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By admin | September 14 2009
Having grown up in the business, Andrea Perrone was recently named sole CEO of Italian tailor Brioni, taking the reigns in a difficult environment. Elite Traveler President & Editor-in-Chief Douglas Gollan recently caught up with Perrone at his U.S. Headquarters in New York’s Rockefeller Center. The discussion ranged from golf to vacations to his game plan for the increasingly global powerhouse.
ET: You just came up from Dallas from Neiman Marcus for your first conclave [the luxury department store’s annual meeting for key suppliers]. We’re in a challenging time, so maybe tell us a little bit about what the mood was down in Texas.
Andrea Perrone: You know, the business seems to be tough still. But in a certain way we all believe that we reached the bottom. So now, of course we all have to strengthen our relationships, our partnerships and work for the future. That’s why it’s very important for me to be in this market as much as I can. My meeting with Karen Katz [Neiman Marcus CEO] was very interesting. She gave me some precise information on what Neiman Marcus will be in the future, what direction they want to take in the future, the new strategy, etc. It’s important to work closely with them and I’m not talking only about Neiman Marcus. I’m talking about any accounts—even the smallest ones. They need to feel that we are present and that we are trying to support them as much as we can.
ET: On a global basis, talk a little bit about how business is holding up around the world. Are there some markets that are performing better than others?
Andrea Perrone: Yes, for sure. In 2009 the U.S. market is the worst, unfortunately. Europe is holding. The German market, actually the German language market—so Switzerland, Germany and Austria—is probably doing better than other countries like England or even France. Italy is okay but in Italy, we do almost 90 percent of our business with our retail network. Russia is suffering. We started just three years ago a new expansion plan. We are starting to open and increase our presence in markets like Eastern Europe, the Middle East, Far East and Asia. So three years ago, we were focused only in the U.S. and European markets and probably 50 percent of our business used to be the U.S. Today it’s around 30 percent of our total revenue. And even though today the situation is tough across the board, we’ve had the chance to open new accounts. We just entered the Chinese market. We opened our first door in Beijing six months ago, and we already plan to open our second store in Shanghai, I hope, by March 2010.
ET: So you were just recently appointed the Global Chief Executive Officer.
Andrea Perrone: Yes, one month ago.
ET: What was the impetus behind the restructuring?
Andrea Perrone: I joined the board of the company in 2003, though I was basically born in the company. Then in 2006, I became co-CEO of the company, and then one month ago I became sole CEO of the company. So I think it’s a natural process of any company. I have behind me a great Brioni family who understands how tough it is at the moment, and how we must react quickly and make a decision with the team—building a great team is very important I believe for any company. So I think it’s a normal consequence of the evolution of the Brioni Company.
ET: You said you were born into the company. Talk a little about your early memories of growing up as part of Brioni.
Andrea Perrone: When my brother and myself used to finish school before the summer vacation and I was only maybe 12 or 14-years-old, to earn a few bucks, I used to go to the main store in Rome in Via Barberini, where the two founders started the business, and pack or unpack garments or do deliveries to customers with a scooter. And my parents used to take me to the fairs. They used to take me to the meetings.
Then I grew up on the retail side of the business, and when I married at 28-years-old, I spent almost one year working in the factory in Abruzzo, where you have been. That was also a great experience for me to get a 360-degree look at the company. I then worked in the old city; I was here in the United States in 1997 and ‘98 working between the old city office and the retail office.
So, that’s basically a short story about when and how I joined the company.
ET: What about partnerships? Is that something that Brioni has been interested in?
Andrea Perrone: We already did some partnerships in the past. Of course it’s always at the same level as our brand. We did a partnership with a watch company, we did partnerships with champagne companies and with a luxury car company. So it’s something that I believe—especially in this moment—that we should find a way to synergize to better reach our customers and give them a wider kind of service.
