Francesco Trapani: The Bulgari nephew who turned the ship round

A finely crafted silver spoon in your mouth is no substitute for hard work, as the scion of the legendary Italian brand tells Stella Shamoon

Francesco Trapani has worries the rest of us can only dream of. The multi-millionaire boss of Bulgari has been working so hard to keep the jewellery and luxury goods group profitable through a three-year downturn that he has hardly had time to enjoy his yacht. The 42-metre boat, purchased in 2001, was mainly docked in the yard in Viareggio as the single-minded Roman put in long days in the office to "re-engineer the business".

Francesco Trapani has worries the rest of us can only dream of. The multi-millionaire boss of Bulgari has been working so hard to keep the jewellery and luxury goods group profitable through a three-year downturn that he has hardly had time to enjoy his yacht. The 42-metre boat, purchased in 2001, was mainly docked in the yard in Viareggio as the single-minded Roman put in long days in the office to "re-engineer the business".

At the height of the dot-com boom, when overpaid bankers were hungry to own a Bulgari bauble, bangle or must-have watch, the group was valued at more than €4bn (£2.7bn). At its nadir, when many potential customers were either out of work or had not received their six-figure bonuses, its value fell to a quarter of that.

After three years which Trapani says were "difficult" but also "productive", the group is back on track. Production costs have been slashed, inventory cut by €100m plus, and more sales squeezed from the 180 stores worldwide. Bulgari's net profits last year rose 21 per cent to €92m - representing a flashy 12 per cent margin on sales up 5 per cent. The first quarter figures, out last week, showed net profits up 18 per cent at €13.5m. Bulgari's market value is now €2.3bn, and as Trapani owns a 4.5 per cent stake, his personal wealth looks a lot more healthy than a year ago.

Small, muscular and tenacious, Trapani enters his office at Bulgari's headquarters in Rome dressed in a well-pressed beige corduroy suit. He may be Italian when lunching, but he studied business administration at New York University, and his "obsession" over the past 10 years has been to get Bulgari in shape to compete in a global marketplace.

Trapani is the son of a surgeon and Lia Bulgari, the elder sister of his uncles, Paolo and Nicola. She was paid out for her share of the business some years ago. Lia and her brothers, who are the grandchildren of the group's founder, Greek silversmith Sotirio Bulgari, were born rich. Paolo and Nicola still own 49.6 per cent of Bulgari and Trapani 4.7 per cent to seal the family's control.

Trapani became chief executive of the group in 1984, aged just 27. However, he abhors the nepotism, apathy and mediocre management of many Italian family-owned companies in the luxury market, and says some of them have "lost it big time".

Bulgari, according to Trapani, is a prince among upmarket jewellers, and newcomers into its realm pose no threat. On the contrary, the likes of Giorgio Armani, Chanel, Boucheron (owned by Gucci), Chaumet (part of LVMH) and, not least, De Beers have spent millions on advertising and thus showered stardust over the smaller Bulgari.

"The newcomers have attracted the attention of clients to their branded jewellery. But anyone who wants to spend €70,000 plus on a piece of jewellery will go to an established high-end jeweller. Cartier, Tiffany and Bulgari have a position in the market that is difficult to challenge today."

The "distance" between the aura of Bulgari and that of Cartier, three times larger and established in 1847, "is closing", insists Trapani. Just a few steps across Rome's sumptuous Via dei Condotti, which sweeps down from the Spanish Steps, the flagship stores of the two rivals glare at each other.

One of Bulgari's windows boasts a five-row necklace of marble-sized uncut gems of jelly bean hues. It is part of a lower-priced collection called Sassi, meaning "stones" in Italian, which has indeed generated sassy profits. Priced at €26,400, the necklace is an amusing trifle compared with the €500,000 diamond example inside the store.

Yet both pieces typify Bulgari's audacious drop-dead glamour in design. They also speak of the house's craftsmanship. Trapani says its "more intelligent" use of precious materials has worked greater "cost efficacy" into the design of its high-end jewellery and raised margins without loss of sex appeal.

Sales of Bulgari's jewellery rose 13 per cent last year, to just over 40 per cent of group total. The less expensive items account for the biggest profits; the more valuable pieces maintain the aura.

"We have been serious jewellers since the 1920s, so we have the authority and authenticity to sell expensive items," explains Trapani. "At the same time, our designs are less traditional than those of our competitors. We are closer to fashion and to movie stars. That gives us brand appeal at the less expensive end of the market, where we sell items priced at a few thousand euros."

He candidly admits that failure to stimulate demand with creative new designs has hit the business in the past. "We work in economies where people are rich. They have everything. They are spoiled and they do not need to buy anything. The only way to convince them to buy something they already have is to offer products so desirable they cannot resist."

