FERRAGAMO, BULGARI SET JOINT MOVE INTO FRAGRANCE AND COSMETICS
MILAN — Two of luxury fashion’s top international names — Ferragamo and Bulgari — will embark on a joint venture for fragrances and cosmetics under the Ferragamo and Ungaro brands.
Both firms have signed a letter of agreement to create two new companies — Ferragamo Parfums and Ungaro Parfums — that will be jointly owned by the Bulgari and Ferragamo Groups. Ferragamo will grant relevant licenses to the operating companies, while Bulgari Parfums will offer management capabilities under a management service agreement.
The first Ferragamo fragrance is expected to be launched in the second half of 1998, and the Ungaro perfume line, which was acquired by Ferragamo from Chanel Inc. last year, will be the first to be managed by the company, beginning with summer.
In 1994, Ferragamo signed an agreement for its first fragrance with Eurocos Cosmetics, a Germany-based division of Proctor & Gamble. Last May, that deal was terminated with nothing having been produced. Ferragamo said then that there was a failure to “resolve important differences in the direction that each [company] wanted to take.”
Ferruccio Ferragamo, chief executive officer of the Ferragamo Group, might have been alluding to that over the weekend, when he told WWD, “We are very concerned about maintaining our image, and Bulgari understands that. They also have a good handle with distribution.”
Bulgari fragrances are distributed in the U.S. through Chanel.
When Francesco Trapani, ceo of the Bulgari Group, was asked why he wanted to do a Ferragamo scent, he replied: “Because it’s a fantastic name and one of the few big companies that doesn’t have a fragrance yet.”
“The entry in the perfume business is part of our strategic plan aimed at strengthening our brand and developing new businesses,” said Ferragamo in a statement. “The choice of joining forces with Bulgari stems from the identification of a partner who shares our approach to business: top-quality products and service, selective distribution, upper-market positioning. Furthermore, we have been particularly impressed by the results achieved by Bulgari in the perfume business and look forward to creating another success through a very close cooperation with them.”
Bulgari Parfums was founded in Neuchetel, Switzerland, in February 1993. Its fragrances include Eau Parfumee, Cologne au The Vert, for men and women; Bulgari pour Femme; Bulgari pour Homme, and Eau Parfumee Extreme. Volume today is $40 million (63 billion lire) and accounts for 14 percent of the Bulgari Group’s overall business.
Trapani, in a statement, characterized the venture as “an opportunity to work with two very prestigious brands, thus allowing us to increase our strength and critical mass in the perfume market.”
“This is proof of the know-how and credibility that we have acquired in the perfume business over the past four years,” he continued. “The worldwide reputation of the Ferragamo and Ungaro brands allows us to be optimistic about obtaining an interesting return on investment.”