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March 26, 2014 9:05 pm
A big trend in recent years in fine jewellery has been consolidation, as conglomerates have bought up independent brands.
Pomellato, the Milanese jeweller behind the cult Nudo and M’ama non M’ama stacking rings, was bought last April by Kering, the French luxury goods group behind Italian brands Gucci and Bottega Veneta, after Kering fought off competition from Prada, the Italian fashion house, and the Italian state investment fund.
Such deals are good for conglomerates looking to bolster their high luxury offerings, but what is in them for the independents? Andrea Morante, Pomellato’s chief executive, says the answer is simple.
What Pomellato needed was more funding firepower to better exploit its potential in far-flung markets outside Europe.
“It is all about opportunities that as an independent brand owned by a family with limited capital resources are just more difficult,” he says.
While Kering has never disclosed the size of the deal, analysts at Kepler Cheuvreux estimate Pomellato had an enterprise value of €270m–€300m ($372m–$413m) at the time of the transaction. Pomellato posted revenues of €146m in 2012.
Mr Morante, in an interview at Pomellato offices in Milan, says Kering came top of the list of buyers for Pomellato’s founder, Pino Rabolini, because the conglomerate founded in 1963 by French entrepreneur Francois Pinault understood that little needed to be changed.
“Mr Rabolini wanted to make sure that the company would be handed over in the best way with an element of strong continuity that was easy for Kering to understand and respect,” Mr Morante says.
Thus, Pomellato’s management has remained unchanged including Mr Morante, a seasoned luxury goods executive who was previously at Gucci as well being as an experienced luxury goods banker at Credit Suisse.
But the brand has been able to lean on Kering’s expertise in property to gain access to prime new locations in Europe and Asia. It is also able to tap into an extensive marketing and media buying team.
“If you are on your own you can do something but not all. But if you are part of a bigger group you have better market knowledge and better capital,” Mr Morante says.
Kering’s financial backing has supported its plans to venture into new areas. Along with Rouge Passion, Pomellato recently launched three perfumes and most notably a range of watches in collaboration with independent Swiss watches group Parmigiani Fleurier.
Mr Morante points out that Pomellato brings an accessibility in fast-growing branded jewellery to the Kering brand stable in watches and jewellery, where it already has stately brands Boucheron – the first jeweller to have a shop on Place Vendôme – and Girard Perregaux.
Pomellato is known for its independent approach. Last year it launched the Rouge Passion ring. The design echoed the Italian jeweller’s rings for everyday wear made of rose gold and precious stones. But it was surprisingly different in composition: its stones were synthetic.
The step was a typical departure by Pomellato, which is among Europe’s top jewellery brands by sales after leaders such as Cartier, Chopard, Bulgari and Tiffany. But it is the youngest by as much as a century. And since its founding in 1967 it has built a following as a high-end jeweller that dares to be different.
“Coming up with a synthetic stone is pretty daring. No brand that is over 100 years old could do that,” says Andrea Morante, Pomellato’s chief executive. He points out that Rouge Passion is now one of Pomellato’s top five-selling lines.
It emerged as a major jewellery brand in Milan in the 1980s. As Giorgio Armani was breaking the fashion mould by designing relaxed trouser suits for newly liberated women in the workplace, Mr Rabolini drew from that trend by creating coloured, stackable everyday pieces of jewellery for those women to wear.
“Pino Rabolini made a simple observation. He said jewellery cannot be something that you buy on a special occasion, or that you wear on a special occasion, it has to be something for everyday,” says Mr Morante. The brand taps rising demand for statement jewellery. And the premise behind Pomellato’s founding remains an alluring proposition as women become a greater consumer force.
Today, as much as three-quarters of Pomellato’s sales are to women. Nearly half its sales are made to women who are shopping for themselves, with the remainder by women “with a man as a cosignatory” as Mr Morante puts it. It is an usually high proportion for the fine jewellery industry where men shopping for women tend to make up the biggest category of customers.
Three quarters of Pomellato’s turnover comes from repeat customers. Its Nudo and M’ama, non M’ama rings are especially favourite buys.
Mr Morante say this plays to Pomellato’s strengths. “More women are independent and more women are buying on their own, and women are becoming more relevant in the choice men are making about buying jewellery.
Now it is part of Kering, Pomellato’s sales figures are undisclosed but Mr Morante says: “That we have historically been particularly attentive to women’s taste is proving very positive.”
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