Maximilian Davis - Designer, Creative Director of Ferragamo

[yslforever]

I'm starting to think that this is more of a Gobbetti issue than a Davis issue.

It is... Davis collections were relatively well received, it's the management issue if they aren't able to translate this new reputation into sales... they did not even change the chairs or the windows in the shops, the website is awfull to navigate, and all the Davis creations are 50% higher priced than the non-Davis merch in the same store, instead of progressively replacing the non-Davis merch by Davis inspired stuff, at the same price-point.

They hired a new CD without investing further and they thought it was enough....

 

[style_expert]

Gobbetti initially aiming at 2.3 billion by 2026
At this point they should be happy to get back to the 1.4 billion mark they were at before the pandemic started and before Davis was appointed.

I'm not surprised at all, I received several private sale invitations for Ferragamo FW2324 menswear at a few of my online retailers.
This was already around the end of October, which is clearly a sign the products are simply not moving in any way. Same with Balenciaga and Burberry...

 

[Frederic01]

I don't understand how they came up with those kind of figures based on a designer that basically came from the equivalent of a start-up brand?

Those figures are something that Hedi Slimane did at Celine only after he was a successful, celebrated, and revered designer at both Dior Homme and Saint Laurent respectively for basically a decade plus?

 

[lowfive1715]

In 2010 everyone wanted to be a BOSS, #Entrepreneur #GenerationalWealth. Brands responded to that by trying to be the Hermes (which just shows u how high Hermes status truly is). That whole Kardashian self made sex worker look is passé.


Now its clean girl clean boy. Southern California energy. Celines look really.

What do you mean by the “boss” image or concept that was in that era?

 

[yslforever]

I don't understand how they came up with those kind of figures based on a designer that basically came from the equivalent of a start-up brand?

It happens when consumers and market knowledge and research are dismissed because of delusion and hubris.
It's quite stereotypical of mismanaged family businesses.

 

[Frederic01]

No signs of turnaround as Ferragamo sales and profits drop​

The Italian luxury brand’s revenue was down 7.6 per cent this year, while operating profits almost halved.
BY MALIHA SHOAIB March 6, 2024

Ferragamo reported a 7.6 per cent drop in sales on Wednesday to €1.16 billion in 2023, as the brand turnaround under CEO Marco Gobbetti shows signs of stalling.

Operating profit plummeted 43.7 per cent to €72 million, which the company said was due to planned investments in marketing and communications to support the new brand image under creative director Maximilian Davis, who was appointed in 2022. Gross profits were up to 72.5 per cent of revenues (compared to 72 per cent in 2022) driven by better quality of sales and fewer discounts. Net profits were down 59.9 per cent to €26 million.

“We are not implementing a cost-cutting exercise at this stage but we will be very disciplined [on costs],” Gobbetti said in a call with investors. “Though we will pursue to continue our goals in 2024, we may expect fairly limited growth,” which he attributed to inflation among other factors.

Gobbetti warned in January that the turnaround, which he has been leading since 2022, may take longer than expected. While the press release today did not point to the company’s financial outlook for 2024, the company did tell investors that its priorities for the year are to enhance storytelling through digital content and retail activations, such as 20 new stores. Many of the upcoming locations have been designed with a fresh store concept, including one that opened in Milan during fashion week. Alongside that, there’s a continued focus on quality of sales and a disciplined management of operating costs.

As the brand reported in its preliminary earnings in January, sales fell across all markets except EMEA (where they were up 3.4 per cent). North America was down 19.3 per cent due to softening in the market; APAC (the group’s largest market) fell 13.1 per cent, though the company noted wholesale and retail sales in Greater China were up double digits. Central and South America were down 7.2 per cent for the full year, and Japan was down 12.6 per cent.

“Trading has been volatile in the beginning of [this] year, with January being softer particularly in Asia and in the US,” Gobbetti told investors. “February was better, it was in line with last year. There were some positive calendar effects because of the timing of Chinese New Year, but also due to a recovery we saw in Europe, Japan and the US. In terms of the Chinese customer, 2023 was positive overall; including travel, which increased significantly but remained below pre-Covid levels.”

Retail channels were down 10.8 per cent year-on-year (which Ferragamo blamed on weak luxury demand), while wholesale channels dropped 12.2 per cent due to softening in the US and reduced international travel affecting duty-free shopping.

