Made in Italy brands race toward the billion mark

In the 1990s, when the fashion system was building its foundations, industry experts claimed that the maximum turnover a fashion brand could aim for was 2 billion euros. Today that figure has been far exceeded by Italian fashion brands such as Gucci, Prada, and Moncler, while others are close to reaching the titanic figure of 1 billion. Helping MFF in this investigation into Italian fashion revenues were Emanuela Pettenò and Gabriella Melacca, consumer markets leader & deals markets leader and consumer markets driver at Pwc Italia, respectively.

«We looked at Italian b2c fashion companies, listed and unlisted, independent and part of international groups, active in both brand management and fashion retail, selecting those that for size and growth rate in the last three years have exceeded the milestone of 1 billion euros in revenues or can aspire to reach it», they explained. Therefore, b2b companies (manufacturing and processing subcontractors), fashion brand licensing (perfumes, cosmetics, eyewear) and Italian companies of the Lvmh group (Bulgari, Fendi and Loro Piana), which do not publish data by brand, were excluded.

Overall, 23 companies were sampled, 12 listed and 11 unlisted, whose revenue trends in 2019-2021, ebitda and ebitda percentage for the past three years were analyzed. Among the listed brands, the closest to nine zeros is Versace of Capri holdings limited with 936 million euros, followed by Tod’s with 884 million and Brunello Cucinelli with 712 million. Still far behind for now is Basicnet, 296 million euros. Those who far exceeded it, however, are Gucci of the Kering group with 9.7 billion in revenue, Prada, 3.3 billion, Moncler, 2 billion, Bottega veneta (Kering), 1.5 billion, and Yoox Net-a-porter (Ynap) (Farfetch), 1.45 billion, Ovs, 1.35 billion, Ermenegildo Zegna, 1.29 billion, and finally Salvatore Ferragamo, 1.13 billion.

«The listed companies in the sample have an average revenue of about 2 billion, with an average margin of 25.7%. Gucci leads the ranking in both revenue and ebitda margin (44%). Ynap reported 70% organic growth from pre-covid-19, driven by the e-commerce boom, with ebitda improving significantly, but still negative», the experts pointed out. The other listed companies in the sample essentially managed to recover in 2021 the revenue loss suffered in 2020, while maintaining very high margins in double digits. After Ynap, the top performers in terms of growth are Bottega veneta and Versace, followed by Brunello Cucinelli and Moncler, net of the acquisition of Stone Island. In terms of ownership structure, in many listed companies, entrepreneurs and founders have maintained a prominent position in the shareholding or management. Kering group’s brands, Ynap, and Ovs are the only exceptions.

Among unlisted brands, however, Benetton approaches the billion mark with 847 million. Further behind are Geox with 609 million, Tecnica with 465 million, Liu jo with 400 million estimated, and Golden goose with 386 million. Calzedonia sits on the podium with 2.5 billion, followed by Armani at 2 billion, Max Mara at 1.5 billion, Only the brave (Otb) at 1.45 billion, and Dolce&Gabbana and Valentino both at 1.2 billion. «Unlisted companies in the sample have an average turnover of about 1.2 billion, with an average margin of 18.3%. Calzedonia leads the ranking in terms of revenues with an ebitda margin above 30%. The champions in terms of growth are Golden goose (+47%) followed at a distance by Tecnica and Dolce&Gabbana», the experts stated. The average margins of the companies in this sample are lower than the listed ones, as they are more diversified in terms of product and positioning, but all have high double-digit ebitda margin, except Benetton and Geox, still far from a full recovery to pre-covid-19 levels. In terms ownership structure, all the unlisted companies, except for Valentino and Golden goose, are an example of family capitalism.

«The fashion market is characterized by elements of high uncertainty related to rising interest rates, rising commodity prices, intermittent lockdowns in China, and, for some brands, the loss of significant volumes in the Russian market, which have not yet been fully replaced», they continued. On the other hand, the boost of online and resale commerce, as well as the upswing in travel for both business and tourism reasons, are creating significant growth opportunities. «Entrepreneurs, especially at the helm of unlisted companies with succession issues, are faced with the need to reflect on the path forward», said the two Pwc experts. «For both listed and unlisted companies that have not yet recovered to pre-covid-19 levels, the solution to consider is probably a combination with an industrial partner to lead the turnaround», they concluded. (All rights reserved)