Berluti turnover reaches €150 million but has yet to turn a profit
While revenue has quintupled to €150 million, getting into the black has been a slower process, the accomplished poker player said in an interview to Bloomberg at the 121-year-old company’s atelier in Paris.
The maker of €7,000 bespoke shoes has been “a little bit late on the profitability issue,” said 38-year-old Arnault. “In the next couple of years it will be profitable.”
His father, LVMH chief Bernard Arnault, said in 2013 that he expected Berluti to be profitable by 2016. The longer his son takes to turn a profit, the weaker his case may be to succeed the 67-year-old billionaire as head of the world’s largest luxury-goods maker. Under Antoine’s watch, LVMH has invested heavily in Berluti, opening large stores in major cities around the world and expanding into ready-to-wear items.
While the push, which included acquiring French tailor Arnys in 2012, was spurred by surging sales of luxury menswear and accessories, demand has cooled amid an industry-wide slowdown. The shift has prompted Kering-owned Gucci to close its dedicated men’s store in Milan and Prada SpA to focus on its women’s line.
The Berluti CEO’s immediate concern is finding a new artistic director to replace Alessandro Sartori who’s leaving to return to work for his former employer Zegna. He’s not alone: Italian tailors Zegna, Brioni and Canali have all parted company with creative executives this year.
Arnault, who is also chairman of cashmere clothier Loro Piana, said he’s interviewing for a replacement for Sartori and hopes to make an appointment before the summer. The new designer will need to inject “some kind of the casualness that I feel we might be lacking a bit right now,” he said, ruling out former Salvatore Ferragamo creative director Massimiliano Giornetti, who quit in March.
Berluti will continue opening stores, though smaller than before, he said. The company is studying opportunities in markets where it’s not present such as Australia. It’s also looking at cities such as Las Vegas, and will seek to expand through pushing into new categories, he said.
“Our ambition is to continue growing, of course,” said Arnault. “It’s clearly an important moment in time for Berluti.”