Missoni defies emerging market concerns with new shops
By Isla Binnie and Sabina Suzzi
MILAN (Reuters) - Italian fashion house Missoni is opening new shops in Turkey, Russia and India, and is close to signing a joint venture in China, its chief executive told Reuters, brushing aside concerns over the recent volatility of some emerging market economies.
Alberto Piantoni also dismissed speculation the firm, known for bold zigzag patterns, might come up for sale after the deaths of co-founder Ottavio Missoni and his son Vittorio last year.
"The family wants to retain 100 percent control, so new investors, an IPO, are not on the agenda," he said.
Piantoni said the firm expected sales to rise 4-5 percent this year after staying broadly stable in the past three years, partly due to a contraction in Italy and other European markets during a long economic crisis. Sales should rise 5-6 percent a year in the two following years, he added.
By comparison, Boston Consulting Group sees global luxury sales growth of 6-7 percent a year over the next three years.
Piantoni said Missoni, which made 170 million euros (140 million pounds) of revenues including licences last year, would open two boutiques in Turkey this year, as well as one each in Russia and India, helping to drive the sales growth.
The firm, which has 82 "points of sale" including shop-in-shops, wants to increase the share of revenues it makes through its own outlets, which give it higher margins than wholesale sales and more control over its brand image.
It currently makes around 80 percent of its sales in the wholesale channel, and 20 percent in retail. Piantoni said he would like the split to be 70-30 percent.
After withdrawing from China in 2011, Missoni is now close to signing a joint venture with a local partner for a retail business there, Piantoni said. "We are very confident that we can finalise this agreement in the next few weeks," he said.
Missoni, established by Ottavio and wife Rosita in 1953, also plans to increase its range of high-margin accessories.
It is close to signing a licence agreement for perfumes bearing the brand within a month, and is finalising a licence for shoes, Piantoni said.
"In the next three years, we could make around 30 percent of sales from shoes, bags, perfumes and eyewear", from a very low percentage at the moment, he said.
With debt of less than 5 million euros, the firm could afford to invest in its retail network and new products without stretching its finances, Piantoni said, adding its EBITDA margin - a key measure of profitability - was around 12 percent last year and should rise to up to 14 percent this year.
Piantoni said the family remained committed to the business for the long term. While Ottavio and Rosita's children Luca and Angela are the "points of reference" in the firm, grandchildren Margherita and Ottavio have taken on some communications and commercial responsibilities already, he said.
"The third generation will certainly come on the scene," Piantoni said.
(Editing by Mark Potter)
