FRANCHINI NAMED BALLY HEAD
Byline: Samantha Conti
LONDON — Changes are afoot at Bally — but they don’t include a sale.
Bally on Friday named former Gucci Group executive Marco Franchini as chief executive and chairman of the board at Bally International AG, effective today. His job will be to build Bally’s business after a two-year restructuring that saw the repositioning of the brand, a cost-cutting program and the closure of a series of factories, stores and wholesale accounts.
“We’re handing Marco a clean slate, so that he can build the business over the next five years,” said Abel Halpern, managing director of Texas Pacific Group and the current chairman of Bally’s board. TPG, the U.S.-based private investment partnership, acquired Bally in November 1999 with the aim of revamping the business.
“Marco will be fine-tuning the product positioning, addressing some design issues — there is still work to be done on our footwear, for example — and developing our retail concept. He will oversee the rollout of stores around the world and ensure the product is credible,” Halpern added. The first Bally new-generation store opened in Berlin last spring, and a second one opened in Lugano, Switzerland, last month.
Bally does not disclose sales, earnings or projections. Halpern declined to talk in detail about specific strategies for the brand.
Franchini, 45, will replace Federico Minoli as chief executive. As reported last May, Minoli was named interim chief executive after the resignation of Gerald Mazzalovo. Minoli and Halpern will continue as directors of Bally.
Franchini has worked at Gucci for the past eight years: From 1994-98 he was European retail director, and since 1999 he has been general manager for Europe. Before joining Gucci, he was an executive with Genny Group.
“I cannot help but compare this project to my past experience as a member of the Gucci management team,” Franchini said in an exclusive interview. “If we can replicate a mere fraction of that success, we will be in a very exciting situation.”
Halpern stressed that Franchini’s appointment signals TPG’s determination to push ahead with Bally’s relaunch, despite the tough moment for luxury goods sales.
“Our strategy for Bally hasn’t changed since we purchased the company: We are still focused on building an image-driven luxury brand that will generate luxury margins,” Halpern said. “After Sept. 11, we had to shift our tactics somewhat, however. We had to hunker down more.”
Halpern said this spring would be a “difficult” one for Bally, but he was confident business would pick up in the fall. He also denied that Bally was up for sale, which WWD reported late last year. “We’re in the business of private equity, which means we have to understand the interplay of economic and industry cycles in the fashion, luxury and retail businesses,” said Halpern. “Yes, we’re in a trough right now, but we’re going to come out of it. Bally has the capital structure to be able to survive.”
Halpern said TPG — which is said to be one of the companies interested in purchasing a minority stake in Versace — is considering future investments in the luxury sector. He declined to discuss whether the company was interested specifically in Versace, however.
“These are very challenging times, but they’re full of interesting opportunities. Smaller, independent companies need capital. Medium-sized companies — those with sales below $225 million — present the most interesting opportunities because they can’t necessarily do an equity offering on the markets.”