Salvatore Ferragamo

With 650 flagship stores in 100 countries, and the highest compound among luxury companies in Borsa Italiana, is glorifying the values of its founder. Thanks to the excellent union of the family (who controls the majority share) and a best class management

Ferruccio Ferragamo

Ferruccio Ferragamo

In the beginning he was the shoemaker to the stars. It was the early 1920s when young Salvatore Ferragamo from Bonito (Avellino), Italy, the eleventh of 14 children, emigrated to the Usa in search of his fortune, just like many of his fellow countrymen at the time. He won over the up-and-coming Hollywood film industry by hand-making cowboy boots for westerns and Roman and Egyptian sandals for historical epics. Today the company that bears his name is one of the most famous brands for Italian craftsmanship worldwide, with an export quota of 90%, a network of around 650 single-brand stores as of 30 September 2015, which are found in approximately 100 countries and count 4,000 employees. «Yet our dna has remained intact», Ferruccio Ferragamo tells Capital, son of Salvatore and president of the group, which has conquered the world without ever giving into the temptation of easy money.

 

Ferragamo is one of very few players within the luxury sector that has not outsourced its production, or part thereof, nor shopped for third party brands or handed out licences en masse in an attempt to exploit the strength of the brand. More specifically: the company has its headquarters in Florence and makes everything within Italy according to a formula that has remained unchanged, or almost, since the post-war period. This consists of a central factory that creates and develops the products and around one hundred third party workshops, spread mainly throughout Tuscany and Campania, that craft them. The group acquired Ungaro in the mid-90s, only to then sell it a few seasons later, and this was to be its only extra transaction. It has only two product categories -watches and eyewear- which are made under license. «Everyone should do what they know how to do», states Ferragamo, who closed the first nine months of 2015 with revenues of over 1 billion euro, for which their own footwear and leather goods accounted for 79.2%.

The company has been able to evolve over the years, opening itself up to external management, which has been entrusted since 2006 to the expert guidance of Michele Norsa, Ceo and general manager. It was also floated on the Italian stock exchange in 2011, once again going against the tendencies of other luxury brands which are reluctant to open up to the market. Yet the reins have remained firmly in the hands of the family in order to safeguard Ferragamo values. Wanda Ferragamo, Salvatore’s widow and Ferruccio’s mother, heads it all up. In 1960, upon the death of her husband and with six children between the ages of 3 and 17 in tow, she was able to take up the legacy of the founder and transform the company into an international brand. «Today, at 94 years old, she still comes to the office everyday and nothing happens without her knowing about it», confirms her first born son.

On the subject of management and the stock market, he clarifies: «We know how to make shoes, but children also. There are a good 93 Ferragamo offspring. That is why we have decided on a corporate structure that can protect everyone and can guarantee the continuity of the company in the long term». Because for Ferragamo strategic decisions are made early on, when there are no emergencies that have to be managed. That’s what  many Italian entrepreneurs struggle to do, only to find themselves needing to manage complex generational transitions that could endanger the very survival of their companies. The Ferragamo recipe seems to be an example for others.