Ultimately, the story of the Ferragamos has all the elements of a classic Italian family saga: a fabulous rise to success, tragic misfortune, tension between business and the personal, the tide of world events and transformation. It’s also a tale stretching from Italy at the time of mass emigration to the globalization of the present day.
It stars a self-made Italian genius, the eleventh of fourteen children born to poor farmers; a resolute matriarch; six children; 23 grandchildren; any number of Hollywood princesses; a palace in Florence; two world wars; various global economic crises – and all without the venom and scandals of some of Italy’s other business dynasties.
Today the Ferragamo clan rules an empire with a market capitalization of more than US$5 billion. Listed on the Milan Stock Exchange since 2011, the company produces shoes, bags, dresses, ties, scarves, key chains, perfume, sunglasses, watches and jewelry. It’s also one of the last Italian luxury brands not to have been swallowed up by a foreign luxury goods conglomerate, with about 70 percent still owned by the family.
“For family members like myself, who work for a family business, the greatest challenge is to reconcile everyone’s interests; those of family members and shareholders,” says Ferruccio Ferragamo, the oldest son, who has run the company for 24 years. “If I'm able to give family-run businesses a piece of advice, then it would be to appoint a manager,” says the 71-year-old Ferruccio. “That has worked out very positively for all of us.” And the decision to go public was also to their advantage, he says, “It not only created greater visibility for us but it also imposed some necessary rules for our family.” Heading up a family is something Ferruccio should know about too. He’s not only the chairman of the board and one of six siblings, but also a father of six himself.
When it comes to handing over to the next generation, there’s a ‘moral pact’ among the Ferragamos, as Ferruccio stresses. Of the 23 grandchildren, only three are permitted to join the company. Even then they’ll only be able to join once they’ve finished university studies, obtained a Master’s, worked for two years in a different company, and been tested by other family members working in the business. These selection criteria apply to both this generation and successive ones. This ‘moral pact’ should prevent their sense of family from affecting their judgement and ensure the company remains attractive to outside managers. “It’s an advantage for family-run businesses to have a manager – and I state that as somebody who has managed the company himself for 24 years,” says Ferruccio.
In August 2016, a new CEO, Eraldo Poletto, joined the company and three new young designers were appointed to breathe new life into the business: Fulvio Rigoni, Paul Andrew and Guillaume Meilland. Rigoni most recently worked at Christian Dior and now designs womenswear. Andrew is a young British designer, who in addition to his own label now designs women’s shoes for Ferragamo. Meilland has already made a name for himself at Saint Laurent and Lanvin, and is now responsible for menswear.
Family is important to the Ferragamos – but it’s not everything. The business is always what counts, stresses Ferruccio. “I've made that clear to my children from an early age. I told them, ‘You can do what you like. But what's in the interest of the company is always in the interest of the family too.’ My own children already have their own children now.”
The family focused on diversification early on and invested in other luxury sectors, so that the Ferragamo descendants needn’t worry about a lack of options outside the company. Investments range from vineyards and hotels to shipbuilders and ports. Ferruccio bought an entire Tuscan village, Il Borro, including the castle, and transformed it into a luxury holiday resort. His brother Massimo Ferragamo, 59, is the owner of the Castiglion del Bosco vineyard, which produces prize-winning wines and has accommodation for guests. Sixty-three-year-old Leonardo Ferragamo, a keen sailor, has made his passions for yachting and tourism a reality with shipbuilders Nautor’s Swan and hotel company, the Lungarno Collection.
The wider Ferragamo clan counts almost 100 members today. And the sprightly matriarch, Wanda Ferragamo, now 95 years old, still personally writes everyone’s birthday cards. “There are now six different branches of our family – which all meet up regularly. The oldest grandson is 52 years old. My mother still attends every family reunion even today. And she hosts gatherings for the grandchildren and great-grandchildren, who have to be at least 16 years old to attend,” says Ferruccio.
The Ferragamo saga has its beginnings back in 1898. Salvatore Ferragamo was born in Bonito near Naples, Italy. As a nine-year-old he made his sister a pair of shoes for her confirmation and immediately saw this as his calling. He went on to learn the trade of shoemaker in Naples and, when he was 16, emigrated to Boston, where one of his brothers worked in a shoe factory.
Realizing the potential that lay in the film industry, he persuaded his brother to move to California with him, and in 1919 opened a shoemaker’s workshop in Santa Barbara. His Hollywood Boot Shop followed four years later and he soon counted Greta Garbo, Marlene Dietrich and Gloria Swanson among his customers.
