Mergers are still rare in the still highly fragmented landscape of Italy’s shoe industry, where the founding families continue to cling to their firms through the generations, but there are exceptions, and this one is quite interesting. It shows the combination of a high-end manufacturer of branded licensed children’s footwear with the biggest producer of children’s shoes in Italy, which has been trying to upgrade the quality and the price of its offerings over the last few years.

Owned by members of the Vallasciani family, Dribbling started off as a manufacturer of sports shoes but it quickly concentrate on children’s footwear, collecting the largest possible portfolio of licensed brands including Fiorucci, Flexa, Cacharel, Cavalli and Oilily. Roberto Vallasciani, who effectively ran the company but held only some of the shares, has bought out those of the other family members. He now has full ownership of a company, Vallasciani & Partners, that will concentrate on the production of high-quality children’s shoes, with a daily production rate of around 1,200 pairs.

Dribbling’s licenses have been transferred to a new company, called Felù, that will also develop an international network of franchised multi-brand children’s footwear stores in a professional way, following a retail test that began two years ago at two locations at Jesi and Prato. The first foreign Felù store opened in Brussels in February. Four others are in the pipeline for openings in Milan, Rome, Turin and Naples in September.

Vallasciani has been looking to sourcing less expensive footwear outside the Marche region to complement the bottom of his own product range. Revolving around the concept of “accessible luxury,” Felù stores will feature items from Dribbling’s range of licensed products at different price points along with Melania’s M-Kids line, plus a more basic Felù collection that will soon be added. An additional 25 stores are expected to follow in 2008, including 5-7 units outside Italy, and they will all be in franchising. Sergio Cruciani, an expert in franchising who has helped to develop the networks of Brummel’s and Fornarina’s stores, is acting as a consultant in the project.

Melania owns more than 80 percent of the shares in Felù. The rest is in the hands of Roberto Vallasciani who acts as chief executive of the new company. He is being assisted by a managing director, Roberto Recaneschi, who recently left as commercial director of Siport, one of the biggest and most profitable Italian children’s footwear companies.

For Melania, the new project is the culmination of a process that began in 1997, when Umberto Gironacci succeeded his father at the head of the company, based not far from Dribbling in the Marche region of Italy. While the company continues to manufacture children’s footwear for many different contractors, he has succeeded in raising the proportion of shoes sold under the Melania brand name to about 60 percent of its annual production of about five million pairs.

Melania recently entered the North American market. It has a distributor in Canada who also represents Miss Sixty and other brands of Sixty Group, and it set up a sales subsidiary in the USA last February under the management of a local expert, George Farago. It is expecting sales of 50,000 pairs in the USA for the first year of operation.