FERRAGAMO EXPECTS 1996 SALES GROWTH OF 43%
Byline: Sara Gay Forden
MILAN — Ferruccio Ferragamo, chief executive officer of the family fashion empire Salvatore Ferragamo, sees growth at the Florence-based house keeping up a brisk pace.
In an interview from his headquarters, the Ferragamo chief reported that sales rose a healthy 32 percent last year to $425 million (680 billion lire) and said he expects 1996 to bring an increase of 43 percent to $625 million (nearly 1 trillion lire).
“Our growth rate continues to be strong and it hasn’t shown any signs of slowing down,” Ferragamo said.
Ferragamo cited continued brisk sales of its core products, primarily footwear and accessories, especially handbags, small leather goods and men’s ties.
Looking ahead, Ferragamo said the firm has plans to continue to expand through store openings in the U.S. and Europe. In the U.S., new stores have been slated for California’s South Coast Plaza within the first quarter and in New York at 663 Fifth Ave., where the full range of women’s apparel and accessories will be sold, by July. Ferragamo already has two stores, one for men and one for women, on the ground floor of the Trump tower. Another store is planned in Brussels (by July) and an additional shop will be opening in Paris on the Faubourg St. HonorA in July or August, Ferragamo said. The firm also recently opened a new store in Monte Carlo.
Ferragamo said he plans to continue the company’s strategy of developing and producing classic, understated fashion products that are entirely produced in Italy, directly by the company.
“Licensing does not enter into our strategy. Our name is our guarantee,” explained Ferragamo, who noted that the only exception will be Ferragamo’s first fragrance, which will be a women’s scent that is slated for launch in 1997 and is being developed in conjunction with Eurocos, a European subsidiary of Proctor & Gamble.
Behind the scenes, Ferragamo said the company has been investing in a sophisticated data system called “Apache,” which has been custom developed for Ferragamo by IBM and an Italian software house and that will streamline management of the entire production system.
“It will manage everything from the moment of the order to the moment of delivery,” Ferragamo said. The firm produces more than 6.5 million pieces a year, and the system should be up and running early this year, he added.
Ferragamo also said that the house acquired three luxury hotels in downtown Florence late last year in a move to diversify its assets. The hotels are the Augustus, the Continental and the Lungarno, which the Ferragamos plan to renovate while keeping the building’s original character intact. Ferragamo declined to reveal the acquisition price of the hotels under agreement with the seller, the Pontello construction family.
“We felt they were a good investment and a way to enhance at least one Florentine characteristic — the view of the Arno from these hotels is like that of a picture postcard,” said Ferragamo.