Salvatore Ferragamo Owners Choose Continuity

MILAN — Changes, yes. An overhaul, no.

The announcement of Ferruccio Ferragamo’s exit as Salvatore Ferragamo’s longtime chairman on Tuesday and the confirmation of the company’s management was favorably received by the Italian Stock Exchange.

Salvatore Ferragamo shares closed up 2.35 percent at 16.53 euros at the end of trading Tuesday.

Ferragamo Finanziaria SpA, which controls the Salvatore Ferragamo company with a 54.28 percent stake, deposited on Tuesday the list of members who will be proposed during the general shareholders meeting for the renewal of the board scheduled on April 22.

There were a few surprises because, contrary to the speculation circulating for months here, executive vice chairman Michele Norsa and chief executive officer Micaela le Divelec Lemmi made the list and will stay on. The board will remain in charge until Dec. 31, 2023.

Ferruccio Ferragamo, aged 75, will be succeeded by his brother Leonardo, but he will continue to hold the role of chairman of Ferragamo Finanziaria.

Ferragamo Finanziaria revealed in January it was cutting back the number of family members on the board of Salvatore Ferragamo and increasing the number of independent directors, tapping an executive search firm to complete the process.

The list of members has been whittled down to 10 from 13, and includes two additional Ferragamo members: Angelica Visconti, daughter of the late Fulvia Ferragamo, and sister of Ferruccio, as well as James Ferragamo, brand and product and communication director. The son of Ferruccio, last year he resigned from the board, allowing Norsa to be recruited and assume the executive powers previously exercised by his father.

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Longtime Ferragamo partner Peter Woo, who has a 5.99 percent stake through Majestic Honour Limited, was also on the list of board members.

Members of the Ferragamo family have a 10.69 percent stake, and a 29.11 percent stake is free floated.

Signs of continuity emerged last week, when WWD learned that Donald Kohler, CEO of the Americas region, was to exit the company and that le Divelec Lemmi was taking on his role ad interim.

Rumors have also been swirling around the future of creative director Paul Andrew. WWD was the first to report in January that Andrew’s contract was said to expire in February.

A market source on Tuesday told WWD that Andrew is in the U.S. for his Easter holiday and that negotiations with Ferragamo are ongoing.

Andrew was promoted to the role of creative director in February 2019. The designer joined Ferragamo in September 2016 as women’s footwear director and was promoted a year later to women’s creative director.

A luxury goods analyst who spoke on the condition of anonymity expressed his surprise that le Divelec Lemmi and Norsa were staying on, wondering if perhaps the Florence-based company had opted for “a sign of continuity to avoid postponing the long-awaited turnaround of the brand.” The analyst did express their  confidence that a smaller number of family members in the board could signal a change of pace, however.

Le Divelec Lemmi is a Gucci veteran who joined Ferragamo as chief corporate officer in April 2018 and was named CEO at the end of July that same year.

The Ferragamo family had turned to Norsa as a trusted executive for support while the first wave of the coronavirus pandemic was spreading in Italy. Norsa was appointed director of the board and executive deputy chairman, returning to Ferragamo after a 10-year experience as CEO in the 2006-16 period, during which he publicly listed the company.

Ferragamo on Tuesday said the selected board members were a significant step in “the enhancement of the autonomy in terms of strategy and management of Salvatore Ferragamo to face the important future challenges.”

A Milan-based analyst also believes choosing continuity would be a signal appreciated by the financial community.

Analysts have been taking a wait-and-see approach, hoping for more visibility on the future direction of the company. For example, Jefferies’ research on March 9, called “The Waiting Game,” stated that “Metrics matter less than strategy here. With a very significant [board] reshuffle coming, it must be difficult to plan ahead in detail at this time and this is what our key takeaway from the call was: still poor visibility on many fronts.”

An industry observer believes that dramatic changes at the board and management levels would have been “too much” for investors to take in and wondered if perhaps there were potential changes at the shareholding level that would be in conflict with a management shake-up.

A more independent board, appointed by professionals, has led to speculation about a possible sale of the company, although the Ferragamos have repeatedly denied a sale was in the cards.

In January, Claudio Costamagna became a member of the board of Ferragamo Finanziaria. Previously a board member of Luxottica and Bulgari, Costamagna is a banker and businessman, and a former chairman of Cassa Depositi e Prestiti, controlled by the Italian Ministry of Economy and Finance. He has a successful track record in merger and acquisition operations, further fueling rumors about a change of hands for Ferragamo.

The impact of the COVID-19 pandemic hurt Salvatore Ferragamo’s bottom line and revenues in 2020, but the company is seeing improvements, reporting a positive performance of the brand’s stores in the first nine weeks of 2021, topped by solid growth in China and Korea and an 85.6 percent gain in the digital channel.

In the 12 months ended Dec. 31, revenues fell 33.5 percent to 916 million euros, compared with 1.37 billion euros in 2020. Ferragamo reported a progressive improvement in the second half.

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