Cavalli Shakeup: Dundas Exits, Job Cuts Ahead
MILAN — The changes keep coming in the Italian fashion world.
On Wednesday, Roberto Cavalli SpA joined the trend, parting ways with its creative director Peter Dundas and revealing plans for a drastic reorganization that will result in the cutting of almost 30 percent of its workforce.
Dundas’ last collection for the fashion house was for spring 2017, which was presented in September during Milan Fashion Week.
The reorganization aims to return the company to operating profitability in 2018. Following a meeting with the unions, the firm said it will cut about 200 positions out of a total global headcount of 672.
With the goal to streamline its company structure, Cavalli will close its Milan corporate and design offices and transfer all functions to Osmannoro, Florence. Production and logistics will be rationalized and a number of stores will be closed or relocated.
“The fashion industry is facing uniquely challenging times, with changing consumer demands, significant contraction in various key markets and fundamental transformation in the industry’s dynamics,” said chief executive officer Gian Giacomo Ferraris. “In this environment, only iconic brands with a coherent business model and an efficient organization can survive. After my initial examination of the company I believe the Cavalli brand has what it takes to succeed. But the reality is that the company’s costs must be in line with its revenues and that is the task we now have to embark upon.”
The departure of Dundas comes a little more than a week after Italian men’s wear brand Brioni dismissed its creative director, Justin O’Shea, after only six months in that role and the departure in July of Valentino co-creative director of Maria Grazia Chiuri, who took on the same role at Dior as Pierpaolo Piccioli became sole creative director at Valentino.
Last April, Anthony Vaccarello exited Versus to join Yves Saint Laurent while in February, Ermenegildo Zegna decided not to renew the contract of Stefano Pilati, tapping Alessandro Sartori to succeed him. (Versus on Wednesday said it was partnering with the singer Zayn, who will design a men’s and women’s capsule collection to be launched in May and who will also front the brand’s ad campaigns.)
Meanwhile, Italy’s leading fashion brands have seen a merry-go-round of executive changes, with new ceos at Salvatore Ferragamo, Versace and, just this week, Pal Zileri and Boglioli.
Now the winds of change have hit Cavalli. Asked about the cuts and who would be most affected by the plan, Ferraris said this was a “comprehensive restructuring plan, encompassing the whole organizational structure.”
He explained that “a company of this size cannot have two separate entities in Milan and Florence,” and that he was looking to optimize synergies. The vertical cuts will touch managers as well as employees in design and product development. “We must have focused collections and close stores in provincial cities or that are underperforming,” said Ferraris, citing units in Venice, Vienna and Madrid as examples.
Ferraris waved away the need to specifically have offices in Milan. “The world is changing, it’s an outdated and provincial concept. We must reunite and restructure the company, make it more compact. I myself need to stay in contact with the workers and avoid feuds, miscommunication and inefficiencies. The situation could not go on this way. The company was unbalanced, there were more operating costs than sales.”
Ferraris said that he expected sales in 2016 to amount between 155 million and 160 million euros, or $172 million and $177 million at current exchange. The executive underscored that the company had no debt.
The pipeline at the manufacturing plant in Osmannoro ranges from stocking fabrics to design and the development of prototypes, samples and products.
The restructuring of the company will start in the coming days.
Rumors about potential cuts at Cavalli have been circulating for months. In November 2015, more than 200 workers of the Roberto Cavalli factory in Sesto Fiorentino, in Tuscany, walked the streets of Florence to protest against Clessidra’s decision to open a mobility procedure for 66 employees.
Ferraris, a former Jil Sander and Gucci executive, succeeded Giancarlo Di Risio at Versace in 2009 and launched an extensive reorganization plan aimed at returning the company to profitability in 2011.
At the time, the company was expecting sales of 273 million euros, or $405.6 million, and an operating loss of 30 million euros, or $44.6 million, and Ferraris set in motion a cut of 25 percent of its workforce, or around 350 jobs. He sought to rationalize costs by streamlining such non-core operations as the logistics department to create a more flexible structure. Ferraris also shuttered the three-year-old Burago accessories plant for greater efficiencies, moving the production into Versace’s historic clothing factory in Novara.
In 2010, Versace swung back to profit ahead of the 2011 date that had been forecast, and started setting its expansion.
Regarding Dundas’ departure, Ferraris said, “On behalf of Roberto Cavalli and our shareholders, we thank Peter Dundas for his contribution to the brand, and we wish him well for his future. As Roberto Cavalli goes through a period of transformation, the design team will carry on and the appointment of a new creative director will be made in due course.”
