Valentino Fashion Group`s huge profit gain Benetton
Transcription
Valentino Fashion Group`s huge profit gain Benetton
INDEX pambianco ANALYSIS 3 Listed Fashion Companies exceed 100 billion euro turnover LEADERS 5 Renzo Rosso: the future between luxury and Second Life FASHION STOCKS 11 Stock Market Crisis Sparks Slight Tumble in Pambianco Index ITALY 13 Benetton Group revenue growth up 12% 13 Valentino Fashion group’s huge profit gain 14 Burani targets a billion 14 Max Mara, Maramotti scores a double (Corriere della Sera) 14 Ferretti and Marithé François Girbaud create Giraffe 15 Work starts on Breganze Diesel Village 15 Artemide, 15% increase in turnover (Il Sole 24 Ore) 16 Replay e Procter & Gamble make perfume together 16 Ferragamo: Cristina Ortiz named creative director of women’s ready-to-wear EXCLUSIVE INTERVIEW 17 Bottega Veneta, true luxury is no-logo REST OF THE WORLD 19 Adidas takes on Nike (CorrierEconomia) 19 Hugo Boss: sales up by 11% 19 Swiss Made gets tougher rules (Il Sole 24 Ore) 20 Crocs add new apparel line (Corriere della Sera) Top Stories: Renzo Rosso Below: Stefano Sassi, Patrizio Di Marco, Piero Lissoni 20 Swatch: strong growth in first half year 21 Kenneth Cole: second quarter results slightly down 21 Esprit net profit up by 27% 21 Gap’s profits rise 21 Vogue takes its glamour to India 22 Carrefour challenges Zara 22 Guess, Second quarter 2007 revenues, increase of 48% 13 14 M&A 23 Aicon acquires Sicily’s Morgan Shipyard 23 Luxottica gets the go-ahead to purchase Oakley 23 Hermès acquires Soficuir SHOP OPENINGS 24 Espressamente Illy to open 105 coffee shops in China (Il Sole 24 Ore) 24 Marlboro Classics open in Kiev 24 Audemars Piguet conquers Ginza 25 Prada strengthens its retail presence in China 25 Nike and Adidas open in Beijing 25 First flagship store Miss Sixty/Energy in New York 15 20 ADS & EVENTS 26 Armani Lounge for Chelsea Football Club 26 Julian Schnabel awarded the 2007 Gucci Group Award 27 New Guess Campaign prompts oriental reflections 27 Gorbachev is the new face of Louis Vuitton 21 DESIGNERS 28 Piero Lissoni, the designer who never wants to grow up 23 Enclosed to issue #15 of Pambiancoweek Milan Court Register no. 344 of 2/05/2005 Editor in Chief: David Pambianco Editorial Staff: Chiara Dainese (Responsabile), Paola Cassola, Claudia Cogliandolo, Rossana Cuoccio Contributors: Alessio Candi, Mai Esteve Advertising: Lia Lasagna (Responsabile), Maureen Punzina Subscriptions: Alessia Cappelletti Editor of the magazine: Pambianco Strategie di Impresa S.r.l., Corso Matteotti n. 11, Milano Contacts: Editorial Staff: [email protected] -+39 02-76388686 Advertising: [email protected] - +39 02.76388600 Subscriptions: [email protected] - +39 02.76388600 TOP STORIES 2006 FINANCIAL STATEMENTS OF THE TOP 35 LISTED FASHION AND LUXURY COMPANIES Listed Fashion Companies Exceed €100 Billion Turnover in 2006 Luxury markets continue to roar, recording an excellent 2006 yearly performance both in terms of turnover and profitability. The report comprises profiles of the 35 top listed international companies, recording a turnover of 13.5% (€97 million), with an average Ebitda of 19% (€18 billion) and an 11% profit of €10.6 billion. More than half of these companies have a yearly turnover of more than €1 billion. In pole position, is the French luxury goods holding company, Lvmh whose business turnover was in excess of €15 million. The average yearly turnover of these companies is €2.8 billion. However, the Italian companies are responsible for lowering this turnover average (€950 million), which would otherwise amount to €4.1 billion. The profit earning capacity of the Italian companies is responsible for this difference in yearly turnover; they have an Ebitda of 17.3%, 2 points lower than the other ‘non Italian companies’ listed. It is also surmised that the business turnover of these companies greatly influences profit margins. Worthy of note is the fact that Italian companies pay an average 3.5% tax, whereas the other ‘non Italian’ companies pay 4.7%. Despite different growth trends, the Italian and non-Italian companies both achieved excellent growth turnovers. The 15 Italian companies documented in this report were up 10.6% generating a turnover of €19.9 billion in 2005 and €14.3 billion in 2006. Excellent performance by Geox and Antichi Pellettieri (recently a listed company) reported a 35% and a 62% increase (buoyed by various acquisitions) in business turnover respectively. Before Antichi Pellettieri became a listed company, Giovanni Burani explained “being a listed company will allow us to grow and become more powerful. We will use IPO returns to open around 125 to 150 stores within 3 years, most importantly in Russia, Middle East and Asia”. In pole position with the highest revenue turnover is Luxottica. The acquisition of Oakley has enabled them to gain a leading position among the 6 international listed fashion companies such as Richemont and Vf Corp. Valentino FG (recently bought by Permira) and Benetton are in second and third place respectively with an annual turnover of €2 billion. Although not anywhere as successful as Luxottica, they both reported a growth trend of 13.6% and 8.3% respectively Valentino FG noted that determining factors for the 2006 growth performance were brand extension and the opening of directly operated stores. Benetton confirms that excellent growth performance was a result of their adults and children collection, including Sisley and Sisley Young. 2006 company report for the 35 top listed fashion and luxury markets Excellent growth performance for the 20 non-Italian listed companies, recording an average turnover growth of 14%. Best performers were active wear companies, Puma Italian listed companies Top 5 - best turnover performance for 2006 Group Turnover Luxottica 4.676 7,0 Valentino FG 1.963 13,6 Benetton 1.911 8,3 Safilo 1.122 9,4 Bulgari 1.010 10,0 Million of euro Turnover growth % Pambianco financial statements LUCIANO and ALEssandro BENETTON FRANCESCOTRAPANI-bulgari 21/09/2007 TOP STORIES International Listed Companies Top 5 - best turnover performance for 2006 Group Turnover Lvmh 15.306 10,0 Nike 12.081 4,0 Adidas 10.084 52,0 Inditex (Zara) 8.196 21,6 H&M 7.545 17,3 Million of euro Turnover growth % Pambianco financial statements Herbert Hainer - ADIDAS (+33%) recently acquired by Italy compared to the rest of the world PPR, and which already controls Gucci Group) and Adidas, which Growth. Turnover Ebitda % net Profit % recorded a 52% growth increase, % buoyed by the acquisition of Reebok, which has enabled the Italy (15 Groups) 14.262 10,6 2.468 17,3 1.057 7,4 company to gain a leading position 82.452 14,0 15.930 19,3 9.587 11,6 in the US sports and lifestyle Rest of the World (20 Groups) market, in particular, basketball 96.714 13,5 18.398 19,0 10.645 11,0 and fitness. This strong turnover Total (35 Groups) growth rate is crowned by its Million of euro Pambianco financial statements strong showing at the World Cup. The Company forecasts sustained growth performance for 2007 thanks to future investments with the approaching of the Beijing Olympics. Puma, on the other hand, continues to be successful thanks to its expansion in new territories such as Taiwan, China, Hong Kong, Argentina, Mexico and Canada. Behind Lvmh, in terms of sales success, is active wear companies, Nike and Adidas. With Lvmh in pole position, Nike is in second place, reporting sales of 12.1 billion and Adidas, in third place, reported sales of 10.1 billion. Other best performers were InditexZara (operating some 3,200 stores) and H&M who has taken the world AMANCIO ORTEGA - INDITEX BERNARD ARNAULT - LVMH by storm, targeting large street frontstores in major metropolitan areas, selling at performance. 2007 looks bright for the fashion competitive prices and recording excellent growth sector predicting excellent results. NB: Aeffe was included in the report even though il will not be a listed company until July. To obtain a complete list of individual company profiles and information regarding growth performance, returns and profits, please contact Claudia Cogliandolo at [email protected] or phone +39 02 7638 8600. 21/09/2007 Renzo Rosso, 52 years, President of Diesel Leaders Renzo Rosso - President of Diesel I think of the brand and the creativity. And the rest? I leave that to the managers l e s e i D ( ) The Future between Luxury and Second Life It’s located in the industrial area at the gateway to Molvena, among a swarm of light-coloured industrial hangars, the symbol of the small enterprise that has enriched Veneto and Italy, in a road aptly called ‘Via dell’Industria’, without too many signposts. The headquarters appears when you least expect it. Almost a replica Lego railway station of West America, the stuff of 1970 electric train sets, complete with a lofty totem pole covered in historical Indian design and the slogan “Only the Brave”, which is also the name of the group’s holding company. Above, huge letters announce Diesel Industries. Below, on the pocket of grass in front of the offices, a few youngsters lounge, employees in thong sandals and T-shirts on their coffee break. Past the entrance, beyond the reception, a reconstructed saloon, naturally. And then, rooms and people so easy they seem on vacation; up the stairs we trot to Renzo Rosso’s floor. We wait for him in an office that is almost an attic, more like a den, a retreat for body and mind, with its workout bench, hundreds of photos, statues big and small, an array of objects collected over the years and, on the walls, five original silk screen prints of Mao Tze Dong signed by Andy Warhol. And everything seems like a game, so much so that the tie worn by this guest - probably the only tie in the whole building – starts to feel too much like a work object. 