duties in the past year, I didn’t spend as much time as I should have at work. Instead, I focused on leisure time with my family,” he said.
At last year’s annual shareholders’ meeting, Marzotto had promoted de Jaegher and Storer, and since then has increasingly delegated management responsibilities to them. He denied that he was looking to enter politics in the future.
Commenting on the developments, Paul Gordon, an equities analyst at IMI Sigeco, an investment house here, said, “Marzotto has been grooming the company for this moment — he wanted to gradually ease himself out of the chairman’s role. His goal was to transform Marzotto from a family-run company into a professional company run by experts in the sector.”
One of Marzotto’s biggest concerns during his nearly 30 years as chairman has been the future of the company, which is 53 percent owned by members of the family. But the Marzottos don’t necessarily think — or vote — alike on strategic decisions. Last year, a merger between Marzotto and HPI, the holding company for GFT, the maker of designer label apparel, was proposed and nearly consummated. It would have created a textile and apparel colossus and was meant to place Marzotto in safe hands and guarantee its future, but the deal was eventually aborted.
Discussing that proposed merger last year before it collapsed, Marzotto said, “Marzotto has been run by my family for five generations. It has been sort of a family-public company, which isn’t an ideal solution in my view. Now it will have a structure that can last into the future. People change, but institutions don’t.”
Francesca Rulli, an analyst at Milla Sim, an investment bank here, said the new team is strong and will be able to guide Marzotto into the future — “whether that means taking more of the company public, seeking another merger, or continuing down the same path.”
The Belgian de Jaegher, who has been with Marzotto for 30 years and has served as chairman of Hugo Boss and Marzotto USA, said the company’s strategies will not change under the new management. He confirmed that the company will continue to focus on the growth of its apparel lines, now its core business.
Marzotto makes lines for Gianfranco Ferre and Missoni under license and produces its own men’s and women’s collections. “The European single currency will mean more competition, and the only way to survive in the business is to focus on apparel,” he said.
Marzotto’s newest line is M Missoni, positioned between the bridge and designer segments of the market. The men’s fall/winter line was launched in January and the women’s spring/summer line for 1999 will be launched in July. The target consumer is 20-45 years old. Knitwear will make up 30 percent of the collection, and the remainder will be woven clothing and accessories.
Storer said Marzotto is also repositioning Ferre’s Gieffeffe line, trying to appeal to a customer who wants basics with a trendy twist.
Net profit in 1997 was $39.2 million, an 18.9 percent rise over the year before. Consolidated net sales for the first four months of 1998 were $559.3 million, up 13.8 percent year-on-year. Net sales for 1998 are expected to rise by double-digits, the company said.