Without providing additional details about Dundas’ exit, asked about a potential successor, Ferraris said it was not “an immediate” issue, but that he believed the brand needs a creative director. “This is a fashion company with a very clear DNA. We may go with a top designer along the model of Karl Lagerfeld for Fendi or promote an in-house designer like at Valentino or Gucci, but it may not be before September 2017.”
He also said that Cavalli the designer ”is a shareholder, has the role of an ambassador, there is respect for him as the founder and a point of reference,” but that he is not more actively involved in the company now.
“I want to thank Roberto Cavalli and the Group for this valuable experience and I wish them the best in their future endeavors,” said Dundas. “I am especially grateful to the ateliers and the teams who participated in this adventure.”
Dundas was appointed creative director of the Florence-based company in March 2015. The Norwegian designer had been the artistic director of Emilio Pucci, also based in Florence, since 2008. It was a homecoming for Dundas, who had worked with founder Roberto Cavalli and his wife Eva as head designer from 2002 to 2005.
Dundas’ first collection for Cavalli bowed in Milan in September 2015 for spring 2016 but received mixed reviews as the designer wanted to break with the past by injecting elements of youth, street savvy and touches of the Eighties. In his next collections, Dundas went back to his comfort zone, presenting rich and opulent designs with bohemian airs.
Dundas’ first major solo appointment came in 2005 when he was named artistic director at Emanuel Ungaro. After Ungaro, the designer consulted for Dolce & Gabbana before being appointed creative director of French furrier Revillon in January 2008. Known for his Seventies, rock-sexy designs and knack with prints, Dundas’ sensibility was perceived to be in sync with Cavalli’s own feminine and head-turning looks, animal prints and body-hugging silhouettes that have long been red-carpet mainstays.
Dundas is no stranger to the party circuit, and is frequently spotted on the arms of “It” girls and models including Natasha Poly, Poppy Delevingne or Bianca Brandolini D’Adda, echoing Cavalli’s own flamboyant lifestyle and star-studded events on his yacht at the Cannes Film Festival.
The designer was responsible for the creative direction of the women’s and men’s ready-to-wear and accessories collections, as well as all licenses. He was also directly involved in the marketing and communication strategies of the brand.
The Cavalli brand has been going through a phase of changes. Italian private equity fund Clessidra bought 90 percent of the company at the end of April 2015, shortly after Dundas’ arrival. The founding designer retained a 10 percent stake, but has eased out of the fashion industry and never attended a show for the brand. At the end of July this year, Roberto Cavalli SpA appointed Ferraris as its new chief executive officer, succeeding Renato Semerari, who left over strategic differences. Ferraris was previously Versace’s ceo. Francesco Trapani, former president of the company, had tapped Semerari at the time of the acquisition of Cavalli.
Trapani, a former chairman of LVMH Moët Hennessy Louis Vuitton’s watches and jewelry division and Bulgari executive, had joined Clessidra in 2014. There, he spearheaded the acquisition of Roberto Cavalli. His departure was expected following Italmobiliare’s acquisition of Clessidra in May. Trapani was also Clessidra’s chairman and he left that role in the second half of September.
Last year was one of transition for the Cavalli group. In the 12 months ended Dec. 31, net profit totaled 32.7 million euros, or $36.3 million. This compares with a loss of 9.7 million euros, or $13 million, in 2014. The sale of the building housing the brand’s flagship in Paris’ Rue Saint-Honoré helped lift the company’s profits, as well as its net financial position. The company is renting the space where the store continues to stand.
In 2015, revenues were down 14.2 percent to 179.7 million euros, or $199.4 million, compared with 2014. The company attributed the drop mainly to a decrease in orders predating Clessidra’s acquisition and to the challenges in luxury markets, especially Russia, where the Cavalli brand has been historically strong, as well as a contraction in sales derived from licenses. Dollar figures were converted from the euro at average exchange rates for the periods in question.
In addition to the signature brand, the group includes the young casual Just Cavalli, the bridge line Cavalli Class, the Roberto Cavalli junior line and a home collection and a hospitality sector through its network of Cavalli Clubs and Cavalli Cafés, in cities ranging from Miami to Dubai.
Cavalli’s network of stores last year totaled 182.
Launch Gallery: Peter Dundas at Roberto Cavalli
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