Ferrari’s (NYSE:RACE) landmark tie-up with Giorgio Armani will offer clothing and accessories more refined and artisanal than anything currently licensed with the brand’s iconic Scuderia mark.
The iconic Italian Supercar maker’s CEO Louis C. Camilleri, announced Monday during its Q-3 earnings call with investors that Ferrari had entered a “long-term manufacturing agreement” with luxury Italian fashion house Giorgio Armani Group.
CEO Camilleri said little on what consumers can expect to come from the partnership between 2 of Italy’s most coveted brands. But early details hint at products more sophisticated than the novelty items that are currently for sale through Ferrari’s website, and stores.
As CEO Camilleri put it: The deal with Giorgio Armani “underscores our ambitions to elevate the standards and quality of all our offerings.”
“A carefully chosen array of apparel products and accessories that will embody the style, creativity, and quality that we stand for as a brand,” he said.
To lead Ferrari’s move into high-end fashion, the company tapped boundary-pushing Italian designer Rocco Iannone, 35 anni, as the new brand diversification creative director. He will be in charge of developing “the creative content, design, and image of all of Ferrari’s own and licenced apparel and accessories collections,” the company said Tuesday.
Mr. Iannone is a menswear designer who demonstrates a love of romanticism, marks an interesting choice for a company steeped in the uber-machismo of Supercar culture.
The relationship with Giorgio Armani will be familiar territory for mr. Iannone, who spent a decade at the company, including a role as head men’s designer.
“I am eager to show that romanticism isn’t dead, and that men can be comfortable and elegant at the same time,” he said an interview in Y 2018, during which he also spoke at length about his love for color.
“Color is an essential element in beauty, nature, art, design,” he said.
A spokesperson for Ferrari did not immediately return a request for comment on the brand’s long awaited expansion into fashion.
Ferrari’s use of the artisans at Giorgio Armani group, which manufactures its Top line in Italy, will give the apparel line added cachet.
“Made in Italy will be a Key focus and we will exert full control over the design, quality, and pricing of these products as well as their distribution, which will include a complete overhaul of our own stores and a revamp of our e-commerce platforms,” CEO Camilleri told investors Monday on the call.
The manufacturing deal with Giorgio Armani is part of Ferrari’s multi-pronged strategy to extend the brand into consumer goods and services outside of Supercars.
Ferrari will also double-down on luxury services, like its driving simulation centers, and open a high-end restaurant in Maranello with Italian chef Massimo Bottura.
Ferrari plans to cut 50% its licensing business as a way to better control the quality of products carrying the brand’s name and logo. “Our current offerings are too stretched,” CEO Camilleri said Monday, and “are in danger of diluting our very precious brand equity.”
Ferrari’s automobiles sell anywhere from $350,000 to many millions of dollars are built in limited numbers in the Northern Italian town of Maranello. That means dedicated buyers can wait years to secure one of their own.
“Clearly, there aren’t many luxury items outside of the steel sports watches and certain handbags that have the same kind of wait list as your cars,” said George Galliers, an analyst Goldman Sacks analysts said before asking if the CEO was concerned about entering the cyclical fashion business.
“We have been very careful to ensure that we’re in the appropriate categories. So I’m not overly concerned by the cyclicality of that business,” CEO Camilleri responded.
The pivot toward more premium Ferrari-branded merchandise went over well with some analysts, including automotive analysts Adam Jones of Morgan Stanley, who quipped that he hoped there would be “no Ferrari-branded baby shoes, socks, and underwear down the pipeline.”
Giorgio Armani Group is a private company.
Enzo Ferrari’s iconic Italian Supercar manufacturer claimed the title according to the latest Brand Finance Global 500 2019 report launched at the World Economic Forum in Davos.
HeffX-LTN overall technical outlook for RACE is Bullish, overhead resistance is NIL at and support at 164.76 as 3 of our 3 Key indicators have turned Very Bullish and the stock has established long term support ahead of this breakout.
Ferrari finished at 165.44, -0.16 Wednesday in NY.
Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I see it at 200+/share in that frame.
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