Today I think it’s not only about product—it’s also about service. I think service is becoming more and more important. The customer needs to feel confident coming to our stores and having salespeople who can explain to them the materials, the garments, where it comes from, how we made our product. So that knowledge will be one of the great pillars to add to our main important pillars, which are excellence, exclusivity of our products and craftsmanship. These have been and will be our main pillars in the past and in the future. Today, though, in this challenging time we have to add some other pillars like knowledge and service. So to be knowledgeable, to be reliable for a customer is very important.
ET: With customers traveling globally, can you track a New York-based customer when he or she is in Tokyo?
Andrea Perrone: Yes. In our own retail stores I can track my customers. I can track a Brioni customer who is a world traveler and likes to buy Brioni merchandise. So of course sometimes he’s loyal to one store instead of another one, but he also likes to see that—and it’s one of the specific things that we do —we carry different collections around the world. It’s also important to keep the exclusivity and keep the interest of customers visiting another Brioni store who maybe want to find something that he didn’t find in another store.
So we used to be able to track our customers in Europe or in the United States. Now we use the system so we can control and track the same customers if he’s shopping in the United States and if he’s shopping in Europe. All the new operations that we are doing, such as in Asia, are all like joint ventures or franchising.
As much information as we can get about our customers is helpful. For example, I have a very affluent customer in London who wears a size 54 Long United States, so for us it’s 64 Long. He’s a big guy. So the store manager made a specific order in that size for many things. Then he called the customer and told him that he just got a new collection if he wanted to come in and see it. So when a guy like that comes in the store and finds not just one piece that fits him, but many, he’s likely to take everything. So these are the kinds of things that we are doing and I think it’s very important to manage the business in the right way.
ET: Talk a little bit about who the customer is? Brioni suits are priced from maybe $3,000 to about 15 or $20,000?
Andrea Perrone: Yes.
ET: So about how many suits does an average customer buy per year and how often do they come into the store? Do they have a buying cycle?
Andrea Perrone: It’s difficult to define one typical customer. We, on average, have customers who used to come every year and buy three to five suits per year. Of course, then they buy ties and shirts, but let’s measure it by suits—it’s easier. Then we also have customers who are buying one suit every year. Then, of course, we have customers who’ll buy 100 suits per year. We can track only the ones who buy directly in our stores, but we also have customers who shop in Harrods in London or Lane Crawford in Hong Kong.
ET: Talk a little bit about the factories in Penne and also about the employees. What’s the ambience of the operation like?
Andrea Perrone: We are so proud to bring people to our factory because there is sometimes a misunderstanding of what “made in Italy” means and what handmade means. So we are proud to say that Brioni suits are not only 100 percent “made in Italy” but 100 percent made in our own factories. We are almost maniacal in how we produce our suits. Our standards are probably the highest in the market. It can take between 18 and 24 hours to make a single Brioni suit—35 minutes just for a single buttonhole. There are between 7,000 and 15,000 handmade stitches on a jacket. We really custom-make every single piece in the production. That’s also the kind of strategy that we want to apply for the future so the customer really understands the value of what they are buying. I believe that today it’s very important for the wealthy consumer to understand what they are buying so they can really feel the exclusivity of the materials, the great craftsmanship. We have 900 people, 900 tailors involved in our daily production. Before you become one of them, you need to be trained at least four years. So it’s not like working in an assembly line where after one week you can do whatever. And, of course, we are very close to the village. We employ almost all the village, and that’s why, even for me, it’s important to be there Christmastime, Eastertime, to join people and share moments.
ET: You have a tailor school at the factory, right?
Andrea Perrone: Yes, in 1985 we decided to open the tailor school, and I think today more than ever it’s a great tool. We’re training foreign tailors in our school and training master tailors who can go outside Italy to work. For example, the tailor that we have in London comes from Penne; the tailors that we have in Milan come from Penne. We were invited from the Royal College of Art in London for a partnership to train young talented designers in tailoring.
Since we started the partnership two years ago, we are now receiving requests from foreign people all around the world who want to come and be trained by us in tailoring. So the school is not only a vehicle to replace tailors in the production chain when they retire, it’s also a vehicle to train new tailors who are able to travel and work abroad.
