The automaker, Ferrari on Monday announced a fashion collaboration with Giorgio Armani as part of its long-promised strategy to squeeze more value out of the storied company’s allure. CEO of Ferrari Louis Camilleri told analysts that Ferrari aims to earn 10% of earnings before interest and taxes within a decade from three defined brand extension areas such as apparel, entertainment and luxury services.
The Italian Sportscar maker focuses and aims to both increase and retain a greater portion of the 800 million euros which is equivalent to $892 million U.S dollars, in products bearing the prancing horse logo, the CEO said in the recent interview with the media.
Ferrari has been one of the world’s most recognizable brands, but it has only recently translated that into value. Its brand’s value grew from $4 billion in 2014 to $8.3 billion in 2019, according to London-based consultants Finance. It is now seventh on Brand Finance’s list of most valuable luxury brands.
As part of the new strategy from both the companies, Ferrari will focus the use of its brand, reducing licenses by half and eliminating a third of the product categories currently available. Besides the apparel line to be produced in Italy through a long-term deal with Armani, Ferrari will expand its entertainment offerings, which currently comprise theme parks in Abu Dhabi and Barcelona.
The third category, luxury services, will include a new restaurant with Michelin-star chef Massimo Bottura at the Maranello headquarters to open at the end of 2020. Ferrari raised its earnings forecast, citing a robust third-quarter performance including a 9% increase in deliveries.
The company aims to raise it’s full-year forecast for net revenues to 3.7 billion euros, from 3.5 billion euros previously. In the third quarter, earnings before interest, taxes and amortization rose 11% to 311 million euros. Deliveries hit 2,474 vehicles, lifted by the Ferrari Portofino and the 812 Superfast.
They were up by double-digits in Europe, were flat in the Americas and dipped 2% in greater China. Full-year volumes will be in the 10,000-region.
Ferrari plans to unveiled four new models this year, as it needs to renew a product in its segment. This deal will not only lead to stabilization for both the parties but also provide different ventures for both the company as well.
