Brioni Goes Public?

Style Brioni Goes Public?

An Interview with Umberto Angeloni, Chief Executive Officer, Brioni of Rome

EDITORS’ NOTE classic style, the brand immediately result, these brands are no longer per- Given the many became a favorite among European aris- ceived as exclusive. challenges the grim tocracy and movie stars such as Clark But Brioni has been opening economy is cur- Gable, Gary Cooper, and John Wayne. stores and recently launched a whole rently presenting Today, Brioni is still regarded as a world new line of ladies’ products. Will the for the luxury- leader in hand-tailored clothing; employ- brand remain exclusive as it expands? goods sector, CEO ing some 1,000 tailors at its main factory; It’s true that we’ve also opened sev- Umberto Angeloni creating about 200 models in various eral stores in the last five years, but don’t believes there is no styles and sizes each season; and offering forget that we were relying almost 100 time like the pre- roughly 5,000 fabrics from which to percent on independent trade, which was sent for companies choose. The entire Brioni Group comprises not a totally healthy situation in today’ to “do some deep nine factories, with 2,000 employees. circumstances. The fact is, we need to Umberto Angeloni reflection on their have our own retail spaces to represent strategies.” Fur- Since the events of September 11, the entire world of Brioni products and ther, “there’s another major factor at the 2001, and the subsequent economic accessories. So, today we have 23 stores, root of the problem,” he contends: downturn, the fashion industry has which still isn’t a lot compared to the namely, that many luxury companies faced some serious challenges. Do hundreds and thousands that some “have been steadily diluting themselves” you expect success in 2003? brands have. Plus, we only concentrate over the years “by introducing non-core The suffering extends far beyond the on major international cities and resorts, products and services.” Although Brioni fashion industry; instead, it affects the such as Paris, London, New York, Tokyo, of Rome has extended itself to comprise a entire luxury marketplace. The major Capri, Marbella, St. Moritz, and so on. network of 23 stores, a ladies’ clothing brands – including the very old, estab- There we cater to exactly the same type line, and a luxurious Mediterranean lished, and superior ones, which I call of clientele. resort, that “doesn’t mean that we’re “thoroughbred” – saw rapidly declining The fact that we’ve launched a ladies’ diverting from our core product, which is sales and profits in 2001 and 2002. Plus, clothing line doesn’t mean that we’re clothing, or from our core vision, which the analysts aren’t expecting things to diverting from our core product, which is is luxury,” Angeloni emphasizes. On the return to the 2000 levels before 2004. clothing, or from our core vision, which is contrary, by pursuing brand extensions So it’s a moment when companies luxury. We’re extending our core busi- very selectively, “the dream is to keep the need to do some deep reflection on their ness, not diverting from it. company growing at a rapid pace with- strategies. Your ladies’ division has been out damaging its image.” And as con- Aside from the economic crisis, the quite successful. sumers are indeed expressing a new fact that people aren’t traveling as often, Yes, we opened our Brioni Women “wave of interest” in “sartorial, bespoke, and other current restraints on consump- stores directly next door to our men’s made-to-measure, and handmade cloth- tion, there’s another major factor at the stores – in Milan, in February 2002; and in ing,” Brioni of Rome “should fly faster root of the problem: Most of the so-called Rome and New York last September. than the others,” the CEO concludes, luxury brands, especially the fashion Today, I can say that we’ve been very suc- emerging “like a surfer just ahead of the brands, have been steadily diluting them- cessful; the jury is no longer out. Interest- next big wave.” selves by introducing non-core products ingly, Harvard Business School just com- Prior to assuming his present post in and services. For example, they’ve created pleted a case study on Brioni Women, and 1990, Angeloni served as VP of Marketing third, fourth, and even fifth clothing lines, it found that historically no men’s brand for Brioni of Rome since 1982. He holds which have diffused their brands by cater- has ever been successful in launching a an M.A. in economics from Rome Univer- ing to lower economic levels whose ladies’ line. sity and an M.B.A. from the University of spending tends to evaporate quickly if What particular products do you Western Ontario; he is a CPA and CFA in things don’t go well economically. In addi- offer the ladies? Italy. tion, many luxury brands have been using Primarily jackets, suits, and over- channels of distribution such as discount coats, and then secondarily pants, skirts, COMPANY BRIEF Named after one of the outlet malls, which also tend to attract a blouses, knitwear, and bags. These are all most elegant resorts on the Adriatic coast, different consumer – one you can’t rely accessories to the core brand and the core Brioni of Rome was founded in 1945 when upon in terms of loyalty and staying product. master tailor Nazareno Fonticoli and power. Plus, these brands have created too But some women have been buy- fashion designer Gaetano Savini opened much accessibility for themselves by opening your core products for many one of the first men’s fashion houses on ing endless chains of stores, not only in years. Via Barberini. Uniting innovation with major cities, but also in smaller ones. As a Yes, the ladies have always envied