21/09/2007 Leaders Diesel S/S 2007 Campaign Then Rosso arrives and one look at him is enough to see that clearly the things done here are anything but a game. For the founder of the world’s most famous jeans brand today, for the man that has known how to create a way of life around a name that recalls the image, not of fashion but of diesel engines, it seems that there is no time to stop and say “hey I’ve arrived”. The projects are still many and still ambitious. Above all, body needs to be given to the brand’s umpteenth rise to the top, to be made only by keeping the relationship with the base strong and steady: that “DNA of freshness and modernity” that has enabled Diesel of Molvena, Vicenza, a company of the class of 1978, to cross the one billion euro sales threshold two years ago and to power last year’s sales to euro 1.18 billion. Another stride forward at these levels means one needs to have a very clear project in mind. And believe in it. Diesel is on the quest for a delicate balance between growth and tradition. A tough concept, easily misleading. As can be understood from the way Rosso’s pale blue eyes scrutinise whoever asks him about the future. As if to say: it’s a key moment for Diesel, so keep the questions on what we will do tomorrow to a minimum. Rosso has charted the course of the future for thirty years and has been broadly imitated. Not this time though. This time the future is already here, between a Diesel of luxury (with stores positioned between those of Burberry and Chanel as in New York) and a virtual Diesel, in the style of Second Life. To hit the winning formula you need to move fast. A glance at his watch. No joking around here. Time is precious. Let’s start with a general overview. Rosso, born in Padua in 1955, and Diesel, the company he founded and of which he took outright control in 1985, are the pinnacles of a Veneto system that has marked modern jean history. Has this system retained its competitive edge? Undoubtedly, there was a Veneto leader in this sector. But nowadays, jeans are a transversal product that cross both segments and companies, as well as geographical areas, and all the world’s brands put them into their collections. A lot depends on whether one has the ability and knowledge needed to grasp the aspects of a product that integrate well with liveability and the social scenario. This is why the California jean industry is losing ground, because it lacks the culture and know-how of jeans. While the Scandinavian area is developing well, led by brands such as Acne and Cheap Monday, who make simple products, not technologically advanced, but competitively priced and that mainly play on the silhouette rather than on special treatments. 21/09/2007 Leaders Diesel by Numbers Diesel has its HQ in Molvena, Vicenza province, from where it controls more than 15 branch offices across Europe, Asia and America. The company’s current geo-chart covers 80 countries and counts 5,000 outlets, of which 300 own-brand stores. Diesel is owned by Only the Brave holding company, which also controls Neuf (the company that owns the Martin Margiela brand), 55DSL, a brand of urban culture and street&urban fame, and Staff International, an Italian company acquired in 2000 that produces and distributes the group’s proprietary labels, such as Maison Martin Margiela, Diesel Denim Gallery and Sophia Kokosalaki (recent acquisition) and the licensed brands of Dsquared and Vivienne Westwood Red Label. Only the Brave 2006 Sales % Increase 2005 2004 1,180,000 1,089,110 1,004,178 7.2 8.5 27.4 2003 787,908 Ebitda nd 272,987 265,847 172,841 % Ebitda nd 25.1 26.5 21.9 Source: Company financial statements Million of euro Let’s talk market, how are jeans performing these days? Jeans are typically a cyclical product and, after years of almost exponential growth, we have now entered a “stall” phase. But, you have to watch out because it is precisely in the crisis periods that the strong companies emerge, the brand leaders whose accumulated know-how and professionalism enables them to come out even stronger. And move the competitive marker even higher. Is that what enables Diesel to offer the market jeans priced from €250 a pair? The brand makes the difference on a par with the technological and qualitative content. That content, above all, is guaranteed by the fact that Italy is still the best production terrain for the medium-high end of the offering. However, it is clear that all the companies, even the luxury brands, are forced to seek more economical solutions abroad when it comes to making their inexpensively priced clothing. Primarily, because, speaking of global brands with sales of more than one billion, it is essential to segment the offering to drive growth of 10% (+10% translates into additional sales of euro 100 million). Which means? Currently, Diesel is crafting products of excellence with maniacal care and of which I’m very proud. Products with which the brand counts on giving “even higher quality to its target market”. In line with the segmental distribution strategy that is the present-day challenge of the major brands: extend the collections towards the higher end segments, but not forgetting those already won. However, never speak about first and second lines as this automatically means talking about A and B-class consumers. The brand is as unique, albeit in a much broader way than originally, as the collection, which is distributed in “packages” in correspondence with the features and positioning of the retailer clients and their target consumers. To clarify that concept, the best example is Selfridges in London, our most casual line is sold on the ground floor in the casual section, while the most exclusive line, the one I was speaking about earlier, is displayed on the Contemporary Floor on the first floor and is the one that also generates the highest sales per square meter. In addition, the consumer of ten years ago was 20 years old and wanted a specific kind of product, while today’s Diesel has grown up and wants something more, but always in line with the Diesel DNA of freshness and modernity. A complex business that will see the company participate also in the next Pitti Immagine Uomo, an historic moment for the label given that it stopped doing trade fairs years ago (Diesel will be the special guest at the Dogana event-evening planned for 21 June). 21/09/2007 Leaders Diesel Store NY, Union Square And the interior of your stores? The same thing happens, I’ll give you the New York example. There is the flagship store on Lexington Avenue, where you can explore the entire Diesel universe, the Union Square store, close to the university, which stocks the younger products and the store in Soho, where we are positioned between Burberry and Chanel, which sells mainly the premium Diesel items. We have ten stores like the Soho one, positioned in the luxury market (editor’s note: including the Corso Venezia store in Milan). The brand is famous for its communication and the many awards won by Diesel attests to this. How do you differentiate from other brands? We were the only brand to implement a different way of communicating. The true difference is that we tell a story. Today it is easy to advertise using testimonials and naked women. Our Creative Team (guided by Wilbert Das) differs in that each season they tell a story, such as the “For successful living” campaign or the latest “Global Worming”, advertising that generates controversy and debate. In essence, we send out a message. We do not say buy this or buy that, we say this is who we are and this is what we believe in, but it is always the consumer that chooses, if they appreciate us they buy us. Whoever buys Diesel embraces a lifestyle, enters a world, a community in which they feel they belong. Some months ago you acquired the majority stake in designer Sophia Kokosalaki’s brand. This is the latest in a series of small but targeted acquisitions. Is consolidation an inevitable process for the industry? I believe that small companies need to integrate with more structured groups to survive and develop their potential, it’s not just a question of finance. Indeed, that’s the simplest aspect of all. By far the hardest thing is to convince these small enterprises to change 21/09/2007 Leaders Diesel S/S 2007 Campaign their mindset, to get them to implement managerial and industrial principles. Don’t you think it’s time for a more sizeable acquisition? Look, it’s