Façonnable is reorganizing for growth.
In an exclusive interview, shareholder and chief executive officer Moustapha El-Solh said the Nice-based fashion brand is working to further elevate its luxury content and is terminating its casual collection, called F., to focus on the more exclusive signature line. It is also undertaking a corporate restructuring, which is impacting its supply chain, production and logistics. El-Solh said he has appointed Jean-Paul Martinho as vice president of global wholesale and retail, a new position. Martinho was previously wholesale director for France/Benelux/Iberian Peninsula at Ermenegildo Zegna Group.
M1 Group acquired Façonnable in 2007. The Lebanon-based company has been expanding in the world of fashion and luxury, actively bidding for and underwriting different investments in the fashion sector, most recently taking a stake in Pepe Jeans Group with L Capital Asia in February. Pepe Jeans Group also includes the Hackett men’s wear label.
Following the departure earlier this month of artistic director Daniel Kearns, the Façonnable collection will now be designed in-house. “We have a team of experienced designers that have been working with us for more than 10 or 15 years,” remarked El-Solh. The Dublin-born men’s wear designer joined the French sportswear firm in September 2013 and showed three collections, steering Façonnable in a more sophisticated direction. Deputy managing director Ludovic Le Gourrièrec also left at the end of March.
Façonnable, founded in 1950 by Jean Goldberg, reached its peak in the Sixties, and became known in the Eighties for its fun, striped and colorful shirts evocative of the French Riviera. With its spring 2016 collection, which was designed by the in-house team, the mainly men’s wear company is targeting the luxury sportswear segment, returning to its heritage and iconic elements.
El-Solh explained the reorganization will enable Façonnable to reduce costs and be more competitive, flexible and reactive by introducing more automated steps and relying on third-party suppliers. Also, the company is “revisiting its retail network to grow efficiently,” he said. The changes are impacting the group’s head count, and 96 employees out of 500 across the world are being considered for layoffs. “Some are corporate, some are from points of sale, and the majority in France,” he noted. Citing volatile and changing dynamics, El-Solh said the group is investing in full integration and in its IT system so regional managers will be able to be more reactive locally.
“On a comparable basis for the second half of 2015 we continue to see a consistent increase of 6 percent in our sales and we estimate an 8 percent increase in 2016,” said El-Solh. “In parallel, due to the corporate and supply chain cost engineering, including corporate restructuring, deployment of a fully integrated IT system, supply chain optimization and closing down certain losing commercial points of sale, starting in 2015 and well into 2016, we expect an earnings before interest, taxes, depreciation and amortization enhancement of 18 percent for the second half of 2015 and about 28 percent in full year 2016.”
Sales for the year 2014 were not available. The last sales figure disclosed was for 2012, when the brand brought in almost 170 million euros, or $217.6 million at average exchange.
In the U.S., the company has nine directly operated stores and two outlets in addition to e-commerce. In Europe, there are 25 boutiques, six outlets and an e-commerce site. In the region, there are also 30 franchised points of sale and 201 multibrand stores.
The company had been working with two store concepts, a resort-oriented one and a lifestyle model, although now the focus will be on developing the latter.
El-Solh said the brand has been entering new doors, such as Barneys New York and 10 Corso Como in Milan, but that directly operated stores remain a priority. “We believe in a vertical business model in key international cities,” said El-Solh. Store openings include Aishti Mall Foundation in Beirut in July and Soho Mall in Panamá this summer.
The executive noted that prices have not been raised. “We want to continue to be competitive in our market segment,” he stressed.
Latin America, the Middle East and Africa are “performing very well,” he said. “There has been a retrenchment in China, but we continue to believe in this market as we do in the U.S., which is very important.”
Leveraging on its French heritage, the company will now show its new collections out of its Paris showroom. It will present its pre-collection from May 26 to June 6 and its main collection from July 6 to 19.
El-Solh said the group will continue to develop partnerships, citing as examples last year’s successful capsule collection with Italian Independent based on the late artist Jean Cocteau. “We want to portray the lifestyle of a brand from the French Riviera.”