122 LEADERS POSTED WITH PERMISSION. COPYRIGHT © LEADERS MAGAZINE, INC. VOLUME 26, NUMBER 2 the men for their opportunity to buy a-half-hour drive from Munich and four entering fields such as fragrances, eye- superior fabrics, which are not available in hours from Vienna, so it’s truly at the core wear, more leather goods, and home fur- women’s fashion. They also envy our male of Europe. nishings, and then, of course, by slowly customers because of the amount of hand And when do you think it will increasing our retail network. So the detail in their garments, which you also open for business? dream is to keep the company growing at don’t usually find in ladies’ fashion. Plus, If we break ground this spring, some a rapid pace without damaging its image they envy the men’s access to bespoke of the initial pilot projects, which include or vision in any possible way and then to services, which they don’t typically have. villas and residences, should be com- go public one day. So we’re now bringing the assets and core pleted by the summer of 2005. So we’re That should be a very good initial identities of men’s fashion to public offering. But what the world of ladies’ fashion. would the timing be for You’re known as an that? Is the current econ- imaginative chief execu- omy good enough, or will tive, and your brand may you wait a while? be the first in its field to We’re thinking that the have its own island. window between 2005 and This is very important, 2007 might be a good time to and it’s a major project. Again, go public. The company is very we’re not mimicking what profitable and almost debt- some of the luxury brands free, which is a rarity today. I have been doing in opening think the market is looking for branded hotels; such ventures companies that not only have a are simply instances of labeling brand, but also have a true products and services com- competency, and we make pletely outside of their core everything we sell. Our prod- competencies. In our case, it’s ucts aren’t just made in Italy; much different because the 13 they’re “Made in Brioni.” We islands of Brioni are where our have an unbelievable skill fac- name originated. tor cultivated during the last 60 In the period between years, which I think the market the early 1900s and World War can appreciate. This is some- II, the archipelago of Brioni thing tangible – we’re not just was an international luxury- an brand or design that is here resort destination. It had the today and will be gone tomor- first indoor pool in Europe, row. So, hopefully when the and in 1912 it already had two market turns around, we five-star hotels, an 18-hole should be in a position to go golf course, and possibly the public. most famous polo course in Are there any current Europe, so it was the jet-set trends in the industry that destination of that era. Then, might also be promising Italy lost the territory of Istria for Brioni’s business? to Yugoslavia. Recently, the Many brands claim that Croatian government asked they do sartorial, bespoke, our company to help relaunch made-to-measure, and hand- the resort. made clothing. And there’s a So today we’re putting rush now toward these gar- together a group of investors ments because the consumer who are at the top of the pyra- is more concerned about qual- mid in spas, hotels, resorts, ity and individuality, rather and golfing, in order to estab- than just status symbols or lish this as the ultimate Med- expensive items per se. This is iterranean retreat. To give one good news for Brioni, of name, the Aman Group will course, because all along be present on the island, but we’ve been custom-oriented; we still need many more in fact, 25 percent of our pro- investors, not only for the duction is custom-made. So, archipelago, but also for the with this wave of interest in mainland, which is also pris- quality handmade and be- tine and available for development. now inviting investors to join us in this spoke clothing, Brioni should fly faster Is there a convenient landing dream project. than the others. strip near the island? You’ve put many dreams into You could say that Brioni has Yes, 10 kilometers inland of the fish- action since you first joined Brioni in already been flying faster than the ing village facing the islands, there’s a for- 1990. What dreams lie in wait for the others. mer military airport capable of handling future? We have. When the market contracts 747s; and the city of Pula has a harbor. I think the company still has enor- and people become pickier and more The island is only two nautical miles from mous potential for growth, even without aware, Brioni emerges like a surfer just shore and 60 miles from Venice, and going outside of its core business and ahead of the next big wave.• they’re in the process of building a high- without diluting the brand by extending way that would cut the driving time from itself through lower quality levels. Of Actor Pierce Brosnan in a Brioni suit for the movie “Die Venice to about two hours. It’s a five-and- course, growth can also be achieved by Another Day”