much more difficult to buy a small company than a larger, structured organisation. Diesel needs young, fresh and modern firms. We don’t need to takeover a major player to boost sales. What we look for are the contents, those that will dictate fashion in the years ahead, in the future. In addition, we look for diversity, for things that we don’t already do. And one thing’s for sure, we certainly won’t be acquiring a jeanswear brand, given that we already market our own top brand. How much of today’s Diesel is Renzo Rosso? Diesel is still 100% Renzo Rosso. I no longer take care of the activities that I term services (finance, administration, IT), but focus on style, advertising and the interior design of our store locations. I am involved in the whole product process through to the final fittings prior to the collection green light. And each year at least 100 store projects – between new openings and restylings – end up on my desk. Therefore, how would you imagine Diesel without Renzo Rosso? It seems paradoxical, but this company is building a fantastic structure even without me. A structure of managers and creatives, so it would reap success even without Renzo Rosso. I am at the service of the company, a key team player and guide, but not vital. Rosso’s assistants call time-out and indicate an always pressing schedule. One last question. You’ve spoken about a TV for Diesel, is that possible? That was said by a journalist after interviewing me. I simply said that paper-based information is a dying species. Nowadays everything is virtual. Talking of online, Diesel receives thousands of requests from the internet community everyday. Why not imagine something in the style of Second Life, or even inside Second Life? With a twinkle in his eyes and a sudden smile, he gets up, saying only “Who knows”. 10 21/09/2007 FASHION STOCKS July / August 2007 Stock market crisis sparks slight tumble in Pambianco Index Turbulent financial markets this summer also penalised European fashion and luxury stocks in July and August. Indeed, the Pambianco Index of Europe’s top 25 listed companies retreated a total of 3.5% in July and August. Taking into account also the May (-1.5%) and June (-6.1%) performances, the Index has shed more than 10% in the past four months, although it has still gained around 14% since the start of the year. Analysing the triggers of this fall shows that the latest stock market downturns sparked by the American “subprime” mortgage crisis have not apparently hit the consumption of luxury goods, nor the companies’ results, at least up to now. On the other hand, exchange rates had a bigger impact, especially the €/US$, which rose as high as 1.38, with the brunt suffered mainly by the revenues and especially the earnings of those European companies for whom the United States is a large export market. SAFILO was the worst performer in the past two months, with the stock shedding 27%. Despite communicating favourable 1H07 results, with 10.3% revenue growth on a constant FX basis (+14.2% at the current rate) and a 6.2% jump in EBITDA on the earlier six months, The eyewear company was penalised by the market for having lowered its yearend forecast, paring EBITDA to €180 million from its earlier estimate of €190 million, precisely due to the FX trend. Sicilian-based yacht-builder AICON, after failing to acquire Wally Yachts, announced in early August that it had bought Morgan, but the stock also lost ground to the tune of 14.5%. Another negative performance was announced by IT HOLDING (-12.9%). After the initial enthusiasm for the new industrial plan presented end-June and the gradual exit of financier Giribaldi, the stock was hit by COMPANY EXCHANGE PrICE 2 JULY 07 PRICE 31 aUGUst 07 ADIDAS Franckfurt 46,75 43,15 AICON yacht Milan 4,35 ANTICHI PELLETTIERI Milan 10,90 BENETTON Milan BULGARI Milan ∆% 01/01/07 MKT. CAP (euro mln) -7,7 14,1 8.630 3,72 -14,5 -9,3 405 10,30 -5,5 8,5 464 12,84 11,24 -12,5 -22,3 2.054 11,79 10,30 -12,6 -4,2 3.047 London 684,50 610,50 -10,8 -5,4 3.051 Franckfurt 32,48 29,05 -10,6 -2,2 472 GEOX Milan 13,70 13,37 -2,4 13,8 3.343 H&M Stockholm 405,00 388,50 -4,1 12,3 31.572 BURBERRY ESCADA ∆% mO JULY Paris 82,83 79,17 -4,4 -16,4 2.871 Franckfurt 48,11 48,21 0,2 15,6 1.767 INDITEX (ZARA) Madrid 43,43 43,05 -0,9 5,5 26.973 IT HOLDING Milan 2,17 1,89 -12,9 21,2 468 LUXOTTICA Milan 28,52 25,06 -12,1 7,6 11.452 LVMH Paris 84,59 81,99 -3,1 2,6 40.061 MARCOLIN Milan 3,22 2,85 -11,5 36,4 129 M. BURANI FG Milan 26,32 23,71 -9,9 16,6 666 MARZOTTO Milan 3,97 3,97 -0,0 15,7 270 POLTRONA FRAU Milan 3,04 2,89 -4.9 -2,0 403 Franckfurt 330,08 295,69 -10,4 -0,1 4.943 RICHEMONT Zurich 73,60 74,80 1,6 5,4 27.225 SAFILO Milan 4,89 3,57 -27,0 -20,7 1.013 STEFANEL Milan 3,21 3,00 -6,5 -1,6 158 SWATCH Zurich 349,75 361,75 3,4 34,4 12.014 TOD’S Milan 66,30 64,54 -2,7 5,7 1.949 VALENTINO Milan 34,59 34,92 1,0 12,6 2.496 HERMES HUGO BOSS PUMA 11 21/09/2007 FASHION STOCKS the decision of some investors to take profits. The summer saw the company announce its medium-term targets and its plan to change listing to the Star segment of the Milan Bourse, as well as the early repayment of its outstanding bonds. Contractions were also vittorio tabacchi - safilo suffered by other stocks, Bulgari lost 12.6%, Benetton fell 12.5% and Luxottica shed 12.1%, penalised mainly by the currency impact and the generalised selling by investors, despite the good first-half results posted. The Roman jewellery house reported an 8.9% acceleration in sales in 1H07 at current FX (+14.8% at constant exchange rates). Indeed, the stock’s downward trading levels have brought Bulgari’s valuation in line with those of its major competitors, above all Tiffany and Richemont. Meantime, Benetton posted sales growth of 10.2% in the first-half of 2007 with a 14.8% increase in EBITDA and has raised its forecast for the current year. Management now indicates a 7%-9% jump in the topline and EBITDA at least 20% higher than the year earlier. Luxottica, after its Oakley acquisition, not only announced 7.4% growth in 1H07 at current FX (+13% at constant FX), but has also upgraded its FY07 earnings forecast, which envisions a dividend payout of between €1.11-€1.13 per share versus its earlier estimate of €1.07-€1.09 per share. The eyewear company based in Agordo also unveiled its plan to create an eyewear store chain in the U.S. called ‘ILORI’, which will target the high-end of the market. The only stocks to mark favourable s u m m e r NIck hayek - swatch performances, in addition to Valentino and Hugo Boss, whose stocks are supported by the takeover bid of Permira, the private equity fund, were Richemont (+1.6%) and Swatch (+3.4%). Richemont reported 9% sales growth in the first three months of 2007 at current FX (+15% constant FX) and the Board of Directors has proposed an extraordinary dividend of €0.6 per share in addition to the ordinary dividend of €0.65 per share. While Swatch, whose trading levels have been underpinned by the stellar results announced for the first quarter, spurred net income a robust 40% on the year earlier period. After the weak markets of this summer, the trading performance of Fashion and Luxury stocks will very much depend on the global consumption trend, both in the “back-to-school” season of September-October and the Christmas holiday period. 1220 Pambianco Fashion Index JULY / AUGUST 2007 1200 - 3,5% 1180 1160 1.179,6 1.138,4 1140 1120 1100 1080 1060 1040 1.000= 1/1/2007 1020 2/7 4/7 6/7 8/7 10/7 12/7 14/7 16/7 18/7 20/7 22/7 24/7 26/7 28/7 30/7 1/8 3/8 5/8 7/8 9/8 11/8 13/8 15/8 17/8 19/8 21/8 23/8 25/8 27/8 29/8 31/8 12 21/09/2007 italy Benetton Group: revenue growth up 12% LUCIANO E ALESSANDRO BENETTON Benetton Group examined the preliminary results for the first half of 2007 and confirmed the company’s growth objectives in terms of revenue (up 10.2% in the half year compared with the same period a year previously). The Benetton Group’s net revenues in the first half of 2007 amounted to €990 million, an increase of €92 million (+10.2%) compared to €898 million in the first half of 2006. The main driver behind the increase was the performance of the United Colors of Benetton brands for adults and children, as well as the sales growth of the Sisley collection. Worth of note is the increase in sales of the recently launched Playlife, Sisley and Undercolors labels, whose sales performance should continue to rise in the next few months. Playlife has received an enthusiastic response from the market following its new positioning and collection, recording a growth of 30% compared with Spring/Summer 2006. The Sisley label is also achieving expected results. Benetton’s underwear brand, Undercolors, posted a growth of 16% in the last Spring/Summer collection compared with the Spring/Summer collection of 2006. Development continues both in domestic and international markets. In Italy, first half sales increased by over 10%. Continued growth of around 35% came from Eastern Europe and Russia and the hundredth United Colors of Benetton store opened in Russia, in the half year just ended. Expansion also continues in Asia and, in particular, in Indian. Undercolors and Playlife stores will open in India in the next few months selling the entire Benetton Group range. Valentino Fashion Group’s huge profit gain STEFANO SASSI - CEO The Board of Directors o f Va l e n t i n o F a s h i o n Group (FG) examined the consolidated preliminary results for the first half of 2007. Net consolidated sales amounted to €1.027 million in the first half of 2007, an increase of 11% compared to the first half of 2006 (€925.7 million). In the second quarter the Group boosted its growth trend reporting a 15.5% rise. Growth was a result of a positive trend on all brands. In terms of geographical results, the Group’s sales showed sustained growth in the United States in particular, amounting to €177 million, reporting a 20% (currency adjusted) rise in sales. In Europe, sales amounted to €717 million reporting a 12.8% rise. The most significant investments made in this period are the opening of 34 new directly operated stores and the updating of the Group’s IT platform. Performance in the first half of 2007, the Autumn/Winter orders’ backlog and growth in direct retail anticipate a sales increase of around 10% and an over-proportional increase in both operating and pretax profit compared to net consolidated sales. 