This leading Italian producer of handbags and other leathergoods, created in Bologna in 1927 by Aldo Furlanetto, is seeking to boost its sale of shoes, which it launched a couple of years ago with the fall/winter 2007-08 collection.
In 2008, the company had overall sales of €157 million, up by 5 percent from 2007. However, the average annual growth since 2003 has been 12 percent. Italy represents about 35 percent of sales, the rest of Europe 25 percent, Japan 20 percent, the U.S. 10 percent and Asia 10 percent.
Handbags represent 73 percent of sales, small leathergoods and accessories 20 percent, jewels and watches 5 percent and shoes 2 percent. However, Furla plans to increase the sale of footwear to 5 percent of sales within the next five years.
Furla has been delivering around 12,000-15,000 pairs of shoes per season, but more than 10,000 pairs have already been ordered for the spring/summer 2010 season, and Furla expects to close the sales campaign with 30,000 pairs sold.
All the shoes are produced by third parties, and half are sold through the company’s directly operated stores (DOS) and the remainder through franchisees. Comparatively, sales of handbags and small leathergoods are equally divided among DOS, franchisees and wholesale clients.
Furla’s chief executive, Paolo Fontanelli, the first manager from outside the Furlanetto family to run the company, explained that the development in shoe sales will require building up a wholesale network as well as deploying the collection in the group’s mono-brand stores. Furla has 307 mono-brand shops, of which 145 are directly managed and 162 are in franchising. Shoes are sold in 15 percent of the stores and the aim is to reach 30-40 percent within three to four years.
This includes future stores. The group is especially keen to reinforce its presence in China and Japan, where it has respectively 11 and 62 points of sale. To be able to provide for footwear, stores have to be at least 90 square meters wide, Fontanelli added.
Furla has retail prices varying from about €140-240 for its shoes, with an average price of €180 per pair, compared with €120-450 for handbags, or an average price of around €290.
The company is run conservatively. It is debt-free, and it wants to build up the shoe business gradually. Fontanelli highlighted that the group has not yet invested in communication for the footwear collection and has no plans to create a men’s range.
Among the group’s other development projects are striking a master franchising agreement in India and finding a licensee to develop its jewelry line. The jewelry collection is currently designed in-house.
Furla launched an e-commerce platform about a year ago that it expects will close with sales of about €0.8-0.9 million in 2009. The figure corresponds to the average turnover of one of its stores, the company said.
The platform was launched in Europe in November 2008 and rolled out in the U.S. in January. The service is scheduled to operational in Japan by the end of the year. Shoes are not yet sold online but will be available on the site from spring or summer 2010.
The online site has a selected number of products, and the company was surprised to discover that most of the visitors were male, while the majority of clients frequenting its stores are female. The conversion rate and the average ticket are higher than in the stores.
In the first half of the year, Furla managed to maintain its revenues stable, except in the U.S., and believes it can close 2009 in line with the previous year.
Furla’s chairwoman, Giovanna Furlanetto, described the U.S. market as a «huge outlet» with American brands applying large discounts. The situation in their home market is prompting U.S. brands to develop their business in Europe and Asia, she said.
Furla expects 2010 to be another tough year but believes that in 2011 and 2012, revenue growth could return to previously high levels.