Ferragamo’s shoes brought a new elegance and remarkable comfort. He developed a steel spring to support the arch between the sole and the heel, which made the first open-toe shoes possible – one of 450 inventions that he patented during his lifetime.
Returning to Italy in 1927, he founded his company in Florence and later bought the medieval Palazzo Spini Feroni for his company headquarters. In 1940, he drove with his sister to his home village, where he had made a donation to a poorhouse at the request of the mayor. When he tried to visit the mayor he wasn’t at home, but his daughter, Wanda, was.
Ferragamo, then 42 years old, fell head over heels in love with the 18-year-old Wanda, declaring, ‘I’m going to marry this girl!’. Wanda would later give birth to three sons and three daughters; Ferruccio, Leonardo, Massimo, Fiamma, Giovanna and Fulvia. Wanda led a privileged life until her world was turned upside down by Ferragamo’s unexpected death in 1960 at the age of just 62.
Wanda was 38 years old at the time, and was left alone with a factory and six young children. She didn’t hesitate for a second in continuing her husband’s life’s work. "We were a whole pack that stuck together," she says.
Soon all the children were working in the firm too. “I was 14 years old when my father died – and I know that it was his dream for us all to start working in the company and continue running it. That was clear from the very start," says Ferruccio.
No one was allowed to go to university, the children’s only choice was between working in design, marketing or sales. What’s more, each earned the same salary, which in the beginning was frustrating for the oldest son Ferruccio. However, he soon recognized that his mother’s far-sighted approach helped to keep the family business together.
Today, Wanda is the honorary chairman of the board of the parent company, Salvatore Ferragamo S.p.A.. Ferruccio is chairman and his sister, Giovanna, 74, is his deputy. Fulvia, 67, and Leonardo are also represented, along with grandson Diego Paternò, 47, son of the late Fiamma Ferragamo (died 1998). Massimo, the youngest Ferragamo son, is CEO of Ferragamo USA. Two other grandchildren work in the company. James Ferragamo, 46, is responsible for shoes and leather clothing, and Angelica Visconti, 43, is head of sales for southern Europe.
In the world of luxury brands, Ferragamo is what’s known in Italy as a ‘white fly’, because the family still owns the majority of the company and is famous for its sustainability, not scandals. Ferragamo also takes ‘Made in Italy’, the distinctive nation brand first developed in the 1950s, literally; working with a network of Italian suppliers from Campania, Tuscany and Lombardy. More than 14 factories produce exclusively for Ferragamo.
Despite these long-standing ties, Ferruccio doesn’t see a problem with Italian luxury brands being foreign-owned. “Above all, it’s important that production is kept in Italy,” he says, “That jobs are kept in Italy.” Keeping these jobs in the country would certainly appear to be one way to preserve the Italian high-quality workmanship that the brand is famous for. “We’re attached to Italy. Perhaps it’s also thanks to our family that we’re still one hundred percent ‘Made in Italy’ today,” he says. “One firm has been working for Ferragamo for 58 years.” The fact that Ferragamo's shoes are virtually custom-made fits in well with ‘Made in Italy’, which not only takes into account different feet lengths but also various widths, as Ferruccio emphasizes. There’s also an additional layer of soft leather between the inner and outer sole – a luxury that can be felt at every step.
Today Ferragamo is present in over 90 countries. “The markets are changing. For a time our largest market was America, then Japan and China followed. Today it’s more balanced between Europe, America and Asia,” says Ferruccio. “We always endeavor to get a foothold in a country early on – we want to be the first. We’ve just launched in Vietnam, a very interesting market.” And as far as the markets of the future are concerned, Ferragamo's optimism knows no bounds. “We want to be the number one. We’re not pointing at the moon, we want to be the first ones there,” he says.
After all, grandfather Salvatore embodied the Italian entrepreneurial genius like no other. “If Italy manages to remove the bureaucratic hurdles, to make investments easier and make way for younger generations, then we could see a new boom here,” says Ferruccio. He adds, “Politics are not exactly Italy's strong point. But the Italians are fantastic. They manage to adapt and cope with all the diffculties. And if only some of the laws here in Italy could be changed as well, that would be wonderful. We are confident.”
Recently, two more Ferragamo grandchildren have been born, the newest members of one of the world’s most famous fashion dynasties. Will they follow in the footsteps of their forbearers or forge their own path? Keep watching the House of Ferragamo.
As published in WERTE No. 5, Deutsche Bank Wealth Management's client magazine