13 21/09/2007 italy Burani targets a billion T h e G r o u p, w h i c h made its market debut in 2000, aims to hit the euro billion sales mark shortly. Family run, Mariella Burani Fashion Group has successfully melded the art of family management with stock market life and in 2006 fuelled sales of euro 668 million and net income of euro 62.97 million, GIOVANNI BURANI marking an increase of 38% and 182%, respectively, on 2005. The fashion group has delivered an average growth rate in sales of 25% in the past six years and aims to hit the billion mark in a few years time. Mariella and Walter Burani are the current creative director and president, while their two sons Giovanni (class of 1963) and Andrea (twenty months younger) both have economics degrees from Parma University and hold MD positions, the former is responsible for strategy and finance, the second for products and operations. “We have repositioned upwards, explained Andrea Burani, also through diversification. Currently, clothing fuels 45% of the group’s sales and leather-jewellery accounts for 55%, but we want to spur that weighting to 75% in the years ahead”. Ferretti and Marithé + François Girbaud create Giraffe The eagerly awaited partnership between the Ferretti clan and Marithé + François Girbaud under the name of Giraffe is u n d e r w a y. T h e n e w c o m p a n y, 40% of which is owned by Ferretti’s private holding company ( s e p a ra t e f r o m MASSIMO FERRETTI Aeffe) and 60% held by Marithé + François Girbaud, will commence production and distribution of the Designer line worldwide and Le Jean throughout Europe. Initial capital for the project was €25 million. The fashion retailer aims to open 30 new stores and 50 corner stores in the next three years and forecasts an estimated €100 million in revenue. (Extract from “Finanza & Mercati” of 7/09/07. Edited by PW) Max Mara, Maramotti scores a double LUIGI MARAMOTTI After a few years of marking time, the label now steered by the second generation – brothers Ignazio (President), Luigi (Vice President, in photo) and Maria Ludovica (Director) – has not only returned but doubled its profitability. Indeed, Max Mara Fashion Group (the parent company) spurred earnings almost twofold in 2006 and is continuing that growth also in 2007. The consolidated financial statements show net income of €83 million, versus €44.8 million in 2005. The topline also put in a good performance, increasing 20% to €1.2 billion, while EBITDA raced ahead from €50 million to €233 million. Those results attest to the forward vision of Achille Maramotti, founder of the Max Mara empire (who died two years ago), when he bought his first store in 1957. And not only because he paved the way for the fashion flag stores, with most of his competitors following suit. Today, the Reggio Emilia group, founded in 1951, is one of the world’s key fashion brands, boasting 2000 stores in more than 90 countries. Indeed, the group’s main strength is its distribution network. Ignazio Maramotti believes those favourable results are the fruit “of the strategic decisions made by the group to bolster its distribution chain”, thanks to which the label expects further volume growth in 2007. The Emilian fashion house invested around €29.3 million in its distribution structure in 2006, €8.9 million of which in commercial real estate. (Extract from “Corriere della Sera” of 28/08/07. Edited by PW) 14 21/09/2007 italy Work starts on Breganze Diesel Village RENZO ROSSO “Diesel Village”, the new quartier generale of the company led by Renzo Rosso, is about to rise at Breganze. Yesterday saw Diesel’s President and founder fete the start of construction work by laying the ‘first stone’ before an audience that included the press, the local authorities and, naturally, the entire Diesel tribe. The ceremony was followed by a countdown party in full-on Diesel style: one hour of partying for the more than 500 guests on the building site of the new head office. The architectonic project fully reflects the Diesel philosophy: innovation and creativity in its pure state. In fact, the new headquarters will not be just a cluster of work spaces, but also provide employees and their families with services such as a crèche, a multipurpose auditorium and a restaurant, without forgetting two outdoor football fields, an internal pitch and a gym. The pinnacle of the construction project was the search for cutting-edge eco-compatible solutions and the use of alternative energy sources. In addition, the buildings will be constructed using eco-sustainable and recyclable materials, such as copper, wood and glass. The creative concept was thought out by the Diesel Creative Team in collaboration with Studio Ricatti and Jacobs Engineering. The village will be immersed in greenery so as not to clash with the local surroundings, which has entailed a landscaping project commissioned to specialist company L.A.N.D., Landscape Architecture Nature Development. Artemide, 15% increase in turnover ERNESTO GISMONDI Artemide still enjoys continued growth. After an excellent 2006 yearly performance in the first six months of 2007, consolidated turnover was €16.1 million euro (+15%) compared to the same period the previous year with an increase in turnover of €8 million. The lighting designer company, which obtains 70% of its revenue from abroad, recorded excellent results in Europe - especially in the UK, (which posted a growth of 31% compared to the first quarter of the fiscal year 2006), in France, (+ 25%) and Spain (22%). Italy also did particularly well and recorded a 17% growth as did the US (+5% compared to the first quarter of the fiscal year 2006) and the rest of the world (+16%), with Russia in pole position. Lighting product design and Achemide Architectural, Archemide’s two main businesses, posted a growth of 14% and 18% respectively in the first quarter of 2006. CDA is also undergoing a few changes and has appointed 3 new members – Carlo Puri Negri, CEO of Pirelli Real Estate, Emilio Bartezzaghi, full professor of Business Management at the Politecnico of Milano and Daniele Discepolo, a lawyer and a member of the CDA of Piaggio spa. They are replacing Pietro Marzotto, Giordano Zucchi and Innocenzo Cipolletta. (Extract from “Il Sole 24 Ore” of 9/08/07. Edited by PW) 15 21/09/2007 italy Replay e Procter & Gamble make fragrance together Box Group. “From our part”, commented Heike Hindenlang, Global Marketing Director, Prestige Products, “We want to create a distinctive fragrance line which will capture the spirit of today’s young consumers by combining Replay’s innovative strength with our expertise in the fragrance market. This partnership with Replay perfectly enhances our existing portfolio and opens new growth opportunities”. SILVIA BUZIOL E MARCO BORTOLETTI A licensing deal has been signed between Procter & Gamble (P&G) and Replay to create a fragrance line. This partnership will open new growth opportunities for P&G Prestige within the young consumers segment. “We want to grow into new categories after having successful licenses for eyewear and footwear. Fragrances represent a key license for us”, explains Marco Bortoletti, CEO of Fashion Ferragamo: Cristina Ortiz named creative director of women’s ready-to-wear Salvatore Ferragamo named Cristina Ortiz creative director of its women’s ready-to-wear and her appointment will begin with the Autumn/Winter 2008 collection. She will flank chief executive officer, Michele Norsa, in a new project development for Ferragamo. Cristina Ortiz, originally from the Canary Islands, studied at the École de la Chambre Syndicale de la Haute Couture in Paris and worked as design director for Prada from 1994 to 1997. She also worked as creative director for Lanvin for 4 years and recently joined Brioni to design the women’s line. Cristina, who lives in Italy, is