
All the doubts on the future of Ferragamo
CEO Gobbetti's exit portends that the creative director may soon change as well
February 4th, 2025
Ferragamo and Burberry have two things in common: they are both historic brands, recently entered into a crisis, have hired a young English creative director, and have had Marco Gobbetti as their CEO. However, while the problems of the British brand were not directly related to Gobbetti—whose four years at the helm were marked by the Covid crisis and Brexit—and the manager managed to make a partial turnaround for the brand, Ferragamo is a different story. The now former CEO, who will leave his position on March 6, saw the brand's stock price drop by 65% in three years. At the beginning of 2022, shares were trading at over €22, while today they hover around €7.65. When Gobbetti was about to assume the position, WWD wrote that «it is unlikely that Gobbetti will face the same challenges at Ferragamo as he did at Burberry. With a market capitalization of €3.17 billion, Ferragamo is about a third of Burberry's size and is listed on a smaller and less significant stock exchange than the LSE. The brand's sales source is high-end leather accessories, which are less subject to seasonal trends or dependent on star designers. Moreover, these accessories guarantee higher margins». However, the brand's problems were perhaps underestimated. 2024 was critical for Ferragamo: preliminary revenues were €1.04 billion, down 10.5% compared to the previous year, and in terms of profitability, the brand warned that annual operating profit would hover around €30 million—a significant reduction compared to pre-pandemic levels when profits were about €80 million. As often happens, the CEO's departure raises suspicions that Maximilian Davies, the young and brilliant British designer appointed to lead the brand in 2022, might also soon leave.
Gobbetti's exit marks yet another leadership change at Ferragamo, which has seen four different CEOs in less than a decade. Michele Norsa left the company in 2016 after a decade of leadership, followed by Eraldo Poletto in 2018 and Micaela Le Divelec Lemmi in 2021. This managerial instability has contributed to uncertainty both within the company and among investors, further complicating the brand's revival process. In the meantime, chairman Leonardo Ferragamo will assume executive powers, supported by a transition committee composed of experienced executives, including James Ferragamo, Ernesto Greco, and former CEO Michele Norsa, who has been reinstated. Rumors point to leadership difficulties, attributed to a power struggle between Gobbetti and members of the founding family, whose cohesion and resistance to change have been cited in past years as both an asset and a limitation. As early as 2020, Reuters reported that the majority stake the family held in the brand (estimated between 64% and 70%, depending on the source and year) represented an obstacle due to issues related to management, family structure, and resistance to change—a perspective confirmed by BoF upon the exit of former creative director Paul Andrew in 2021. According to the cited article, the family's complexity and ramification make it difficult to reach a consensus on key strategic decisions, such as selling a minority stake or involving external investors. This structure slows down decision-making processes and prevents timely action in a highly competitive luxury sector.
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Even before the pandemic, the brand showed signs of stagnation, with sales stuck at around €1.4 billion, despite the luxury sector boom during the same period, followed by a 60% year-on-year revenue collapse in the second quarter of 2020. Furthermore, five years ago, Ferragamo's stock was already trading at lower multiples compared to competitors like Moncler and Prada, whose shares have since risen much higher, signaling perceived market weakness. At the same time, the brand's relatively small size makes it unattractive to luxury giants like LVMH or Kering, further complicating the possibility of an acquisition. Investments by private equity, which would need to be substantial, would also require a relinquishment of operational control. Externally, in terms of perception, Ferragamo's issue does not lie so much in its products or creative direction (Maximilian Davis's Hug bag is appreciated by fashion insiders) but in a luxury market weighed down by the double burden of a global luxury spending slowdown, on one hand, and an oversaturated fashion landscape, on the other. Many brand revamps have adopted the modernist-chic aesthetic revived by Daniel Lee during his time at Bottega Veneta, characterized by rich textures, opulent draping, and a ton-sur-ton tendency in the style of Phoebe Philo. Maximilian Davis's talent, in this sense, has been the proverbial cathedral in the desert: his collections are excellent, his shows highly sought-after, but the recognition he receives does not escape the "fashion bubble" to translate into popularity and sales—the issue seems more related to the car than the driver. However, if Ferragamo were to lose its current "driver," doubts about its future would multiply even further—even though it would first be necessary to distinguish symptoms from causes.