Ferragamo stretches its legs in Britain
As its enlarged London flagship store opens, Laura Chesters meets the man who rolls up his sleeves to make sure everything is perfect
Saturday 11 August 2012
Within the walls of an overwhelmingly chic Mayfair boutique, Michele Norsa is looking at ways to display Salvatore Ferragamo's calfskin and crocodile men's belts. The £200, exquisitely made, Italian leather belts with gun-metal buckles deserve better exposure and Norsa, Ferragamo's chief executive, is rolling up his sleeves to make sure the newly made-over outpost in Bond Street is looking its best.
Norsa has a duty to his employer, and its famous clients, to make sure its shops look as beautiful as the well-crafted clothes, shoes and leather goods that they sell. Ferragamo, shoemaker to the stars, counted Marilyn Monroe, Audrey Hepburn and Greta Garbo among its fans and has just hired British supermodel Kate Moss as its "face" for this autumn.
Norsa is visiting the Old Bond Street store – which has been home to Salvatore Ferragamo for 74 years — after paying what is thought to be the UK's top rent, estimated to be £1000 per square foot for the most important part of the shop, to renegotiate a bigger store and longer lease. No wonder he wants it to look its best."London is very important to us. It is growing very fast and we have shoppers from all over the world who come here."
Tanned, smiling and impeccably dressed in Ferragamo, Norsa is clearly at home on the shop floor in spite of years in the board room of companies including Sergio Tacchini and Valentino. As he justifies the top rent Ferragamo is paying, he is surveying his emporium of Italian style – from the new lights to the menswear floor.
"We have made the store 60 per cent bigger. London's rent is going up, of course, but it is fair. We were able to take a long view and invest in the store. Bond Street will be here forever and we want to make sure we keep this beautiful store," he says.
But it isn't just Bond Street that has had a makeover. Its other London spot — Sloane Street will double its floor space this year over three floors — to give more space for the £350 Vara bow heels or the £2300 python skin handbag.
London is just one of Ferragamo's important global "flagship" cities. Three new stores are planned for China this year to add to its 320-plus outlets. The luxury goods obsession with giant, shiny new stores to showcase growing collections is now a global phenomenon with identikit Prada or Louis Vuitton stores from Sloane Street to Sao Paulo. And now Ferragamo's expansion is being closely watched by investors after its listing in Milan just over a year ago.
Norsa, having spent most of his career at family-owned companies in Italy, joined Ferragamo in 2006 — the first non-family chief executive. He took over from Ferruccio Ferragamo, the eldest son of Salvatore, who is now chairman. It was the first step in modernising the group. The family shareholding is complex. Salvatore Ferragamo had six children and Ferruccio also has six; there are a total of twenty-three grandchildren.
The family decided to sell a 25 per cent stake — to raise money for expansion and free up capital for some of the family. And for Norsa "working for a listed company is a nice challenge."
At the time of deciding to go public, the markets ran wild with rumours that the family were looking at following fellow Italian fashion brand Prada to Hong Kong. But Norsa says: "Italy is part of our DNA. You can get all the advantages that you can get anywhere. And being listed in Italy doesn't mean we do not have investors from elsewhere. We have many overseas investors." Indeed Peter Woo, a Honk Kong-based businessman who owns a stake in Ferragamo, became a board member.
Making sure the company is synonymous with Italy means every single item — bar the Swiss-made watch parts — is made in that country.
When in the Nineties, clothing manufacturers started moving east for cheaper labour, luxury brands including Prada and Burberry followed the trend with swathes of the business being farmed off to factories in Turkey, Thailand and China. But unlike most of its peers Ferragamo stayed put. "It is a commitment but it is something we truly believe in."
The decision by some brands to move production from their home countries is still having repercussions today with a renewed consumer backlash at some brands.
Norsa has seen first-hand the factories that England used to be proud of. "I have visited these factories in Scotland and in England. Now people recognise the value of knowing where something is made. It is now very important for the shopper to know where and how it is made." The growth of luxury brands in the Chinese market has been fuelled by a desire to buy something which is "made in Europe".
Ferragamo is not quite as old as French brands Louis Vuitton or the Hermès but it certainly has a vivid archive. Having started life as a shoemaker in a small room in Florence in 1927, it now has a market capitalisation of £2.6bn, selling everything from leather goods and watches to perfumes and ready-to-wear for men and women. It is one of the best known classic luxury brands — known for comfort and style.
The history is important but it is Norsa's job to make sure his creative director — Massimiliano Giornetti — keeps the brand relevant.
"We have been very good at keeping the heritage through to the present. But through events, marketing, social media and digital we have to make sure we stay in touch with our customers. People want to be in touch with the brand."
The strategy has paid off so far. Last year revenues were up 26 per cent to €986.5m (£629m) and will update the market with its first half results for 2012, this month.
Ferragamo's rich Italian history might be in vogue with consumers in Asia, but the region's growth spurt could be losing steam. Fears of a Chinese economic slowdown are causing shares in luxury goods brands to fall and the likes of Hugo Boss and Burberry have reported slower growth in the region.
But Norsa is sure growth will continue. "We are still seeing significant growth. Of course there are concerns on the future but … reassuringly we have seen Chinese consumer confidence is still strong," says Norsa. "And there are still so many Chinese consumers who are only just making their very first step into luxury."
China's luxury shoppers join Brazilians, Arabs and Russians in Bond Street and Norsa is reeling off the nationalities which visit his London stores. "Here in London we have something very unusual. Nigerians are in our top three.
"We have to make sure we have every size available for the different types of people who shop with us. And now we know exactly when Ramadan, Chinese New Year and Russia's Orthodox celebrations are."
With Bond Street a hot spot for the travelling global wealthy, Norsa's shopkeeping nous is paying off.
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