Davis showed his fourth show in Milan in February, which was well received despite commercial success continuing to lag. Apparel made up just 6.6 per cent of net sales in 2023, the same as last year, compared to 40.3 per cent from leather goods and 45.7 per cent from footwear.

“Our strategy remains what we set out 18 months ago — it’s a renewal and recruitment of new customers,” Gobbetti said when asked if Davis has successfully attracted a younger clientele as a result of the rebrand. “That is the foundation of the strategy and it does include younger clients, but it’s not necessarily focused on the younger clients. We’ve seen that our customer base is getting younger, but I wouldn’t focus on that — it’s a regeneration of a client base. We can say there is an evolution of Ferragamo [...] certainly Maximilian has been able to reflect the elegance [that the brand has always had] and place it in today’s society and make it very contemporary.”

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[perhydrol]

All these news on Ferragamo are making me more and more stressed because I'm rooting for Maximilian! Even if his debut was not good, he managed to find his own niche at the brand imo. However, I don't know if the management department knows what to do with it.

 

[disco54]

I feel bad for him , most likely he will be let go , but problem is not him its their insane price points but sadly the Ferragamo stores are literally always empty here and I feel using that 70s horror movie Omen logo style is definitely not helping

 

[SophiaVB]

Between Burberry and Ferragamo... too many execs that don't know what they are doing...

 

[lhhbl]

Between Burberry and Ferragamo... too many execs that don't know what they are doing...

+ Gucci + Lanvin... a mess

 

[Lola701]

I feel bad for him , most likely he will be let go , but problem is not him its their insane price points but sadly the Ferragamo stores are literally always empty here and I feel using that 70s horror movie Omen logo style is definitely not helping

The slowdown that is happening right now in luxury has more to do with prices than a lot of things.
Unfortunately, a lot of those executives believes that everybody is on the same level.

There’s a gap now between Top tier luxury brands (the Top 10), the rest and contemporary brands.

Today, the mass of clients can either go to the top 10 with bags that have proven their longevity or go for brands like Polène, Toteme and others that offers a honest, stylish and longlasting product at a decent/ contemporary price.

Ferragamo shouldn’t try to compete with the top 10!

We don’t talk a lot about that brand but Tod’s is still a success. They are growing at a slower pace but when you look at their offering and their prices for the most part are below 2000.

Tod’s is growing, MaxMara is growing…
Clearly people there understand the market and their place in the market.

No amount of talent will make those brands turn over if the strategy don’t follow. All those execs are obsessed by LVMH.

 

[RaisinBoy]

This label is so mediocre… the visuals, the stores, everything. Clothes are worse than mediocre:-(

 

[Nimsay]

These execs know what theyre doing. This is corporate business. They have to try to make these brands the next Hermes - no matter how unrealistic it may seem. They cant come in like us and say “well ferragamo is a tier 2 designer that cant charge tier 1 prices” - they would be fired immediately and replaced with someone who says what the board wants to hear regardless of how delusional it is. The execs know this isnt working but are forced to due to the pressures of business.

Ferragamo shoes are way too much damn money. They used to be - like Bally - a well made brand that is like 30% less than a tier 1 label. Now I see Ferragamo is trying to compete directly with Louboutin which is craziness. Like why on earth would I spent over 1k on Ferragamo and not hermes dior louboutin …

 

[disco54]

The slowdown that is happening right now in luxury has more to do with prices than a lot of things.
Unfortunately, a lot of those executives believes that everybody is on the same level.

There’s a gap now between Top tier luxury brands (the Top 10), the rest and contemporary brands.

Today, the mass of clients can either go to the top 10 with bags that have proven their longevity or go for brands like Polène, Toteme and others that offers a honest, stylish and longlasting product at a decent/ contemporary price.

Ferragamo shouldn’t try to compete with the top 10!

We don’t talk a lot about that brand but Tod’s is still a success. They are growing at a slower pace but when you look at their offering and their prices for the most part are below 2000.

Tod’s is growing, MaxMara is growing…
Clearly people there understand the market and their place in the market.

No amount of talent will make those brands turn over if the strategy don’t follow. All those execs are obsessed by LVMH.

