Ferrari takes the road to haute couture
Ferrari is shifting into high gear to bring its prancing horse brand to the catwalks and gastronomy in order to appeal to wealthy customers beyond its loyal fans.
The Italian company renowned for its Formula 1 racing team and overpowered sports cars adorned with the Cavallino Rampante logo is launching a fashion collection today and reopening a restaurant in its hometown of Maranello two days later.
Read also : Why the Ferrari owner enters Louboutin
The clothing line comes from creative director and former Armani designer Rocco Iannone, while Michelin-starred Italian chef Massimo Bottura is relaunching the restaurant where founder Enzo Ferrari dined with friends and Formula 1 stars.
Nicola Boari, director of brand diversification at Ferrari, told Reuters the goal was to reach new customers “in terms of age and culture” beyond her racing fans and customers. sports cars that already covet its branded jackets, t-shirts and hats.
The customer base for Ferrari cars is limited by design to less than 10,000 vehicles per year, fewer customers than Bottura’s new restaurant could serve at the same time, and the luxury automaker has said it hopes its so- saying brand extension strategy would account for 10%. of profits in a decade.
Ferrari is far from the first luxury car brand to venture into lifestyle ventures. Others like Volkswagen’s Lamborghinis and Bentleys, as well as American motorcycle maker Harley-Davidson, have turned to clothing collections. Ferrari’s foray into haute cuisine also follows in the footsteps of luxury fashion groups, including French LVMH and the Kering Gucci group, who also turned to Bottura for its first restaurant in Florence and a second in Beverly Hills.
“Ferrari is one of the strongest brands in the world and certainly the strongest brand in the luxury industry,” said Massimo Pizzo of Brand Finance, a brand valuation consultancy.
“It has the potential to be successful even in the luxury clothing industry,” he said.
Former Ferrari CEO Louis Camilleri unveiled the brand’s expansion strategy, which includes fashion, dining and other luxury experiences, in 2019, just before the coronavirus pandemic hit and delays plans.
The launch now comes days after the appointment of new chief executive Benedetto Vigna, a 52-year-old physicist who spent 26 years at semiconductor maker STMicroelectronics and is expected to bring Ferrari into the era of electric cars.
Read also : Anyone can own a Ferrari or a Basquiat, but in fractions
Camilleri said the fallout from the Ferrari brand was stretched too far and planned to cut around half of the automaker’s licensing deals and cut around 30% of its product categories.
Perfumes have since disappeared from the shelves of existing Ferrari stores, for example, as have some low-end products of no real value beyond the logo.
Analysts said it would take time for Ferrari’s new branding to succeed, while some were cautious about its potential contribution to profitability.
“Considering the kind of scale you need to be profitable in luxury, I don’t think it will increase Ferrari’s margins, which are already high enough,” said Susy Tibaldi, luxury analyst at the Swiss bank. UBS.
Last year, 11.3% of Ferrari’s net revenue came from its sponsorship, commercial and brand category, which includes the Formula 1 team and revenue generated by the brand through merchandising, licenses and royalties, compared to 14.3% in 2019.
Ferrari’s direct rival, Lamborghini, offers several brand collections based on partnerships, including men’s wear, children’s wear and lifestyle wear, while Bentley’s brand extension strategy focuses on accessories. and luxury furniture.
Both companies said their brand extension strategies were making significant and growing contributions, but declined to detail the revenue they generated.
Harley-Davidson has long enjoyed a wide range of branded lifestyle gear, with its general merchandising accounting for 5.7% of the company’s motorcycle division revenue last year.
Ferrari, which initially plans to sell its fashion line through its stores and online, will compete with luxury heavyweights in a market estimated at some 280 billion euros ($ 341 billion) this year.
Ferrari’s parent company Exor, the investment firm of the Italian Agnelli family, has also moved into luxury.
He recently bought 24% of the shoe maker Christian Louboutin and became the biggest investor in the Chinese luxury group Shang Xia, co-founded by the French Hermès.
Ferrari declined to give details on its collection ahead of today’s big reveal.
As it moves away from the licensed clothing it already sells, industry sources expect the clothing line to fall into a “mid-luxury” category, a cut below major brands. such as Gucci or the Italian Prada and Dolce & Gabbana.
The collection is expected to include ready-to-wear items made with high-end fabrics, rather than more casual streetwear looks, the sources said.
The designs could draw inspiration from Iannone’s past at Italian fashion house Armani and tailor Pal Zileri, with clean, elegant lines and subtle, minimalist details.
“It’s clear that there has to be a narrative, with an emphasis on ‘Made in Italy’, they can’t just go out with a T-shirt with a logo,” Tibaldi said at UBS.
As for the Il Cavallino restaurant in front of the Ferrari headquarters, staff are actively preparing for the opening next week in rooms decorated with a Formula 1 nose, framed photos of Enzo with friends and Ferrari racing posters.
Standing next to an old V12 engine and a more modern version used in one of Michael Schumacher’s cars, Bottura told Reuters he plans to give local specialties such as tortellini and tagliatelle a fresh look and contemporary.
“I look at the past in a critical way, not with nostalgia, to bring the best of the past into the future, to renew the tradition, just like Ferrari does,” he said.