married and has two children. CRISTINA ORTIZ 16 21/09/2007 Exclusive Interview Bottega Veneta, true luxury is no-logo We met Patrizio Di Marco at the opening of the new Bottega Veneta store in its splendid setting of Palazzo Tornabuoni-Corsi in Florence. Forty-five year-old Patrizio Di Marco, born in the Marche region of Italy, joined Bottega Veneta six years ago when it was acquired by Gucci Group (PPR), taking what he defines as “a rather dusty brand” and transforming it into an international super-brand. The top manager, armed with an in-depth knowledge of the global luxury market gained with groups the calibre of Louis Vuitton, Céline and Prada in the United States and Japan, in tandem with creative director Tomas Maier, has adroitly positioned the Bottega Veneta brand in the rising super-luxury firmament, often bucking the trend of a market that puts the logo in the spotlight. Patrizio Di Marco President of Bottega Veneta Bottega Veneta has become one of Gucci Group’s pinnacle brands since you arrived at the helm. Sales accelerated 67% to €267 million in 2006 on the crest of 60% growth the year earlier. While EBITDA reached 24.7% of sales in 2006 from 13.9% in 2005. What is the driver of this success? Bottega Veneta’s success is driven by a number of factors where the human and organisational factor underpins the whole. Naturally, our focus on crafting the finest quality products, providing a customised service and the refined and luxurious environment are a proven mix when it comes to creating the foundations for major profitability at a level to ensure the brand’s longer term development. Bottega Veneta creates economically demanding products, so we must be coherent with the timeless and always wearable allure and style of the brand. We have pursued craftsmanship, hand-worked processes and quality: the original soul of a brand called Bottega Veneta 17 21/09/2007 who chose not to have a logo, but to use its working techniques, which are the heart of the company, to gain recognition: the hand-woven leather signature. the completion of a very fast journey (six years) that has taken Bottega Veneta from a rather dusty and “old” brand to one of the most exclusive marques in the current landscape. What was it like in the early days of this adventure? Bottega Veneta is enjoying remarkable growth in When I took over the management of the brand, the Japanese market and has become one of its most Bottega Veneta had 17 stores, only four of which were in important brands with 2006 sales reaching €90 Europe, three in Hong Kong… We immediately closed million. It therefore seemed important that we create down seven stores that were a bad fit for the label’s something special. Contrary to popular belief, Japanese future development and prestige, and reacquired the clients are demanding and sophisticated, they look for distribution rights for Japan. perfection in the details and for Then, along with Tomas Maier, a product with distinctive style, Bottega Veneta is preciuos. we prepared the first collection not its logo. This was also a first, in only three weeks so that in key step towards other possible It is and will be exclusive July 2001 we were ready with openings in major cities like our new venture. We were Osaka and Nagoya. highly confident of achieving our ambitious project because everyone was so enthusiastic and supportive. After the opening of the Florence store, what are your plans for Italy and the rest of the world? Going forward, on which strategic markets will you From the 21 stores operated in 2001 we have focus? reached 109, in the past five months alone we have We have a highly balanced sales presence in the diverse opened 13 stores worldwide. It is important that markets. Above all, we will focus on the Far East, Bottega Veneta find the most suitable locations, primarily Japan followed by China, Korea, Taiwan like in Florence, to maintain a retail policy based and Hong Kong, as well as in Europe, which is our on exclusivity because “true luxury” must not be second core market with 63% of sales, after Japan and accessible everywhere. Currently, we are defining the United States. We are also looking at the emerging store openings in Copenhagen, Kiev in the Ukraine, markets, such as India. Vilnius in Lithuania and in Moscow, while in Italy we will open outlets in Venice and Porto Cervo in You just opened a new store at Ginza, the biggest Sardinia. Our plans also include opening boutiques boutique in the world, in a five-floor building of in world cities with a strong tourist calling, mainly 1000sqm. What did that event mean to you? through a direct distribution network. But we Ginza is something of a finishing line and a starting would never neglect the prestigious international point for Bottega Veneta. Ginza is one of the busiest multi-brand and department stores, where Bottega quarters in the world, whose name itself evokes style Veneta already has a large footprint. In tandem, we and exclusivity, which is also a little like the essence of are developing a store franchise network, recently our brand. For the company, the opening has signified enriched with new openings in Saudi Arabia. A/I 2007-08 Campaign Florence 18 21/09/2007 rest of the world Adidas takes on Nike Who will win the Beijing 2008 Olympics? Will America’s Nike win the Number One brand race in the sports shoes and sportswear b u s i n e s s. O r will it be beaten to the post by German rival Adidas, official sponsor of the Chinese games? The sales results related to the event will be a determining factor also in the stock market performances of the two companies’ shares, the former listed in New York, the second in Frankfurt. The first six months of 2007, saw Nike cross the finish line first, rallying 8% in one day alone on 27 June, after posting its results for the quarter closing end-May. Wall Street loved both the 32% sprint in profit and the announcement that the orderbook to November had swelled 12% in Europe, Africa, the Middle East, 19% in Asia, and by more than 9% in the U.S., a market already dominated by Nike, where it recently suffered a slowing due to the fall in mall traffic. Analysts rate Nike a “buy in moderation” yet remain neutral on Adidas. But the race is far from Hugo Boss: sales up by 11% won. Despite the 45% surge in trading levels in the past year, “Nike still has room to run”, says The Fool, the value investing website. Nike actually boosted its share from 79% to 83% of the U.S. basketball shoes market, worth $3 billion and where the models inspired by ex-champion Michael Jordan are still going strong. Now, with the $90 million sponsorship of new star LeBron James, Nike is aggressively looking to conquer China, whose basketball public is sharply growing in number, thanks to the successes of net player Yao Ming. Adidas can expect a good 2007, driven by the advertising success of its sponsorship of the world football championships in Germany and hopes to score a double hit with the Beijing Olympics, in which it is estimated to have invested $100 million in cash and extras, such as the uniforms of the 40,000 volunteers and other staff who will work at the games. In China, the German company already has 2500 stores, a figure it plans to double by 2010. (Extract from CorrierEconomia of 9/07/07. Edited by PW) Swiss Made gets tougher rules Hugo Boss continues its strong sales performance with group sales up by 11% to €794 million in the first half of 2007 compared to €712 million for the same period a year previously. Net revenue amounted to €64 million with an 18% growth. Sales rose by 8% in Germany, whereas in the rest of Europe, sales were up by a substantial 17% to €382 million. Central and Eastern Europe made a strong contribution to this growth with a sales increase of 40%. Boss Women’s Wear label generated sales of €100 million (+38%). Boss Shoes e Leather Accessories label generated sales of €89 million (20%) and €109 million (+27), respectively. Swiss Made watches are heading for tougher standards, seeing that the general meeting of Fédération de l’industrie horlogère suisse (FHS), the Swiss watchmakers industry association, has voted to present the Government with a proposal defining tougher regulatory framework. The Swiss-based firms have come up with a new value criterion, proposing that in the future a mechanical Swiss watch be defined as such only when at least 80% of production costs can be attributed to operations done in the Confederation. That level is reduced to 60%, however, for other types of watches, especially electronic. Indeed, the proposal indicates that also the technical work and the prototypes must be constructed in Switzerland. At present, three main rules define “Swiss Made” final products: a Swiss movement, a case made in Switzerland, and controls effected by a producer based in the Confederation. (Extract from Il Sole 24 Ore of 7/07/07. Edited by PW) 19 21/09/2007 rest of the world Swatch: strong growth in first half year NICK HAYEK In the first half of 2007 Swatch Group increased its net income by 39% and its expectations for the second half-year are high. This is based