Fendi’s Turnaround Plan: More Stores, Products To Build a $500M Brand

Fendi is gunning to become a profitable $500 million fashion house and won’t pin its hopes on a hit handbag, but on a sound business strategy.

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The remarks are said to have ruffled feathers with top brass at LVMH, which owns 94 percent of the house.

Toledano and Burke declined all comment on the article and Lagerfeld’s design contract, which is believed to be good for another two seasons after today’s show.

“We’re not at the moment of contract discussions,” Toledano said.

However, when asked about Lagerfeld’s suitability to continue designing its furs and ready-to-wear, as he has for more than 35 years, Toledano replied: “He’s definitely the right one. Karl knows this house perfectly.”

He went on to assert that LVMH has a strong track record of supporting the creative process and intimated that Lagerfeld’s working conditions at Fendi would be no exception.

“We want everyone in this company to have the means to develop the best products,” Toledano said.

Burke echoed the vote of confidence for rtw and fur going forward. “It’s Karl’s [domain] and we’re sure he will give us fantastic collections,” he said.

Reached late Tuesday night as he was preparing his latest Fendi collection for the runway, Lagerfeld hinted once again at some frustration with Fendi: “Because of Mr. [Bernard] Arnault, I would like Fendi to be a success, but there are things I need [to accomplish that].”

Having delved deeply into the Fendi archives and rich history, Burke boasted how Lagerfeld was the first to take fur into the fashion realm, ripping out the linings of furs more than two decades ago and showing them with jeans. “They were so light, like chiffon or tulle,” he enthused. “Karl is an innovator. He’s just perfect for that.”

At present, leather goods represent about 70 percent of Fendi’s volume, with fur and rtw, about 20 percent, and the balance men’s wear and other minor categories.

Shoes are considered a major opportunity and Fendi recently engaged acclaimed Italian shoe designer Ernesto Esposito to beef up the category. Burke said the first full collection would be shown for fall-winter 2005-2006, but that his fingerprint would be evident on the catwalk this season. Burke said the plan is to have footwear represent at least 10 percent of overall volume.
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