Francesco Trapani, chief executive of Bulgari. Source: Supplied
LUXURY conglomerate LVMH is seen as a rapacious lion in the fashion jungle, regularly devouring vulnerable family-owned labels. When its chairman and chief executive, Bernard Arnault, expressed interest in the 174-year-old Hermes, the maker of Birkin bags and silk scarfs raced to the French courts to block the potential takeover. Italian jeweller Bulgari took a very different path, offering itself to the lion king -- for a price.
In March LVMH acquired Bulgari in a share deal that valued the supplier of sparkle to stars such as Sophia Loren, Gina Lollobrigida and Elizabeth Taylor at E3.7 billion ($5bn).
"They are now the controlling shareholder of the company," says Francesco Trapani, chief executive of Bulgari and head of LVMH's watch and jewellery division. "At the same time this family is the second largest shareholder of LVMH because we have exchanged shares and we have bought additional shares."
As the great-grandson of Sotirio Bulgari, the Greek silversmith who fled his homeland and in 1884 opened a jewellery store in Rome, Trapani is entitled to speak for the family. Having controlled Bulgari since 1984 when aged just 27, he is also the broker of the new deal.
"It is a quite interesting new relationship and I see only positive signs up until now," he says. "The company remains independent. LVMH wants to have a portfolio of very strong brands with a strong character so they need to have in power a team of people that are in charge of these brands. They give a lot of freedom to these people.
"The people in charge of different brands are shown more opportunities to grow and make the company and the brand more solid and more competitive."
Potential growth was the fuel for LVMH's appetite for Bulgari and this is what makes Trapani's eyes gleam. He has already pushed his family business into watches, beauty and handbags as well as working with the Marriott hotel group on resorts and hotels in Milan and Bali.
"In the next three years the strategic plan calls for solid growth in all product categories and in most geographical areas, of course greater China being the largest opportunity for growth," he says.
For the first half of 2011 turnover in China increased by almost 60 per cent, contributing to an overall turnover of E548 million.
Read more at The Australian
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