on the outstanding performance on sales registered in July and the beginning of August. The world leader in the watch industry reported a net profit of CHF460 million, (€280 million), and gross sales climbed by a sub- stantial 17% to CHF 2,74 million. According to Patrik Schwendimann, an analist at Zurich Cantonal Bank, these results have clearly exceeded expectations. Operating margin has increased by 17% to CHF511 million. The company does not release quarterly results, however, shares jumped 3.7% to CHF352.75 million. Crocs add new apparel line Crocs Inc, American footwear manufacturer, is a rapidly growing company and has taken the idea of brand diversification to new heights with the introduction of its first apparel line for men and children. The company based in Niwot, Colorado, is known worldwide for its colourful funky footwear made out of a special material known as Croslite. Crocs Inc unveiled its new line of clothing at Magic Market Place in Las Vegas a few days ago. The apparel for men and children (male and female) will be introduced this October at U.S. retailers and will be available through the Crocs’ Website. (Extract from “Fashionmagazine.it” of 30/08/07. Edited by PW) 20 21/09/2007 rest of the world Esprit’s net profit up by 27% Kenneth Cole: second quarter results slightly down Kenneth Cole reported its financial results for the second quarter of 2007. Net revenue amounted to US$118.9 million with a slight decrease of 12% compared to US$135.3 for the same period the year previously. Licensing revenue has increased by 2.2% to €10.6 million compared to €10.4 million for the same period the year previously. Kenneth Cole, President and CEO of the company said “I am confident that the investments we are making will pay off”. In the next quarter he expects an increase in net revenue ranging between US$130 and US$135 million. Hong Kong-based fashion lifestyle retailer, Esprit Holdings, reported that its net profit jumped by 26.9% to HK$29.6 billion (approx. €2.8 billion) compared to the same period the previous year. The fashion retailer says it aims to open 100 new directly operated stores and renovate existing retail shops, investing over HK$1 billion, with a view to expanding sales. It also plans to add 2,000 new retail outlets. Esprit’s new brand, Edc, will reinstate its image in Europe and Asia through the partnership with MTV. For the year ended June 30, the company’s operating profit margin amounted to HK$5.2 billion (up 39%) with a net profit margin of HK$5.2 billion (up 38.6%). The retail segment delivered a strong turnover growth rate of 32.2%; while the wholesale segment recorded a solid turnover growth rate of 23.4%. KENNETH COLE (Extract from “Fashionmagazine.it” of 30/08/07. Edited by PW) HEINZ KROGNER Vogue takes its glamour to India Gap’s profits rise After more than 2 years of sales decline, the American retailer G a p, p o s t e d a p r o f i t increase.Gap Inc. posted second-quarter profits with a 19% increase in net income to US $152 billion, helped by cost-trimming efforts. The company eliminated 2.200 positions from February 2007. Although Gap’s results were encouraging, sales for this quarter fell to 1% to US $3.7 million. In the first 6 months, the company’s turnover increased by 1.1% to US $7.2 billion, while net profits decreased by 10.5% to €331 million. (Extract from “Fashionmagazine.it” of 27/07/07. Edited by PW) A year after its announcement the Mumbai printing presses of Condé Nast are gearing up in readiness for the launch of Vogue India slated for 22 September. Alex Kuruvilla, managing director of the American group in India, spoke to the Financial Times about the publisher’s ambitions in the subcontinent, announcing that the launch of the fashion world’s historic magazine will be followed in turn by the publication of the group’s other magazines such as Glamour, GQ, Condé Nast Traveller and Vanity Fair. The arrival of the foreign press usually opens the door to interest in the local market. So imagine the debut of Vogue, the epitome of international glamour and luxury, who, from Mumbai, will mix local tradition with Western vision in its quest to capture the emerging wealthy classes (second only to Singapore according to a research report by Cap Gemini-Merrill Lynch on individuals with a net worth of one million dollars). 21 21/09/2007 rest of the world Carrefour challenges Zara with low-cost clothing brand A year ago, Carrefour, the world’s second largest retailer after Walmart, decided to revamp their 25-year old Tex mass market clothing label and turn it into a full-fledged women’s label. Then they decided to take it one step further. They teamed up with the international leader in women’s ready-to-wear designer clothing, Bcbg -Max Azria. Based in Vernon, California, this Group is worth US$650 million and operates in 29 countries under brand names such as D o r o t h é e b i s, Max and Cleo and Herve Leger, a m o n g o t h e r s. The outcome? A fashion show held in Paris on 1 5 M a y, w i t h the Management Board of C a r r e f o u r present, including its Chairman. The contemporary line, Max Azria’s A/W collections were slated for mid-August delivery in 500 hypermarkets in Italy, France, Spain, Belgium, Po r t u g a l a n d G r e e c e. T h e collection includes dresses, suits, trousers, shirts and accessories such as handbags, belts and shoes. “We are strong retail distributors of household products and provisions but we have no fashion industry know-how”, explains Giuseppe Brambilla, CEO of the Carrefour Italia Group. As a result, Carrefour sought the help of professional fashion designers to revitalise their retail apparel business. While most brands such as H&M teamed up with designers like Karl Lagerfeld and Stella McCartney for their mini one-off collections, Carrefour commissioned only one designer to produce their entire collections. Is the giant of European supermarkets really up for challenging the likes of H&M, Zara and Benetton & C? “Our range will be sold at very competitive prices, without a doubt. The collection is fresh and contemporary and we are looking to convert this brand into a full-fledged fashion label”, explains Giuseppe Brambilla. The Franco US designer has also been commissioned to produce a more ‘fashionable line’ that will be updated monthly throughout the year. (Extract from “Panorama” of 20/08/07. Edited by PW) Guess: Second quarter 2007 revenues, an increase of 48% The Amercian company, Guess, founded in the early 80s and led by Paul and Maurice Marciano, have reported financial results for the second quarter of its fiscal year. Revenues have increased by 48% to a record US$388.3 million and net earnings increased by 82% to US$37.5 million. The European segment was especially strong with a 121% increase in revenues. Strength in the Asian market, driven mainly by South Korean operations, contributed to a 75% revenue increase. The licensing business also continued to perform well posting revenue growth of 51% in the quarter. Strong performance in North America led to a 21.4% revenue increase (a 16.2% same store sales increase). 22 m&A Aicon acquires Sicily’s Morgan Shipyard LINO SICLARI Lino Siclari of yacht-building group Aicon has made his first acquisition in the form of the Morgan Yacht mark, the Sicilian shipyard founded in the early 20th century by Leopoldo Rodriguez. Indeed, Siclari, who was advised by UBM, only recently gave his approval to the final details of the agreement to acquire Morgan’s yacht production, which will remain in Sicily. Morgan Yacht pow- Luxottica gets the go-ahead to purchase Oakley The U.S. Federal Trade Commission has granted early termination of the antitrust waiting period for Luxottica Group’s purchase of Oakley. However, other conditions to LEONARDO DEL VECCHIO the closing of the deal still remain outstanding, including obtaining certain antitrust clearances as well as the required approval of the transaction by Oakley’s shareholders. Luxottica Group and Oakley expect the transaction to close in the fourth quarter of 2007. ers annual sales of around €10 million and reaps roughly 30% in profitability, in line with that of Aicon. A new industrial company will be incorporated for producing the yachts in which Aicon will have an 80% interest, while Leopoldo Rodriguez will hold 20%. The transaction, valued at around €4 million, is part of the growth-by-acquisition plan crafted by the group helmed and founded by Lino Siclari. Before setting its sights on Morgan Yacht, the Sicilian group shopped around and looked at different shipyards in the past months, including Wally Yacht, which then saw French-Bulgarian businessman Atans Salabaschew enter the shareholder structure with a minority stake. Aicon reported consolidated revenue of some €38.4 million in 2006-07, marking a hefty 67.8% jump on the around €22.9 million generated in the year-earlier quarter, while in the first half of 200708, the yacht-maker spurred sales to €54 million versus total sales of €59 million in 2006-07. (Extract from Il Sole 24 Ore of 2/08/07. Edited by PW) Hermès acquires Soficuir Hermès International, who previously owned 49.6% of Soficuir International has acquired the company’s remaining shares. Soficuir Group includes TCIM (Tanneries des Cuirs d’Indochine et de Madagascar) a company specialising in tanning precious skins, primarily, crocodile skins. This acquisition will enable Hermes, which already owns 100% of Gordon-Choisy, a company specialising in the tanning of exotic leathers, to reinforce its tanning capacity. The Soficuir group operates in France, Italy, the United States and Switzerland. It generated consolidated revenues of €56 million in 2006. 