Multi-brand Italian group established in 1980 and active in luxury goods. The AEFFE Group owns the Alberta Ferretti, Moschino, Narciso Rodriguez and Pollini brands. It is located in San Giovanni in Marignano, not far from Cattolica. Alberta Ferretti’s Group is among the world’s most important companies in the design, production and distribution of luxury goods. Indeed, The Group manufactures and distributes men’s and women’s wear, shoes, underwear and beachwear, small leather goods, accessories, perfumes and glasses. The original core of the business was founded in 1975 and named after Alberta Ferretti, the renowned designer.
From the beginning, the division of roles within the company was clear: Alberta supervised the design and creative part, while her brother Massimo was president and manager. In 1981, Alberta presented her Collection in Milan for the first time. Moreover, two years later she began her partnership with Moschino, a new name in Italian fashion, through an exclusive license agreement for production and distribution. During 1985, the first Alberta Ferretti boutique in Milan opened and the new Philosophy line made its début. Furthermore, she had a collaboration with the Turkish-born English designer Rifat Ozbek dates to 1988. Last but not least, in 1994, a production and distribution agreement for the prêt-à-porter lines of Jean-Paul Gaultier was concluded.
The AEFFE Group Lends in the USA
Aiming to consolidate the Group’s presence in the American market, AEFFE USA Inc. was established in New York with premises on 56th Street. The following year, The Group saw an agreement with the American designer Narciso Rodriguez that gave AEFFE an exclusive license for the production and distribution of the prêt-à-porter Collections of his company. That firm, based in New York, is owned half by AEFFE and half by Rodriguez. At the end of 1999 AEFFE acquired 70% of the Moschino griffe. In this way the AEFFE Fashion Group was born.
Acquisition and Expansion
In 2000, LDV Holding, part of the Gruppo San Paolo IMI, joined the Group with 20% ownership. This widening of the shareholding base was a prelude to and prepared for the Group’s expansion. Additionally, in 2001, AEFFE took over Pollini‘s majority stake in order to consolidate its competitive presence in the business of shoes, leathery goods and accessories. During the same year, it acquired 50% of Velmar, a company specialized in underwear and beachwear, in order to complete its line of products. With these acquisitions AEFFE Fashion Group attained a critical mass enabling it to remain at the forefront of a super-competitive world market in luxury goods.
AEFFE P-Box Stores
The underwear and beachwear Collections made their début under the name of Alberta Ferretti with a strategic position in the medium to high price range. In 2002 Milan saw the début of the first store belonging to the P-Box project. There all the accessories Collections of the entire AEFFE group were sold. Furthermore, during 2002, three more P-Box stores were opened, in Cattolica, in Milan and in Modena. Also launched in 2002 was the first Pollini line of men’s and women’s wear. The Group manufactures its clothing through a network of small firms spread out all over Italy. Shoes and bags are made by Pollini. For the other items there are license agreements with third-party producers and distributors. Particular attention is paid to distribution.
The Presence of The AEFFE Group at a Global Level
Besides the company showrooms in Milan, London, New York, Paris and Tokyo, there are showrooms run by agents and/or importers, sometimes on an exclusive basis. This kind of structure allows the distribution of the Group’s products in some 4,500 multi-brand points of sale all over the world. In addition, the Group controls 160 stores, either directly-owned or franchised, with 93 of them selling a single brand and 67 shops in shop. Moreover, in 2001 the Group showed remarkable growth: revenue reached €242 million with a net profit of €10 million. The turnover grew more than 40% compared to 2000 and was partly due to continued-operations growth and partly due to the acquisition of Pollini, whose turnover of €25 million was consolidated for the first time in 2001. Without taking Pollini’s results into account, real growth would have been 18%.
Ups and Downs of the Group
In 2002, net revenues would amount to €250.4 million, and net profit €17.3 million. “In a quiet economic situation this would be an unsatisfying result, but bearing in mind the industry’s trend of losses, these few percentage points must be considered a positive outcome,” said President Massimo Ferretti. During 2003 the Group focused its efforts on retail. The P-Box formula — the sale of accessories from all the brands in one shop — was repeated with other items. “Starting in September 2003 with the opening of the first Italian store, a similar operation will sell clothing. All the lines of AEFFE’s brands will be concentrated in the same selling space.
The AEFFE Group’s multi-brand and multi-product approach
The Group’s multi-brand approach is perfect for medium to small size towns; “attacking” them with single-brand stores would be tantamount to an extreme standardization of our products”, says Ferretti. “In addition, this type of distribution allows us to strengthen the reputation of each brand, another asset upon which the Group is concentrating its resources. At the beginning of 2003 important plans were set in motion with the aim of positioning the business for sustained growth over many years.” Among these were a joint-venture for the Moschino lines in the Far East, a distribution agreement for Pollini with Itochu for the Japanese market, and one with Fairton Strategy Limited in Hong Kong.
In the U.S., which represents 19% of the total turnover, the aim was to promote new product categories, from accessories to shoes to beachwear, but above all the new Pollini clothing line. After leaving behind a 2002 characterized by growth (both in turnover, of 3.5% to 250.4 million, and in the gross operating margin, of 22.5% to 38.4 million), the group invests 30 million for the period 2003-2007. Two agreements are signed with Itochu for the Japanese market: a joint venture for Moschino, and one for the distribution of Pollini. A different strategy in the U.S. “Across the ocean our target is to introduce new categories of product: accessories, shoes, beachwear, underwear and, above all, Pollini’s new clothing line.”
The AEFFE Group arrives in Moscow, Paris and China
A year mainly dedicated to retail. New openings in Moscow and Paris, with the début of three stores in each town, selling Pollini, Moschino and Alberta Ferretti. An intensive schedule for Pollini: re-styling of the boutiques in Bologna, Parma, Florence, Venice, Bergamo and Rimini. Openings in Japan of five corners in as many department stores. Moreover, two boutiques opened in China, one in Guangzhou, the other in Shanghai. Rifat Ozbek, after three years away, is back as creative director of the Pollini Collection of women’s wear.
For 2004 the Moschino brand focused its development strategies abroad, especially on the Far East, the U.S. and Russia. In particular in Japan, a joint venture strengthened the company’s presence there. In the U.S. the effort is made through the department stores. In Russia, a collaboration with the group Bosco dei Ciliegi allowed the opening of a new boutique.
Alberta Ferretti’s Group produced the Collections of Basso & Brooke and Sinha/Stanic, winners of the Fashion Fringe Campaign 2004. Moschino has 24 single-brand stores and 50 shop-in-shop and corners all over the world. The Pollini line works with Georgina Goodman, an English shoe designer, meanwhile, the creative direction of the line remains in the hands of the founders, the brothers Alberto and Antonio Pollini.
The AEFFE Group lends in Korea
After the opening in 2004 of the first point of sale in Korea, in Seoul, Pollini opened a second boutique for clothing and accessories in Pusan. Moschino and FALC signed an exclusive three-year license to produce Moschino men’s shoes. The first Collection is to be in the market in the Spring-Summer 2006. FALC employs 300 people and has a turnover (2004) of 90 million euros.