I noticed the same with Guerlain fragrances, they don't have any major sellers now and its seen as a Grandma perfume house yet their price points are ridiculous and surprise they are owned by LVMH, they really are in on their heads, I asked a Guerlain SA at my NM how many bottles of fragrances they sell in a week she said , 4-5!!!! Thats insane but 570 USD for 200 ml fragrance is not gonna sell . In my circle my very wealthy friends just shop at Loro Piana,Hermes, Chanel. Brands like Ferragamo , Burberry cannot compete with them

 

[Lola701]

I noticed the same with Guerlain fragrances, they don't have any major sellers now and its seen as a Grandma perfume house yet their price points are ridiculous and surprise they are owned by LVMH, they really are in on their heads, I asked a Guerlain SA at my NM how many bottles of fragrances they sell in a week she said , 4-5!!!! Thats insane but 570 USD for 200 ml fragrance is not gonna sell . In my circle my very wealthy friends just shop at Loro Piana,Hermes, Chanel. Brands like Ferragamo , Burberry cannot compete with them

The fragrance industry is a little bit more different though. Big brands are not pushing their regular lines anymore. They are either relying on classic with various flankers or reformulating old success. All the new launches are for their niche operations. Guerlain’s last mainstream commercial success was La Petite Robe Noire but now they are releasing and mostly pushing Skincare/Make-Up or Niche, more exclusive lines.
I can tell you that Guerlain is a huge hit still in Europe, Asia and elsewhere and they have developed a network of distribution quite interesting.

But if you look at the market today, big brands are pushing Niche lines and Big Groups buys Niche brands. LVMH invested in Maison Francis Kurkdjian, Puig bought Byredo, Estée Lauder bought Frederic Malle.

But what you said about Ferragamo or Burberry is true. Burberry is slightly different because they have an authority in outerwear but a brand like Ferragamo? Except fashion people or Italians, it’s not a brand that speaks to a lot of people…Less than Tod’s funny enough because part of the summer uniform of some men is the gomino loafers from them.

 

[Nimsay]

Lola understands the market so well. Tods Gommino have been part of my summer wardrobe since 2008…

 

[yslforever]

The fragrance industry is a little bit more different though. Big brands are not pushing their regular lines anymore. They are either relying on classic with various flankers or reformulating old success. All the new launches are for their niche operations. Guerlain’s last mainstream commercial success was La Petite Robe Noire but now they are releasing and mostly pushing Skincare/Make-Up or Niche, more exclusive lines.
I can tell you that Guerlain is a huge hit still in Europe, Asia and elsewhere and they have developed a network of distribution quite interesting.

But if you look at the market today, big brands are pushing Niche lines and Big Groups buys Niche brands. LVMH invested in Maison Francis Kurkdjian, Puig bought Byredo, Estée Lauder bought Frederic Malle.

But what you said about Ferragamo or Burberry is true. Burberry is slightly different because they have an authority in outerwear but a brand like Ferragamo? Except fashion people or Italians, it’s not a brand that speaks to a lot of people…Less than Tod’s funny enough because part of the summer uniform of some men is the gomino loafers from them.

Lola understands the market so well. Tods Gommino have been part of my summer wardrobe since 2008…

Tbh, I really don't find Tod's successfull at all: Tod's Group (Tod's, Hogan, Roger Vivier) is still slightly smaller Ferragamo, in term of annual revenues, the Tod's brand alone is half Ferragamo; Gomminos are an ancient model ("since 2008"), which has been extensively milked. A quick search on the YOOX outlet just gives me 600+ results in my size.
Where the exclusivity and desirability in that ?


The Ferragamo issue is the shareholders' structure: the Ferragamos (the family who owns 54% but fully controls) are way too divided and too "cash-poor" to make the necessary investments for a complete turnover (a bit like the Gucci family pre-1993), and the shareholder with the deepest pocket (Peter Woo) has a too little interests in the company to really invest cash, for now, but he's 75 and has no fashion or retail background.

 

[Lola701]

Tbh, I really don't find Tod's successfull at all: Tod's Group (Tod's, Hogan, Roger Vivier) is still slightly smaller Ferragamo, in term of annual revenues, the Tod's brand alone is half Ferragamo; Gomminos are an ancient model ("since 2008"), which has been extensively milked. A quick search on the YOOX outlet just gives me 600+ results in my size.
Where the exclusivity and desirability in that ?


The Ferragamo issue is the shareholders' structure: the Ferragamos (the family who owns 54% but fully controls) are way too divided and too "cash-poor" to make the necessary investments for a complete turnover (a bit like the Gucci family pre-1993), and the shareholder with the deepest pocket (Peter Woo) has a too little interests in the company to really invest cash, for now, but he's 75 and has no fashion or retail background.