Since Trapani became chief executive, more of Bulgari's distinctive, wholly owned stores have opened around the world and the group has diversified into fragrances and silk and leather accessories. The first Bulgari hotel will open in Milan this week; the second is scheduled in Bali next year. These are showcases for the brand, but require insignificant capital and management resources since the Marriott hotel group will run them.

As head of the family firm, Trapani has had to box clever to keep in the good graces of, on the one hand, "the governors", his fastidious and uncompromising uncles, and on the other, the fickle financial community in New York, Milan and London. Bulgari went public on the Milan Stock Exchange in 1995 to finance global expansion. But it remains an intimate private empire.

His grandmother, Leonilde, la Mama of Trapani's uncles, recently passed away, aged 102. She left three sons, not two: the eldest, Gianni, designed the iconic Bulgari-Bulgari watch, launched in 1977. But Gianni "e partito", I am told.

Old family feuds may still fester behind the calm, peachy decor of Bulgari's stores, but none may speak of family business but Trapani, and he keeps mum about Uncle Gianni's departure, other than to say: "They do talk to each other now."

The Bulgari brand has long been a byword for glamour. In the 1950s, stars such as Sophia Loren, Audrey Hepburn, Elizabeth Taylor, Tyrone Power and Kirk Douglas discovered the allure of Bulgari during the era of Fellini's La Dolce Vita. Now, Nicole Kidman, Andie MacDowell, Sharon Stone and Catherine Zeta-Jones adore to adorn themselves in Bulgari.

At the height of the 1990s boom, the opening of a second Bulgari store in London was celebrated at a sumptuous candlelit sit-down dinner for 250 at Claridge's. The guests included favoured clients, and a bevy of blonde Bulgari babes in borrowed eye-popping jewels, notably Lady Helen Windsor and the super-model Claudia Schiffer. The former was then "a [paid] consultant", but now, insists Trapani, "no one gets paid to wear Bulgari jewels at events".

Then, the author Fay Weldon was commissioned - for an undisclosed sum - to pen a limited-edition novel, The Bulgari Connection. Trapani sighs at the suggestion of hype and hubris: "Va bene, we made a few small mistakes - but none that impacted the future prosperity of the business."

The question many ask is: will his uncles, now aged 67 and 63, wait patiently for the next boom? Or is Trapani pushed to polish Bulgari and put it into play? Has he not tired of the day-to-day grind of keeping this complex business cutting edge and desirable?

He replies: "Look, my uncles are happy to obtain the profit they do. They don't need the money. They are proud to be the owners of this company. Your willingness to keep a business in your hands is much tied up with your perception of the future.

"If you see the company is well managed, and that realistically it will be more valuable, you keep it. In the meantime, you have fun, and you are proud."

What about succession? His three children are all under 10 years old, and his young adult cousins are not in the business. He is beginning to get upset now. "Who cares about succession? I am 47 years old, so who cares? One day, Bulgari is going to be sold, we'll see. But that is not in the plan now and I do not think it will happen in the short term."

"There are a couple of big companies that would be interested, but they have not approached us. At present, I am not bored. I am excited, running like crazy to do all we plan."

Trapani concedes everyone has a price, but says Bulgari would refuse a takeover bid at even a 30 per cent premium, though three times the current price would be a different matter. Meanwhile, he insists: "The momentum is better than in 2000, when we were all exhausted from eight years of strong growth when we were running to keep up.

"Now we are running like crazy to do all the things we have in mind - and the results are coming. We are well positioned now, ready to take full advantage of recovery. People, whether in the old economy or new, will pay high prices for high quality services and products. What has changed is crazy excess has gone."

After the crazy years, the greying Trapani seems at ease. The tough times may have taken their toll (his marriage fell apart) but he is now the proud father of baby Allegra, born of his partner, Princess Lorenza de Liechtenstein.

The six-man crew abroad his fully automated boat await his pleasure. After the daily workout he gets at the gym and at Bulgari's adrenaline-charged headquarters, it's no surprise Trapani loves to run away to sea.

BIOGRAPHY

Age: 47

Education: Degree in economics from the University of Naples. Studied business administration at New York University

Personal details: Great-grandson of Sotirio Bulgari, founder of the firm. Has two children with his wife, from whom he is separated, and a newborn daughter with his partner, Princess Lorenza de Liechtenstein.

Career

1984: Became chief executive of Bulgari.

1995: Oversaw listing of Bulgari on the Milan Stock Exchange and SEAQ International in London.

Directorships: Altagamma, an association of luxury Italian brands.

Opera, an international fund investing in emerging Italian luxury brands, which he also helped to create. Bulgari is Opera's largest investor with 12 per cent of the shares.

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