ET: A lot of our readers are like yourself and your family—successful owners of privately held or family-oriented businesses. So any suggestions for our readers on the keys to making a family business a success?
Andrea Perrone: Let me say that I believe that if you manage your family in the right way, you will succeed. That’s for me the key point. If you find a way to tie your family together, you already have done more than 50 percent of your job. So that’s the only suggestion I can give you.
ET: When you’re at family gatherings do you all talk business or do you have rules about that?
Andrea Perrone: You know, there are some policies…if I’m with the family, with the kids, with my wife, my mother and the rest, no. But, of course, once in a while when I travel with my father, it’s important to chat with him. However, we already spend probably too many hours talking about that, so it’s very important to separate private life from business life.
ET: So when you’re traveling, any favorite hotels or resorts or places that you would recommend?
Andrea Perrone: Asia probably offers the best hotels and the best services in the world. I like the Mandarin Oriental for sure in Hong Kong; of course the Four Seasons in New York. There are many. I was really impressed with the Oberoi in India—both the New Delhi and the Bombay hotels. The kind of standard you get there is really great.
ET: So it’s now August and obviously that’s vacation time in Italy. Where do you like to go when you go on vacation?
Andrea Perrone: I like to spend vacation with my family. My family-in-law has a beautiful house in Tuscany that’s close to the sea in a village called Capalbio. It’s quite famous. You have the countryside and in ten minutes you have a beautiful sea. So I like to go there. I like to enjoy simple things. I like to play golf. I like to ride a bike. We sometimes take the boat and go to some beautiful islands like Giglio or Elba. But for me, no more than a week. My wife loves to go hiking. But I have only two weeks in the summertime, so I prefer to relax on the beach and enjoy.
ET: So you mentioned golf. What’s your handicap?
Andrea Perrone: My handicap—today it’s 13.
ET: Oh, excellent.
Andrea Perrone: No, not excellent. I haven’t practiced for a while. But, you know, summertime is a good time to practice.
ET: What are some of your favorite golf courses that you’ve played?
Andrea Perrone: There are many. One of the things that’s nice when you travel to Asia, for example, is all the flights back to Europe are late at night. I try to arrange my schedule so that on the last day I’m free in the afternoon. Sometimes I like to go play golf and then I go straight to the airport. Dubai Emirates Golf Club is beautiful. It’s beautiful to play golf in the mountains there. If you go to Asia, if you go to Europe, there you have completely different courses. My favorite in Italy probably is Villa D’Este.
ET: How about the U.S.?
Andrea Perrone: Actually, I never played in the United States. So my dream is to go and play—my father went a few months ago—to Pebble Beach.
ET: So back to business, thinking ahead maybe to the next five to 10 or 15 years, where would you like to see Brioni go?
Andrea Perrone: We always want to be at the same level in terms of quality and image. That’s very important. I cannot forecast five years, 10 years, 15 years, but that’s probably my dream—never compromise the quality. Never compromise the pillars of this company.
ET: Can you keep growing and still keep that personal service where the salesperson still has the relationship you talked about in London?
Andrea Perrone: We are investing a lot of money in this. I think it’s very, very important so I hope so. We spend many, many hours training people—not only our staff. We’re training people from the old city market, we’re training people who are just looking to join the Brioni company.
ET: I guess a relevant question with everything that’s going on is with the economy being in a difficult state, there are almost two schools of thought. One is you see very aggressive sales and discounting and then, on the other hand, people are trying their best not to discount. What do you think?
Andrea Perrone: First of all, Brioni never goes on sale. We never advertise sales. We try to really defend the value of our product. We don’t discount even in this tough time. So I understand that it’s probably a time where the mood of the people, starting around November, was to get 70 percent off, 80 percent off. Still today, they want to have 30 to 50 percent off. But you have to resist and say that for this product I cannot give you 30 percent off or that this product is always regular price. That’s very important. I know that short-term it’s difficult to defend, but in medium long-term, you will get a lot of benefit. So it depends on the strength of the company. I think that we all have to not only defend the revenue but also the margin. The margin is very important and one thing that we really must be focused on.