Leonardo Ferragamo: Angels want to wear his red shoes
When he's not kitting out the stars, a scion of the Italian luxury goods dynasty is captaining Swan yachts. Now a flotation has appeared on the horizon
Sunday 04 February 2007
In Italy, the family is every- thing. Many of the country's biggest companies are still owned and run by dynasties, and the distinction between the boardroom table and the kitchen table is often blurred. So when Leonardo Ferragamo, son of the late Salvatore Ferragamo who founded the eponymous luxury goods empire, says "the family is the brand", you know he means it.
Unlike "Brand Beckham", assiduously cultivated by the footballer David and his celebrity wife, Victoria, this is no Johnny-come-lately marketing wheeze. Salvatore Ferragamo started one of the world's grandest luxury goods businesses when he opened his first shoe shop in Florence in 1927. One of his most celebrated pairs of shoes were the ruby slippers worn by Judy Garland in the 1939 film The Wizard of Oz. He was also responsible for the metal-reinforced stiletto heels made famous by Marilyn Monroe.
By the 1950s, Salvatore Ferragamo was the shoe of choice for stars such as Audrey Hepburn, Sophia Loren and Greta Garbo. Throughout, he insisted that all the company's products should only be made in Italy to make sure quality was not compromised.
Leonardo, who has worked in the company all his life, says of his father: "He was a genius, a special person. But I never got to know him well as I was seven when he died."
When Salvatore passed away aged 62 in 1960, his wife, Wanda, took over the running of the business. With the help of her six children, it has since expanded into a global concern, also selling luxury accessories such as designer glasses, perfume, belts and scarves. Production has grown from 6,500 pairs of shoes a year when Salvatore died to around 10,000 a day now. In 2005 the company made a profit of almost $50m (£25m) on sales of $718m. Asia now represents half its revenues.
Leonardo learnt the art of shoemaking in the family business and went on to head the menswear division as well as spearheading the drive into Asia. He is also responsible for the family's property investments and is the chairman of the yachting group Nautor, more of which later.
But Salvatore Ferragamo is set to change. Last year, for the first time in its 80-year history, someone from outside the family was brought in to run the business. Michele Norsa, formerly the chief executive of the rival Italian group Valentino, replaced Wanda, now aged 85, who has become chairman as she cuts down her workload and prepares to pass on the reins.
And in September, the company announced its intention to float on the stock market, although the family will retain a majority 52 per cent shareholding.
The appointment of Mr Norsa, it is hoped, will head off the infighting that has befallen other great family-run Italian businesses, such as Gucci and Pucci, when their patriarchs died and control passed to their children.
"We are a large family - there are 65 children and grandchildren. It would be hard to pick a new boss," says Leonardo, who is reported to have been responsible for putting forward the flotation plans to the family. "We need to modernise the company and get it ready for the next generation."
In interviews, Wanda has always strongly rejected the possibility of selling the business, saying recently she was "almost offended" by the thought. But she has conceded that her children, between whom ownership of the company is divided, may feel differently. By going public, the second generation of Ferragamos will be able to sell their shares if they wish.
It is hard to tell whether Leonardo has found it difficult having an outsider running the family business. "It's part of the transition," he comments. "We share the same values."
He also insists that having to answer to outside shareholders will not be a problem. "They can be demanding. But that can be a good thing."
Leonardo says that despite the flotation plans, Salvatore Ferragamo will remain true to its principles and the family will still be heavily involved even after it lists in around two years' time.
The dynasty is one of the company's greatest assets, he says. "A company owned by the family can transfer a level of security and integrity. It gives a guarantee of continuity. We don't just rely on one man who comes and goes. The family is the brand."
Central to the Salvatore Ferragamo brand is the "Made in Italy" stamp found on its products, denoting high quality and good workmanship. For example, the company's formal Tramezza shoes are hand-made in a factory near Florence by half a dozen workers. However, production costs are much higher than those of its competitors, many of which have shifted operations to Asia. Leonardo's brother, Ferrucio, once complained in an interview that some of the company's employees worked fewer than eight hours each day and were "spoiled". They needed, he hinted, to adapt to the global economy.
Leonardo does not promise that all the company's goods will be made in Italy indefinitely: "We have to keep our eyes open. Things change in the world. There are other opportunities around the world. We have an open attitude to it."
Apart from shoes, Leonardo's great love is sailing, a passion he has been able to indulge in some style. In 1998, he bought Nautor, which makes the famous Swan yachts, having sailed its boats for years as an enthusiast. In his Italian lilt, he recounts the "beautiful story" of how he first came to be involved with the company, which has established such racing events as the Swan Regatta and the Swan Cup, and also scooped the trophy in 1973 for the first Whitbread Round the World Race.
"I went to visit the factory. A new world opened up to me," he recalls. "I was amazed at the quality and reliability of every worker, especially the pride they were taking to make it special."
Leonardo appreciates good craftsmanship, whether in a shoe or a boat. Like Salvatore Ferragamo, Nautor focuses on quality not quantity, making just 40 yachts a year, which range in price from €400,000 (£250,000) to several million. "[Shoes and boats] are both forms of transportation," he adds without a trace of irony, warming to his theme. "The Swan yacht is about branding and quality. Shoes are not just about aesthetics but what's inside them. It's all about the identity of the product."
Born 23 July 1953.
Education University of Imede, Lausanne, Switzerland - business administration degree; Columbia University, New York - administration and finance degree.
Career at Salvatore Ferragamo
1973-75: assistant to director, leather division.
1975-80: director, men's shoes division.
1980-87: director, men's division.
1987-94: commercial director, Europe/Asia.
1994-2000: chief executive, Europe/South America/Asia.
2000 to now: chief executive of the holding company.
Bought Nautor in 1998, becoming chairman. Also chairman of the board at Camper & Nicholsons, the English yachting business bought by Nautor in 2001.
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