The Strategist

Valentino's Triumph: How Qatari Sheikhs Taught Europeans Running Business


09/15/2015 - 15:05



Sales of fashion house Valentino in 2015 could reach $ 1 billion. Over the last year, sales increased by 59%, and did triple since 2012. That's when the company was bought by a financial group Mayhoola for Investments, which belongs to the Qatari sheikhs.



yumyumcherry, flickr.com
yumyumcherry, flickr.com
Valentino’s sales totaled $ 530.6 million for the first half of 2015, and it is by 59% more than in the same period last year, according to Wwd.com, citing data from the financial report of the company. Profit before tax increased from $ 64 million to $ 97.1 million.

- These financial results were part of a five-year development plan for the brand, which we worked out in 2012, but it turned out that the company is performing even better than expected, - said General Director of Valentino Stefano Sassi.
According to him, in July and August the growth has been preserved, what means that for the year the company's sales would likely exceed $ 1 billion. This is an impressive result when you consider that in 2012 this figure was three times less.

Valentino’s rapid financial success is directly related to the change of ownership that took place exactly three years ago. The Qatar Financial Group Mayhoola for Investments bought the company from British investment corporation Permira for € 700 million. The owners of Mayhoola for Investments are supposed to be members of the royal family of Qatar. It turns out that the Arab sheikhs, using the example of Valentino, taught Europeans how to run fashion business.

Stefano Sassi said that the main reason for the success - development of the retail network. About $ 40 million were invested in the opening of new stores in 2013. "Retail has been the weakest link of the company. Having our own selling points is not just an obsession. Only through the stores, the philosophy of the brand can be conveyed to client, - said Sassi.
 
As a result, the company opened 40 new stores, including those in Hong Kong, New York and Rome, during the last two years. At the time, stores in countries such as Korea and the United Arab Emirates are now being opened and controlled directly by the investing company, instead of partners. Yet, the major market for Valentino is Europe: it accounts for 40% of sales.

Another reason for the brand’s success - work with wholesale clients. Their number is constantly growing, despite the fact that their choice, according to Sassi, is made "very selectively and carefully" to "protect the exclusivity of the brand."
 
It is significant that the growing sales of all divisions of the fashion house, where accessories take up 55% and ready-made clothes - 40% of the goods manufactured under this brand. This is undoubtedly the merit of today's Valentino creative directors Maria Grazia and Pier Paolo Currie Picciolo.

source: wwd.com




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