23 21/09/2007 SHOP openings Prada strengthens its retail presence in China Prada inaugurates two tiques in China – one and one in Shenyang, tal of the Liaoning new bouin Beijing the capiProvince – strengthening its Chinese store network, which today boasts a total of nine stores. Prada’s boutique in Beijing, located in the China Central Plaza departm e n t s t o r e, f a c e s Chang’an Avenue and sells men and women’s clothing, footwear, and accessories. T h e s t o r e, c o v e ring a total of 400 sq metres, is organized on two floors, which are connected by a black marble staircase with smoked glass sides. The second store, located in the famous industrial district of Shenyang, sells women’s clothing, accessories & footwear, men’s footwear, and the travel collection. Audemars Piguet conquers Ginza Marlboro Classics opens in Kiev Marlboro Classics is about to enter the Ukrainian market with the opening of its first exclusive store in Kiev. The store is located in Arena City, the shopping centre in the heart of the Ukrainian capital, known as Ul. Krasnoarmejskaya Bassejnaya, and also sells international clothing brands, cosmetics and luxury cars. The store covers 100 square metres and houses the entire Marlboro Classics collection. Net revenue amounted to € 160 million with an 18% growth compared with the same period a year previously. On July 11 & 12, Audemars Piguet (AP) opened its new boutique in Tokyo’s well-known Ginza district, a highly sought-after location. The boutique is spread over the first two floors of a 10-storey building and is the ideal showcase for the brand’s mechanical creations. The rest of the building houses operations such as customer s e r v i c e, o f f i c e s and a VIP lounge located on the top floor. Yasumichi Morita, renowned designer and architect, created a bold façade to highlight the building’s distinctive structure. 24 21/09/2007 SHOP openings Espressamente Illy to open 105 coffee shops in China The first step, one year ago, was to open a Shanghai-based company for the purpose of “making preliminary commercial contacts and to study the espresso coffee consumption potential of the great Chinese market”, said Andrea Illy, president of the Italian coffee producing company, at the time. Illy closed 2006 with sales up 8.5% to euro 246 million, when it invested euro 47 million, and net income of euro 5 million. Today, the actual launch is the fruit of two joint ventures with the local companies chosen to manage the opening of the 105 Espressamente Illy stores by 2012. After China, the company’s sights are set on Vietnam, South Korea and New Zealand with plans to open a total of 72 coffee shops. All in less than 48 hours. One of the two partners of Illycaffè is Great Wall Enterprise corporation, a diversified food group listed on the Taipei exchange, who will be entrusted with the implementation of 75 outlets, 58 in the People’s Republic and 17 in Taiwan. Illy’s other partner is Hong Kong’s listed Cafe de Coral group, where it manages a large restaurant network that stretches across the whole of China. The agreement calls for the opening of 30 Espressamente Illy franchises in the areas of Hong Kong and Macao, the first slated to open midSeptember in the international airport of the excity state. Once on stream, the two JV are expected to develop a business turnover with a present value of euro 34 million. Foreign markets drive 54% of Illy’s sales and the Italian coffee producer’s internationalisation project also targets the Middle East, where a couple of months ago it struck an agreement with Aida Trading Establishment to open 25 coffee shops located in the major Saudi Arabian, UAE, Bahrain, Oman and Kuwaiti cities by 2009. (Extract from “Il Sole 24 Ore”, 7/07/07. Edited by PW) Shop openings in short Nike and Adidas Open Mega stores in Beijing First Flagship Store Miss Sixty/ Energie in New York Nike opened its 1,200-squaremetre flagship store in the heart of the Chinese capital. Adidas, on the other hand, announced the opening of its largest ever store (3,000 square metres) to coincide with the Beijing 2008 Olympics. Nike has been doing business in China for more than 25 years and it is poised to be a $1 billion (€726.2 million) business. Adidas currently has 3,000 stores (owned by partner companies) and 550 Reebok stores and also plans to reach sales of US$1 billion by 2010. (Extract from Sixty Group is getting ready to debut its first NY flagship store this Autumn and has staked out 2 floors in the old Lord & Taylor building at 901 Broadway, displaying the Italian cobrands Miss Sixty/Energy. The space will serve as Energie’s first flagship store in New York City, situated in one of the most important shopping locations in the world - the Flatiron district, Sixty Group’s sales have increased by 40% in the last year with a forecast sales increase of 40% for the year 2007/2008. “Fashionmagazine.it” of 30/08/07. Edited by PW) 25 21/09/2007 ads & EVENTS Armani Lounge for Chelsea Football Club Giorgio Armani has been commissioned by Chelsea Football Club to create a new look for its Gold mine Beckham nets Real euro 440 million The coffers of Merengues have swollen enormously in the past four years, thanks to the English soccer player. As confirmed by Real Madrid’s marketing director, Jose Angel Sanchez, in an interview with financial daily Cinco Dias. In four years, David Beckham, has enabled the blancos club to net something like euro 440 million. After paying euro 36 million to get the player into a Real Madrid white shirt, Beckham won the team only a championship and the Spanish Cup. Nevertheless, that performance was offset by the revenue stream. Indeed, the first six months after his arrival at Vicente Calderon saw the club sell one million extra shirts. Neither should we forget his many official appearances, especially in Asia, which channelled some significant sums into the coffers of Real Madrid, who of course thanks the star footballer. Now let’s see what Beckham manages to do for Los Angeles Galaxy. DAVID BECKHAM Directors’ Suite at Stamford Bridge stadium in London. The exclusive Armani Lounge will be the main meeting place for both the Chelsea Board of Directors and for the entertainment of VIP guests. The “Armani Lounge” covers 200 square metres divided into two adjoining sections: the “Directors’ Bar” and the “Directors’ Dining Area”, personally designed by Giorgio Armani. The result is an extremely sophisticated environment with the walls throughout in a mirrored bronze colour or alternatively clad in bronze metal effect laminates with marble flooring, warm diffused lighting from ceiling spotlights and table lamps from the Armani/Casa collection. Both areas are provided with wall mounted plasma screens to show the games live. Julian Schnabel Awarded the 2007 Gucci Group Award Julian Schnabel and robert polet American artist Julian Schnabel received the 2007 Gucci Group Award from Robert Polet, President and CEO of Gucci Group, at a ceremony held at the Palazzo Grassi during the 64th Venice Film Festival. Schnabel was honoured for his direction of “Le Scaphandre et le Papillion” (“The Diving Bell and the Butterfly”). The Gucci Group Award is bestowed to an internationally-acclaimed artist who has made a remarkable contribution to a film in any capacity within the past 18 months, as a director, actor, screenwriter, set designer, or costume designer. Upon receiving the award, Schnabel said, “Painting can be compared to life, it is about optimism and faith. Artistic expression is the embodiment of hope.” “Julian Schnabel’s ‘Le Scaphandre et le Papillion,’ perfectly encapsulates the essence of the Gucci Group Award which recognizes and honours visionaries who bring art to life on screen,” said Polet. 