Italian luxury firm Loro Piana defends takeover

Amid controversy and angst over foreign takeovers of well-known Italian companies, the head of Italian luxury textile maker Loro Piana has argued the case for selling a family business, in an interview with AFP.

Italian luxury firm Loro Piana defends takeover
Photo: Lionel Bonaventure/AFP

Loro Piana, bought by French giant LVMH for 2.0 billion euros ($2.7 billion), is now eyeing further global expansion, Pier Luigi Loro Piana,
chairman and chief executive of the once family-run business, said.

The takeover was no act of betrayal and would help retain jobs as well as develop the company, he insisted.

"The life of a business is not like a football team! We are not taking part in an Italy-France game or against Germany," he said in an interview.

"We are trying to do our best for our company and for Italy," he said.

The business goes back six generations and embodies classical Italian luxury, with its roots in tradition and the community where it started out in the Piedmont region of northern Italy.

It started out in its current form in 1924 in Quarona, a small town at the foot of the Alps.

Specialising in the production of rare textiles such as cashmere, vicuna, merino or lotus flower, it has also expanded into high-end fashion.

LVMH has said it is buying 80 percent of Loro Piana — its most recent in a series of purchases including Bulgari, Fendi and Emilio Pucci.

Kering, another French giant in the sector, also owns the Italian brands Bottega Veneta, Sergio Rossi, Brioni and Pomellato.

These buyouts are part of growing foreign involvement in a variety of Italian business from food and drink to telecoms to the airline industry.

The national press has portrayed the takeovers as a symptom of economic decline. But the 62-year-old Loro Piana, said that the jingoism makes no sense.

The latest case is Spanish group Telefonica's plan to increase its stake in Telecom Italia which contributed to the departure of the chief executive of the Italian firm on Thursday.

Being owned by LVMH will lead to "a more rapid and also maybe more solid development that would not have been possible for a company like Loro Piana on its own," he said.

"Markets that were not an immediate priority for us can become ones that are since there will be more resources available," he said.

Not that the company, which employs 2,500 people, has much to complain about, he said.

The group is "in complete contrast with the national economy", which has been in recession for two years.

Turnover was €627 million ($847 million) in 2012 and is due to increase to €700 million this year.

"I don't think LVMH will want to significantly change the strategy of Loro Piana and I don't think that they would have bought it otherwise," he said.

Loro Piana and his brother Sergio, 65, will hold on to their executive positions, which they rotate every three years, as well as 20 percent of capital.

"If Loro Piana develops further in the years to come, we will have made the right choice for Italy, for ourselves and for the LVMH group," he said.

Marco Fortis, a professor of economics at Cattolica university in Milan said companies that have been taken over like Loro Piana are "major businesses but not big enough to grow more on the global market", particularly in emerging markets.

"In Italy, we are always complaining about foreigners buying companies" — even though it can also work the other way round, he said.

The strategy of Loro Piana and other luxury companies that have been bought by LVMH or Kering is actually "mutually advantageous", he explained.

France "has few businesses but a lot of capital and Italy has a lot of businesses but little capital", he said.

In any case, there will always be new generations of brands rising, he said, giving the example of fashion businesses Brunello Cucinelli, Cruciani or Lardini.

"There are always new, youth brands in the luxury sector that will be big brands in the future," he said.

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Inside the world of Italy’s designer to ‘the 0.001 percent’

Florence-based luxury designer tells of super-rich customers who shop by private jet, and his experience of dressing the Pope.

Inside the world of Italy's designer to 'the 0.001 percent'
Italian luxury designer Stefano Ricci (C) poses with his sons Niccolo (R) and Filippo, during a preview of his Spring/Summer 2020 collection. Photo: AFP

Italian luxury clothing designer Stefano Ricci and his sons are touring the sumptuous Reggia di Caserta near Naples by horse-drawn carriage as they unveil their latest clothing collection.

The tour the vast gardens at sunset, stopping to sip champagne as models in impeccably-tailored suits in grain yellow, flaming red and galactic blue pose near an ancient fountain.

The grounds of the Reggia di Caserta palace  near Naples. Photo: ANDREAS SOLARO / AFP

The decision to host an intimate preview of their Spring/Summer Collection 2020 at the UNESCO world heritage site, rather than during Milan's frenetic fashion week, is emblematic of a brand the New York Times dubs “Clothier to the 0.001 Percent”.

The Florence-based menswear and accessories brand, founded in 1972, has outfitted celebrities from Andrea Bocelli to Morgan Freeman and Tom Cruise, as well as world leaders like Nelson Mandela, and even Pope Francis.

The latest collection, which features pinstripe suits, colourful knitwear, field jackets and a tux, is named “King for a Day”.

Models wearing Ricci's creations. Photo: ANDREAS SOLARO / AFP

In an era where designer goods can be bought online or snapped up in outlets, Ricci says he offers the world's wealthiest men a personalised experience in buying Made in Italy items created using traditional Florentine sartorial techniques.

“Our customer still needs to experience the emotion, to touch the product. Have it explained to them in person, see the tailor, have his measurements taken, be told a story,” Niccolo Ricci, the company's CEO, told AFP at the preview this week.

“He wants to be pampered for an hour,” he said.

Collected by private plane

“Sometimes we have superstitious customers who want trousers, a suit, shirts for example for important appointments, and given the extremely tight deadlines they give us to deliver the clothes, they send their private plane to get them on time”.

Whether hankering after a 5,050 euro suede jacket or a 1,600 euro silk-and-crocodile baseball cap, the typical client is an “alpha-male”, preferably an outdoorsy type with “a love of antique art”, according to Stefano Ricci.

Stafano Ricci. Photo: AFP

“The Ricci man loves the mountains, the woods, dogs and – I'm not afraid to say it – hunting,” he said.

The bearded designer, 67, a keen hunter himself, says his passion for high-end tailoring is “a virus”.

“When it gets hold of you, you produce more, more, more, until you say 'what the heck can I invent now to better this?'”

His latest challenge? “Creating a material which has a compact structure but is at the same time extremely soft… and luminous, not like polished glass but like the skin of a beautiful young girl”.

“No price limit”

Focusing on the richest segment of society in emerging markets like Russia, China and the Middle East – the brand is about to open a shop in Turkmenistan – has shielded it from factors weighing on sales at other luxury houses.

“We've found there is no price limit if the customer finds himself with a quality product,” Niccolo Ricci said.

READ ALSO: The richest Florence families in 1427 are still rich today

“So even for a suit that costs 25,000 euros, if the customer understands the work that has been done on it, the quality of the fabric, our commitment to sourcing quality raw materials for our exclusive collections, then the customer is on board”.

The 2018 financial year closed with a turnover of 150 million, and the company registered a five percent growth in the first quarter of this year “despite difficulties such as the tariff war between the US and China, (and) Brexit or no Brexit”.

Photo: AFP

“I have been lucky enough to do something I love, to work with my wife, my family, and I've now passed the baton to my sons,” Stefano Ricci says as he stands at the top of a vast marble staircase leading to the royal apartments.

“I design the collections a bit, I give guidelines, I participate in the process, but I'm much more relaxed now”

Among the highlights of his career is a white silk vestment made for Pope Francis in 2015.

“I dressed the pope! I can't do better than that, it's the truth,” he laughs. “I couldn't hope for more”.

READ ALSO: The little-known tax rule that's got the super-rich flocking to Italy