Repositioning Ferrari: From license business to lifestyle brand
“L'awareness di Ferrari é enorme,” says Nicola Boari, the executive overseeing the substantial brand repositioning of Ferrari, probably the most famous single marque in Italy.
Even more recognizable than stellar fashion names like Gucci or Giorgio Armani, Ferrari is an instantly familiar name to billions of people worldwide. And a marque that stands for elite luxury, heritage and supreme high performance, which has not been always apparent in some of the licensed products bearing its name.
This weekend it launched its first full fashion collection, designed by Rocco Iannone, a highly experienced veteran of mega houses like Armani and Dolce & Gabbana.
Ferrari unveiled the collection inside its car plant in Maranello, as models marched down its production line. Its Formula One pilots Carlos Sainz and Charles Leclerc sat front row, alongside John Elkann, the tall slim CEO and patron of the extended Fiat Group, Italy’s wealthiest conglomerate and owner of Ferrari.
“Ferrari wants to champion Italian excellence and the best of our country’s creativity. Today's fashion show in our factory and the openings of the Ferrari store and the Cavallino restaurant in Maranello are signs of a strong and optimistic Italy, ready for growth and renewal,” said Elkann.
The show marked the latest move into high fashion by his group, whose Exor division last year acquired a one-quarter stake in tony shoemaker Christian Louboutin, after buying control of Chinese luxury brand Shang Xia from Hermes.
There has been intense speculation in Italy that Exor may be about acquire a major stake in the house of Giorgio Armani, after the 86-year-old designer told a Vogue editor that he was tempted by “an Italian solution” to the future of his brand.
Asked directly by FashionNetwork.com whether Exor was about to link up with Armani, Elkann raised his patrician eyebrow, smiled and responded: “Let’s take care of this project first, shall we?”
Elkann, who wore one of Iannone’s Testarossa-print techy shirts, added that his brief for Iannone was to “discover the essence of Ferrari and express that in fashion. Often someone coming from outside sees it more clearly than someone who has been here for years. And I think Rocco has succeeded.”
The whole project marks a significant pivot by Ferrari, which has multiple licenses – from mini $50 toy car models to Lego race-car kits. Ferrari drivers have been crowned world champion 15 times, more than any other rival, so its red toy racers have an almost sacred votive quality to fans. While a 1963 250 GTO model is the most expensive car in history at $70 million.
“We have to move from being a licensed brand to lifestyle brand,” explained Boari, the day before the show inside Cavallino, the brand’s long-time restaurant, which has also enjoyed a mega upgrade.
Ferrari recently appointed Massimo Bottura, Italy’s most famous chef, whose restaurant in nearby Modena, Osteria Francescana, is a four-star Michelin eatery, to oversee its Cavallino restaurant. Three red stars for the cuisine, one green star for his recycling of surplus food.
Guests this weekend dined on Bottura’s brilliantly avant-garde dishes; like crème caramel made with parmesan; or succulent beef surrounded by a selection of sauces, displayed on a square plate and made to look like a Damien Hirst splash painting.
The beautiful Cavallino makeover came courtesy of modernist architect India Mahdavi. All the way through to a charming back room, where founder Enzo Ferrari would dine with his closest friends and staff. It’s also still where clients still go for lunch before picking up their new Ferrari. After coffee, a huge shutter rising to reveal their new power car.
Like a Hermes Kelly bag, part of the mystique of a Ferrari resides in its scarcity value. If one orders an entry-level Ferrari Roma model, expect to pay about 250,000 euros and to wait 12 months to pick it up.
The brand was floated on the New York Stock Exchange five years ago, and despite barely producing 10,000 cars a year, and annual revenues of about four billion euros, today boasts a market capitalization of around $50 billion.
But the key element in this fresh product diversification will be fashion – womenswear, menswear and childrenswear. Like the smarter contemporary brands this will be rolled out in six drops over the next 12 months.
Starting on Monday, right after the runway show both on Ferrari’s own website and on that of Italy’s most prestigious fashion e-tailer, Luisa Via Roma, based on the famed Florentine boutique.
However, the real test of the project is how the brand performs at retail internationally. Ferrari executives revealed that they have meetings planned with powerhouses like Harrods and Neiman Marcus. Whether this leads to a series of department store boutiques will be telling.
It was significant also who sat close to Elkann in the front row: Sir Jony Ive, the legendary product designer of Apple who now operates his own consulting business; and Marc Newson, the energetic Australian design star, who has been designing techy luggage for Ferrari for the last several years.
Neither Ive nor Newson - for some reason both wearing faux Breton fishermen tops - would reveal their next step with Ferrari, but their presence shows how much the auto-marque wants diversify its product range.
All this activity requires significant capital investment; several tens of millions of euros. Whereas its past licensing model felt more like a spigot, with significant royalties and annual sales of over one billion euros.
“It’s certainly a lot less costly just to sign more licenses. That’s for sure. There is a financial commitment, as John Elkann has reminded me more than once,” smiles Boari with an honest wink.
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