26 21/09/2007 ADS & EVENTS New Guess campaign prompts oriental reflections The new Fall/Winter 2007-08 advertising campaign for Guess by Marciano marks the return to a chic, modern and sophisticated elegance that teams timeless style with that latest and most poetic of fashion destinations, Japan. The images depict an elegant and refined threesome surrounded by a bright white blanket of snow just outside urban Tokyo. The models are enveloped in a highly suggestive atmosphere of fantasy and desire where nature predominates in the delicate nuances of winter and where the red maple trees make a stark contrast to the luminosity of the sky. The soft and mellow colour palette reveals natural bamboo and pine shades, contributing to the refined stasis of a rarefied, highly serene air. The creative direction of Paul Marciano ensured that well-known photographer Yu Tsai captured the beauty and enchantment of nature to frame the refined elegance and sensual glamour of the Fall/Winter 2007 GUESS by Marciano collection. Carolyn Murphy & Patrick Demarchelier for 7 For All Mankind The Autumn/Winter 07-08 collection of 7 For All Mankind will be truly interesting. The brand, created by Peter Koral, has recently passed into the hands of VF Corporation. The launch of its first advertising campaign features Carolyn Murphy, the international top model, who embodies true American beauty. The campaign was shot by renowned photographer, Patrick Demarchelier; 7 images that exalt and highlight the design and details of the clothing range and accessories. The first exclusive store is located in the heart of LA, needless to say. Gorbachev is the new face of Louis Vuitton MIKHAIL GORBACHEV The former Soviet Union leader, Mikhail Gorbachev, will be featured sitting in the back seat of a car driving along a remnant of the Berlin wall. He is not making an appearance in an historical film; he is the face of one of Louis Vuitton’s print ad campaigns. The ad shows the father of “perestroika” sitting next to a Louis Vuitton bag. Gorbachev accepted to take part in the ad to communicate how a brand can change and broaden its appeal in new markets. The campaign will appear in magazines in the Autumn. Pietro Beccari, director of Marketing at Louis Vuitton, said “The campaign is built on the idea of a journey, an experience that changes the lives of both the individual and figureheads.” In 1997, Gorbachev starred in a television ad for Pizza Hut, which was not aired in Russia. This time, the Louis Vuitton ad campaign featuring Gorbachev, photographed by Annie Leibovitz, will appear in magazines in Russia by September. The money earned from the campaign will be used towards the Gorbachev Fund publication projects. (Extract from “Corriere della Sera” of 1/07/07. Edited by PW) 27 21/09/2007 G desi ners PIERO LISSONI Piero Lissoni, the designer who never wants to grow up Piero Lissoni, the Italian designer who in 2005 was awarded a place in America’s Halls of Fame of Interior Design, one of the highest industry recognitions worldwide, recently celebrated his 50th. A milestone in a professional career that has seen the designer test his skills in the most disparate fields. Infusing not only home objects and furniture with his crisp and essential design, but also homes, hotels, showrooms, restaurants and yachts planet-wide. In addition to an eclectic range of design objects, Lissoni has designed a number of showrooms, from Boffi’s to Cassina’s, the Milan store of Porro, American fashion designer Elie Tahari’s store, the Mitsui Garden Hotel at Ginza, the Hotel Monaco & Grand Canal, the Zanini cake and pastry shop in Venice, the new Milan offices of La Rinascente group, and the interiors of the Shangri-La Hotel & Living Residence in Miami, due to open next year. Self-profiled as incoherent, lover of imperfection and infected with the Peter Pan syndrome, Piero Lissoni currently lives and works in Milan from his studio staffed with more than 70 collaborators that he defines as “the realm of anarchy”. He is very rarely apart from his three golden retrievers, who never let him out of their sight: Sofia (with eyes as beautiful as those of Sophia Loren, he explains), Caterina (with the authoritarian nature of Catherine the Great of Russia) and Sati (like “Satisfaction”, the Rolling Stones’ hit). 28 21/09/2007 G desi ners Friz Hansen Collection Mamilla Hotel, Jerusalem Do you ever think you could have been something else other than a designer? As a boy I thought I’d be a ski instructor and I did come close. I thought it would be a profession of never-ending holiday, surrounded by lots of beautiful girls… That aside, I love the mountains, for their infinite contact with nature, albeit with perceptible measures; I can go mountain-climbing with the friends with whom I share mountain experiences and remain a long time in silence, a silence loaded with words, as happens only in the mountains. What led you to choose this profession? I chose to become an architect because it is the profession that enables you to prolong childhood games more than any other. Indeed, as a kid, one plays with small bulldozers, as an adult I deal with the big construction site bulldozers, first you build Lego houses and then you build them with bricks and cement. In essence, design is architecture applied to objects of everyday use. You’ve been defined as the “poet of minimalism”, can you identify with it? If minimal means simple and not stripped down, then yes: I like a kind of approach to simplicity, understood as a diverse way of imagining life. Humans are complex animals, sometimes complicated, and simplifying their life through my work is something that gives me satisfaction. Your son works with you. He even seems to have promise: the cow he designed for the Milan Cow Parade fetched a record-breaking €24,000 at the auction, the highest price of them all… What advice do you give him? Francesco, who is now 25 years old, is temporarily on my team but is responsible for 3D images, so he works exclusively on the computer, after which he will go abroad for a while. My advice to him, as it would be to any young designer, in any field, is to go to India or China, as well as London, which are still places that breathe creativity. These are enthusiastic-minded countries that offer the right creative hummus for Mandarin Hotel, Dellis Cay 29 21/09/2007 G desi creative professionals. My advice to those who want to embark on this career, either as an architect or designer, is to acquire a basic foundation in the arts: what use is being able to talk the refined language of nano-technology and molecular modifications if you know zero about Ancient Greece? I would also advise reading poetry and lots and lots of books: literature is a way to interpret life. The studio boasts a library of 5000 volumes. In what way is your creative process influenced by the needs of the beneficiaries of your projects? Yes, everything around me. I am incredibly curious. As designers we are often healthy “ego carriers”, therefore we don’t much think of the final user. Industrial design and its use, however, are two inseparable elements. I design with a team that translates the needs of the client company and not thanks to my illuminating vision. The creative process is a shared enterprise, with feedback flowing between me and the rest of the team and the client. When can you say that a product designed by you is a “success”? The banal reply would be “when it sells well and I receive some hefty royalties”, but those products are not always the ones that give me the most satisfaction. Some projects I really love have worked out less well. I don’t believe in the marketing geniuses that decree how successful the product will be. Sure, I understand the techniques that trigger certain logics and interpret certain behaviour, but it annoys me when the studies and analyses are used to ensure that one thing rather than another is more acceptable. Would you agree that design has expanded its horizons to encompass almost any field? Not quite, for example, I believe that food design is a sign of decay. I agree with advancing the evolution of food in terms of the sensorial nature of flavour, of the various levels of perception, but food design concerns ners solely the aesthetics, at the risk of abusing its essence. This is a case of meddling with design that I could well do without. What is your idea of contemporary beauty? Contemporary beauty is the result of the stratification of past elements that have their own history and life. Only ignorant people buy everything brand new and obviously so. An example of contemporary design that I really like is the new Fiat 500, which, stripped of its less beautiful parts, evokes the idea of playfulness and pleasure, highly modern but with strong references to the past. Is there something from which you would never be separated? Not really material objects, which come and go, but affections, I could never give up the friendship I have with the persons I love. I know it seems banal, but that’s the way it is. How do you see yourself ten years down the line? The same as now. Sometimes people accuse me, usually theocratic moralists, of having a Peter Pan syndrome. My grandfather used to say that there is always time to get old, even Peter Pan grows, he just doesn’t get old. It’s like I said before, my job lets me play continually. Is there something you haven’t yet done and that you’d really like to design? Can I confess. Well, actually, every so often I think I’d like to design the liquorice stick that holds lemon ice cream. I went nuts for it as a kid but I could never really enjoy it to the full because I’d get so messy and I found it really non-functional. Here we go again with the Peter Pan syndrome… Is there a future project that you hold dear to your heart? Yes, but nothing to do with work…I’d like to go to bike-riding around Chile. Jetty Livingdivani Sidewall Porro 30 21/09/2007