Chiara Ferragni Eyes Selling Stake in Her Company to Fuel Further Growth
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MILAN — Chiara Ferragni has been steadily expanding her namesake brand over the past two years but she knows more financial muscle will enable her business to get to the next level. To that end, Ferragni has given a mandate to BNP Paribas to help her find an investor.
“I want to stay on as central to the brand, to be fully engaged and have my say on strategies, but my goal is to continue to grow the brand internationally and I believe this is the right moment to seek a partner,” Ferragni told WWD. “To grow, we need injections of capital and investments that will allow us to make a quantum leap.”
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Asked about the stake she is potentially willing to sell, she said, “It depends on the investor; we are only just teasing the sale now.”
Ferragni is looking for an investor in her Fenice Srl company, which closed 2021 with sales of 4.6 million euros, threefold growth compared with 2020. Net profit totaled 800,000 euros, climbing 23 percent compared with the previous year. Ferragni is the founder and chief executive officer of Fenice.
Earnings before interest, taxes, depreciation and amortization amounted to 1.2 million euros, or a 26 percent margin on sales, up 240 percent compared with 2020.
Ferragni expects a solid 2022 for Fenice, forecasting a net profit of 1.7 million euros, up 113 percent compared with 2021, on sales of 12.5 million euros, which would be 172 percent growth compared to last year. EBITDA is expected to double to 2.4 million euros.
“We’ve just closed a very intense and profitable period of growth since 2019, investing in building a lifestyle concept for the Chiara Ferragni brand,” said the entrepreneur, who has been expanding her product offer through a number of new licenses, seeing the results of the strategy beginning last fall.
Aggregate turnover totaled 26 million euros last year and it is forecast to grow 130 percent to 61 million euros in 2022.
The licenses include ready-to-wear and accessories with Swinger, whose first collection under the agreement bowed for fall 2021; footwear with Mofra; a children’s line with Monnalisa; innerwear and beachwear with Velmar; jewelry with Morellato; stationery with Pigna, and children’s products, from strollers to furniture and textiles, with Nanan. Her eyewear collection produced and distributed by Safilo is bowing for spring.
image courtesy of Chiara Ferragni
Her own first makeup line was launched last November, and performed “beyond expectations,” she said. She insisted she did not want to sign a license for the category, rather choosing to work with Intercos. The makeup collection is exclusively available at the Douglas perfumery chain in Italy, Spain and Portugal, as well as at the online stores of both her brand and the retailer.
“I have always believed in the project and choosing this path with the right partners,” she offered, saying she felt confident enough after her beauty capsule collections with Lancôme. “I realized the public was interested in my name [associated with makeup].”
Her makeup line sold out in one month, she said, even before the Christmas season. Three additional drops are expected in April, September and December.
Featuring signature sparkling pink packaging and her signature blue eye logo that brands all items under the Chiara Ferragni umbrella, the offering included three shades of lipsticks, a mascara, an eyeshadow palette, a highlighting blush and a brow gel.
A licensed fragrance is in the pipeline, most likely to be launched next year, but details are still under wraps.
Asked if skin care could also be an extension, Ferragni said she is “interested” in this category, but “at the right moment. I am super careful because you must be very knowledgeable about it.”
Ferragni’s Instagram handle has 26 million followers and she continues to build her social media fandom, while she also piles up modeling contracts and ambassadorships with brands ranging from Hublot to hairstyling products company GHD. At the same time, she is president and chief executive officer of TBS Crew, the company she founded in 2009 and that manages her The Blonde Salad blog and activities.
That company closed 2021 with a profit of 1.4 million euros, up 8 percent compared with 2020 and sales of 6.8 million euros, climbing 42 percent on the previous year. EBITDA amounted to 2.7 million euros, a 40 percent margin on sales, and a 35 percent gain compared with 2020.
For 2022, Ferragni expects a net profit of 3.3 million euros, up 136 percent compared with last year and sales of 13 million euros, almost doubling revenues last year. EBITDA is expected to reach 6.2 million euros, up 130 percent.
The total sales volumes that revolve around Ferragni’s business amounted to 46.3 million euros last year.
image courtesy of Chiara Ferragni
While Ferragni has attended fashion shows for years, she believes in communicating her own brand through collaborations and capsule collections, rather than presenting it during a scheduled fashion week.
“I like to do things at my own pace, applying a consumer-centric strategy so that the brand is in tune with the customers’ needs. We communicate our products when they are accessible to the public, and this is what I like as a consumer, too — not having to wait months,” said Ferragni, who is planning an event in May. “Drops are a more modern way to do business.”
A Christmas party capsule, for example, was highly successful, she said and reached a diversified customer target — “not only young girls,” she underscored. She ticked off her “winning” collaboration with Nespresso in 2021 — which led to her promotional tours last summer and the opening of a temporary bar in Milan.
”I choose unexpected brands that I love for a surprise effect, and not necessarily in the fashion arena,” she explained. For example, previous collaborations were launched with Evian, Ladurée, Converse and Tod’s, among others.
Ferragni’s appointment to the Tod’s board made headlines last spring and drove up the price of the Italian luxury company’s shares. Tod’s chairman Diego Della Valle at that time explained that Ferragni would help “to build solidarity and support projects for those in need, raising awareness and involving the new generations more and more in these kind of operations.”
Asked to comment on the experience, Ferragni she said has “created strong and personal relations” with Della Valle and other top industry figures such as Maria Grazie Chiuri and Donatella Versace. “These are authentic relationships, not forced. They are true geniuses and when I have doubts, I turn to them for advice, there’s a true generational exchange based on respect.”
Ferragni has been increasingly building a structured organization and Fenice now counts 20 employees, expected to reach 30 by the end of 2022. In the second half of the year, she plans to move her employees — 80 percent of them are women — under the same roof in new Milan headquarters, spanning over 9,720 square feet, in central Via Turati.
Italy accounts for 50 percent of sales, and, while continuing to build this market, she is increasingly eyeing international growth. Europe represents 40 percent of revenues, while 10 percent comes from the Rest of the World, from America and the United Arab Emirates to Asia Pacific.
In addition to her stores in Milan and Cortina d’Ampezzo, the brand is available at department stores ranging from Rinascente and Coin Excelsior to Galeries Lafayette and Harrods.
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