Ferrari Commits to Building Luxury Lifestyle Brand
FIORANO, Italy — The appeal of Made in Italy is strong — and Ferrari plans to capitalize on that.
The intention to further build the brand’s luxury lifestyle offering was clear during Ferrari’s Capital Markets Day on Thursday, on the eve of Milan Men’s Fashion Week.
More from WWD
The event outlined several initiatives, from developing electric cars to looking into hydrogen fuel and reaching carbon neutrality by 2030, but building a luxury lifestyle brand was also addressed by chairman John Elkann and Ferrari’s chief executive officer Benedetto Vigna.
“Ferrari is at its core a luxury company and the most distinctive and innovative luxury brand, and we see huge opportunities lying ahead in further developing its lifestyle,” said Elkann, as he underscored the importance of “never compromising to be the unmatched expression of Italian excellence.”
To be sure, Vigna said that by 2026, Ferrari aims to double revenues in the lifestyle division through luxury goods, the brand’s experiential parks and museums, and collectibles, compared with 2019, while not providing a breakdown.
“We only touched the surface, and our lifestyle pillars can be used to delight customers in different ways and in different moments. We have a strong legitimacy,” Vigna enthused. “Either you are fully committed or you are not — and we are. We are serving only a fraction of the $300 billion market. This is a unique opportunity to make the brand relevant for a wider audience. Focus is key and we must address this with the right partners and talents to make it happen. It’s a new world.”
During his speech, the executive gave a shoutout to former Giorgio Armani and Pal Zileri designer Rocco Iannone, who was appointed creative director of Ferrari’s new luxury apparel and accessories collections in 2019, and to the former Pandora and Bulgari executive Carla Liuni, who was named chief brand officer earlier this week, as reported.
In an interview on the sidelines of the event, asked about the importance of fashion to convey this lifestyle message, Vigna said it can reach “a very large public and it affords expansive visibility.”
Ferrari has been seeing a rejuvenation of its loyal customer base in the 2018 to 2022 period, and a 60 percent growth in new collectors, with a 25 percent gain in the average number of cars. This is seen as a potential new customer pool for the brand’s luxury fashion, too, as are key regions such as Asia. “Women are also increasingly more interested, they become our ambassadors and help influence the purchases,” Vigna said.
The global appetite for luxury is growing, he said, but he insisted that Ferrari produces “unique cars and unique products,” and he is adapting founder Enzo Ferrari’s motto of delivering “one car less than the market demands” to the lifestyle division to maintain exclusivity.
Ferrari has been repositioning its fashion brand, streamlining its distribution, opening two stores in the U.S. and cutting back on its licenses. It is also further emphasizing its theme parks, such as the Ferrari World in Abu Dhabi, and its storied and recently renovated restaurant “Il Cavallino” — named after the symbol of the brand’s prancing horse and opened by the founder in 1950.
Vigna realizes the core Ferrari fans who perhaps merely want a cap with the brand’s logo should not be neglected. “We must be inclusive and exclusive and make sure that the offer is consistent with the brand.”
He pointed to the importance, “in any business, of creativity, resources, execution and focus,” and waved away the concept of brand differentiation. “What is that? It’s a dead concept. Ferrari is lifestyle.”
This consistency was also emphasized by Iannone. “After streamlining our licenses now it’s time to build with a strategic focus and consistency in creativity and design,” he said in a separate interview with Liuni. “But we all know it’s a long journey that requires time and patience.”
Liuni touted the importance of a full-fledged Ferrari fashion collection, saying that “fashion has a fundamental role, it acts as an amplifier, it allows to speak of creativity, identity and values in a way that no other sector allows.”
She admitted this was “a very ambitious project, although there is a side of glamour that helps us in this project.” In accepting the job, she was attracted by “the power of the brand in the collective imagination. I think there is a culture behind, that was never really fully explained. A luxury lifestyle brand can’t be identified with a single product and I am here to help in the orchestration, planning synergies and to communicate in a consistent way. I am obsessed by consistency of thought, style and discipline. This is as important as creativity and the excellence of execution.”
Ferrari has staged two fashion shows, the first last year at the company’s headquarters in Maranello, followed by one in Milan during fashion week in February. Iannone, who has said the collections will be regularly presented twice a year in Milan, confirmed he his working on his next show slated for September. Again, it will be coed, as he believes this is the format best suited for his design message.
Iannone and Liuni appeared to already be getting along like a house on fire, and the designer sees her arrival as “offering impeccable governance. She will help to discipline” the existing merchandising world with that of the luxury fashion brand and image that he’s been tasked to develop. “She excels in building a brand and creating a narrative of a universe.”
“Ferrari is wow,” Liuni said. “It represents Made in Italy like no other brand also because of its values, creativity, technology, innovation and design.”
Ferrari revenues are projected to grow to 6.7 billion euros by 2026, from the expected 4.8 billion euros in 2022, with earnings before interest, taxes, depreciation and amortization reaching between 2.5 billion and 2.7 billion euros, and a margin of between 38 and 40 percent. In the 2018 to2022 period, Ferrari’s accumulated industrial free cash flow is expected to reach 2.46 billion euros. In the 2022 to 2026 period, this is forecast to reach between 4.6 billion and 4.9 billion euros. Asked about potential M&As, Vigna said the company is strengthening its ties with its suppliers but is currently not looking at acquisitions.
