An interesting portfolio for highly dynamic brands

19/09/2011 - interview with Enrico Ceccato, CEO

Export Magazine: Last year, on the eve of the Tax Free Exhibition in Cannes, we talked about the many projects in progress: can we take stock of the situation?

Enrico Ceccato: “Yes Indeed, we have developed several projects at the same time since the last Tax Free Exhibition. It is part of a very ambitious process that we started one year ago. The first part of this process consisted in the implementation of more than thirty new projects including innovation launches and portfolio renovation projects. And this year we will present the fifteen ones that have been finalized and ready to launch. We expect these projects to be as successful as the ones that have made our success up until today: La Perla Divina, Ferrari Scuderia and John Galliano Parlez-Moi d’Amour. We learned from these launches that a coherent and precise concept is a key success factor nowadays. And we have applied these key learnings to the projects that we will present this year.

The second part of our ambitious process consisted in the  implementation of a strong push to our distribution structure, considering also brand marketing programs that would be taylor-made to be targeted channel distribution.

To do so, we needed to be closer to our markets. That is why we begun to distribute directly in some markets and work in close cooperation with others owing to some joint-venture agreements. All the partners we selected believe as much as we do in our ambitious process and brand innovations: - In the Far-East Asia, our joint venture Luxasia is performing very well. From September on, this joint-venture will be directed by a General Manager coming from the luxury industry and having a deep understanding of the area. Luxasia should benefit from this deep experience and market understanding.

The objective is to further grow the main emerging markets sales. In the middle East, we have opted for the same type of solution, creating a partnership with the Lys Bleu company owned by Mr. Abdullah Al Fahim, owner of Paris Gallery and who have a strong experience in the retail field. Again, we aim to get closer to the market. And Lys Bleu will be our key interface with our local distributors. We hope that this partnership will enable us to promote both sell-in and sell-out sales, with a specific focus on a qualitative merchandising work at the point of sales.

In Europe, we have a direct presence owing to our European Key Account Manager who works directly on the main markets such as Italy, Germany and UK. In Germany, one of our most strategic market in Europe, we are already in direct contact with the key distribution chains and have signed an agreement for both Germany and Austria with ITF Germany, in charge to deal with the sales dedicated to the independent perfumeries. In the UK, we have signed a partnership with the very well-known Shelley Smith who used to be the General Manager of the Selective Beauty UK branch. In France, we have sold directly for many years, trying to manage at best all the market difficulties. In Spain, we hope to reach an agreement in the short term, which so far has been slowed down by the crisis. In Italy, we are changing to better adapt ourselves to the requirements of the distribution. From being fragmented the distribution tends to concentrate, with some bigger chains growing now very quickly such as Limoni.
In Russia, the reference market in Eastern Europe, we have an office in Moscow with one Country Manager following directly the clients.

In the USA and South America, we have a dedicated team based in New York. 5 people in total working under the management of Jose Penalba with two top priority goals to achieve: manage relationships with the main partners on the USA market (mainly wholesalers) where our brands Ferrari and Benetton have an historical presence with excellent sales results and maintaining relationships with the dozen of distributors that we have in the different other American countries, from Canada to Argentina.
In South America, Brazil deserves a special award: Ferrari is one of the leader and we are over performing thanks to this brand. The result of the hard work delivered by the team of Jose Penalba and our local distributor, Frajo.

At last, the third part of our ambitious plan consisted in the restructuring of our internal processes. Last year, we worked with a consulting company to go into the details of all these processes. We took into account their recommendations and applied them at both industrial and operational levels. Today we can say that there are some real improvements. The results are really tangible: we now have a highly efficient planning system, we have improved our costs efficiency, we reallocated resources and increased our production performances thanks to the investment in some new semi-automatic lines in our Parma factory. In summary, we can say that we are reaching many of the objectives that we set ourselves when entering the capital of Morris and Selective Beauty. The synergies that we planned to achieve have been nearly finalized and the quality of our work has improved at all levels. We can now say that we develop products with a high perceived value for consumers and at affordable prices.
The focus given to the quality of our coming innovations, our new distribution strategy and the industrial investments we have done allow us to look at the future with optimism and this, despite a difficult global economic situation.

As opposed to many other industries, we believe that our sector will keep being anti-cyclical as it has always been and keep growing in the coming years. We also believe that our main source of growth will come from the emerging markets that are developing at very high rates and can guarantee some great opportunities for the future.

Export Magazine: You have three poles, Parma, Paris and Milan: what are their respective functions?

Enrico Ceccato: Paris is our creation center. This is where we gathered the members of the marketing team: a young team full of passion and professionalism. Parma is our operative center. Our finance, administrative and logistics departments are located there, just nearby our factory. Milano site combines the Head Office and the Italian branch. This is where our European controlling team is based.

Export Magazine: What will you be discussing with your partners at the Tax Free Show in Cannes?

Enrico Ceccato: Considering the new organization of our international structure which plans regional meetings in the various areas of the world, the meeting at the Tax Free Show in Cannes will essentially be a good opportunity for us to build closer relationships with our customers, always in an efficient way.

On top of this show, we will try to organize a seminar with our most important partners the weekend before in order to collect their feed-backs on the new projects and discuss the local implementation with them. Key projects for this year being of Ferrari and Benetton, with the objective to manage the space in some 200 strategic points of sales in the world. Indeed point of sales visibility leads to excellent results. We will therefore try to be as much visible on shelves as possible with these innovations. Just to give you an example : in Dubaï , sales have been boosted because we won a very important space in a highly prestigious mall. The same will happen in the main Asian department stores.

Export Magazine: How do you estimate your presence in duty free stores?

Enrico Ceccato: The tax free distribution channel, which is fundamental for a brand image in the perfumery industry, has also performed very well these last years. It is one of the few places in the world where the consumers can be fascinated at first sight by a product, buy it and then become a faithful buyer of this product. That is why we are moving quickly in various part of the world to ensure good places in the most strategic duty free stores. Then local markets can only benefit from these exclusive showcases".

Source Export Magazine, No. 6/2011 (September-October 2011)