You are right but Tod’s as the small group it is, is growing. Since they got close to LVMH, they have been making moves…After the fail of their OPA, they started to make moves (they were probably already in talks with LVMH). They have a new designer at Tod’s with projects of expansion. They are investing heavily on Schiaparelli…
It’s a small group but there’s a good potential, a good image and it was well managed.

Ferragamo’s situation is tricky indeed.
I don’t know how they can turn things around. We cannot say that Maximillian collections are terrible.
If one thing, the brand is back on the lips of fashion people in a way it wasn’t before.

 

[Nimsay]

Tbh, I really don't find Tod's successfull at all: Tod's Group (Tod's, Hogan, Roger Vivier) is still slightly smaller Ferragamo, in term of annual revenues, the Tod's brand alone is half Ferragamo; Gomminos are an ancient model ("since 2008"), which has been extensively milked. A quick search on the YOOX outlet just gives me 600+ results in my size.
Where the exclusivity and desirability in that ?


The Ferragamo issue is the shareholders' structure: the Ferragamos (the family who owns 54% but fully controls) are way too divided and too "cash-poor" to make the necessary investments for a complete turnover (a bit like the Gucci family pre-1993), and the shareholder with the deepest pocket (Peter Woo) has a too little interests in the company to really invest cash, for now, but he's 75 and has no fashion or retail background.

I like them because generally they have no logo except that embossed T. I just wore a brown suede pair today with a cotton silk button down and cotton twill pants. My equivalent of sweats and a hoodie. Where else can I go for no logo drivers? Despite loving driving shoes… Ferragamo LV Dior Fendi Gucci Prada are too logoey. Only bally and tods fit my needs.

I just casually scrolled yoox and most of those drivers are in hard to wear colors. They dont have basic colors at all. They have some logo free styles in colors i wont wear like bordeaux.

You just said theyre half the size of ferragamo so the distribution is much less already. Tods outside of major metro areas is unknown.

 

[Frederic01]

Ferragamo sales drop 16.6% in Q1 as wholesale, Europe revenue drops​

Wholesale sales decreased 38.6 per cent, while direct-to-consumer also suffered a 7.5 per cent decline.
BY MALIHA SHOAIB
May 9, 2024

Salvatore Ferragamo Group said revenues dropped 16.6 per cent at constant exchange rates in the first quarter of 2024, ended 31 March, driven by declines across both direct-to-consumer (DTC) and wholesale channels.

DTC sales fell 7.5 per cent in Q1 at constant rates, with particularly weak performances in China and Korea throughout January. Wholesale dropped 38.6 per cent in the first quarter, which the company blamed on the weak economic environment in Europe and the US, and its exposure to travel retail — which is yet to significantly recover, according to the company.

“As the wider sector continues to normalise, we are encouraged by the exit rates we are seeing in our DTC performance — most notably in Europe, the US and Japan — as we turn to further drive our top-line performance through an increased focus on both customer engagement and communication activities around our refreshed DTC channels,” CEO Marco Gobbetti said in a statement.

Sales in Europe, the Middle East and Africa declined 31 per cent overall, with wholesale down 51.3 per cent, offsetting the slightly positive 3.5 per cent growth in DTC. North America sales declined 10.9 per cent and Central and South America declined 11 per cent, both also due to weak wholesale performance. “In terms of the US, our performance has been more or less in line with last year. I think it looks a bit more volatile than other markets and the volatility is difficult to predict week by week, but overall it’s definitely on a better trend,” Gobbetti told investors.

Asia Pacific decreased 15.5 per cent due to weak demand in China, though the rest of Asia was positive due to the increase in travel. Japan declined 4.4 per cent. “I think the customers [in China] seem to be worried about the macroeconomic situation, so we have seen difficult trading for the sector in the months of March and April,” said Gobbetti on the call.

Despite the volatility in traffic across markets, he told investors that the enrichment of the new product range, focus on retail, and performance in key flagships has been advantageous. The first part of the creative transition under Maximilian Davis’s helm is complete, Gobbetti said. Around 55 to 60 per cent of product sales are carry-overs from prior to Davis’s appointment and around 40 to 45 per cent are new product offerings.

“We are quite pleased with that; it’s a major accomplishment that over the last 12 months since we launched [Davis’s products] at the end of February last year, we have gone full circle in the creative transition and established iconic products that are now becoming evergreen,” he said.

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