Family distanced in revamped Ferragamo board amid slumping revenues
The Ferragamo family is expected to streamline the management board of its luxury goods brand as it attempts to rally from the coronavirus impact on its global revenues.
The Italian family’s representative holding company Ferragamo Finanziaria reportedly recruited a head hunting firm to find candidates for the board of directors of Salvatore Ferragamo before the board’s renewal in April. Directors serve a term of up to three years then their office terminates although they can be re-elected.
The new-look board was tipped to be smaller, have more independent directors and strip its chairman of executive powers. The proposed governance shake-up would follow the return in April 2020 of Michele Norsa (pictured below), 72, former non-family chief executive and trusted adviser, as the chairman of an internally appointed executive committee. James Ferragamo, 49, grandson of celebrity shoemaker Salvatore Ferragamo, vacated a seat on the board for Norsa to serve.
The veteran trouble shooter and his five-person committee were granted the authority to monitor, supervise and support initiatives to confront the impact of the Covid-19 crisis on the family business.
Speculation the family would sell part or all of the family business flared in September 2020. Chairman Ferruccio Ferragamo (pictured above), 72, son of the late Salvatore Ferragamo, reportedly informally spoke with investors over divesting a minority stake, which the company denied. Sources told Reuters the group may meet resistance from investors as the family wanted to retain control.
Salvatore’s four surviving children and grandchildren were invested in Milan-listed Finanziaria, which owned 54% of the company. Members of the Ferragamo family own a further 10%.
The board resolved to terminate the executive committee in December 2020. Ferruccio Ferragamo remained chairman with Norsa as vice executive chairman. The revamped board involving independent directors could entice investors to take another look in 2021.
This week, Salvatore Ferragamo Group revealed its revenues dropped an alarming 33% to €916 million ($1.1 billion) in its financial 2020 compared to 2019, despite an upturn in the fourth quarter.
The group blamed the decline on restrictions and lockdowns of commercial activities and international traffic, prompting the closure of its stores, in the first six months of 2020. Progressive improvement in revenue in the second half of the year was stymied by the second wave of the pandemic and the resulting alternating restrictions.
Asia-Pacific was confirmed as the group's top market, but revenue was down 25% in the financial 2020 versus 2019.
Rupert Murdoch ‘far from done’ at News Corp and warns of woke censorship
Billionaire media mogul Rupert Murdoch is ruling out the transfer of control of his media empire while slamming social media and “woke orthodoxy”.
Murdoch senior’s comments were recorded before his youngest son, James Murdoch (pictured), 48, condemned US news media for “toxic politics” that threatened democracy in the wake of the mob attack on Capitol Hill on 6 January.
Murdoch (pictured), 89, recorded a video before Christmas to accept the lifetime achievement award from the UK non-profit Australia Day Foundation. The video was publicly released before Australia Day on 26 January.
The second-generation Melbourne-born newspaperman, who built multimedia News Corp and Fox Corporation empires over six decades, said a lifetime achievement award had an air of finality, almost of closure.
“But I can assure you that there are many goals still to come and challenges to overcome. I’m far from done and the professional journey that began in a smoke-filled Adelaide newsroom is still in motion.”
Murdoch said there was a “wave of censorship” in media that sought to silence conversation, stifle debate and stop individuals and societies from realising their potential.
“This rigidly enforced conformity, aided and abetted by so-called social media is a straightjacket on sensibility. Too many people have fought too hard in too many places for freedom of speech to be suppressed by this awful woke orthodoxy.”
Murdoch’s remarks appeared to put paid to speculation heir apparent Lachlan Murdoch, 49, the eldest of the Murdoch sons as well as co-chairman of News Corp and both executive chairman and chief executive of Fox Corporation, would take full control anytime soon.
James Murdoch was asked by the Financial Times in an interview this month whether his father’s conservative news network Fox News had played a role in the riot. Murdoch junior said media groups had amplified election disinformation, leaving “a substantial portion” of the public believing “a falsehood”.
He said the damage was profound.
“The sacking of the Capitol is proof positive that what we thought was dangerous is indeed very, very much so. Those outlets that propagate lies to their audience have unleashed insidious and uncontrollable forces that will be with us for years. I hope that those people who didn’t think it was that dangerous now understand, and that they stop.”
James Murdoch severed ties to his family business with his resignation from the board of News Corp in 2020, citing “disagreements over editorial content”. In contrast to his father who backed Donald Trump, the estranged next-gen and wife Kathryn Murdoch donated to Joe Biden’s presidential campaign and have supported groups against fake news and climate change.
His Lupa Systems holding company announced this month a new partnership with Uday Shankar, the former chairman and chief executive of Star India, the media conglomerate once part of the Murdoch portfolio, to invest in digital media, education and healthcare delivery in India.
Crisis strategy helps H&M recover from lockdowns
A strong recovery for the Persson family-owned Hennes & Mauritz, the world's second-biggest fashion retailer, at the start of the fourth quarter of 2020 was “significantly slowed” when the second wave of the Covid-19 pandemic again led to restrictions and lockdowns.
The H&M group announced this week its net sales of clothes amounted to SEK 187,031 million ($22.4 million) in the 2020 financial year down by 18% on 2019. Sales were hit by the temporary closure of 80% of the group’s stores. In 2021, H&M planned to open 100 new stores, but close 350.
The crisis strategy the family business adopted covered all parts of the business, including product purchasing, investments, rents, staffing and financing. The group now employed 16,000 fewer staff than a year ago.
Greater emphasis was placed on the digital channels the group already invested in, which partly cushioned the fall of in-store sales. H&M ended its year in profit and in a strong financial position, Helena Helmersson (pictured), non-family chief executive, said.
“We are continuing our initiatives for digital growth, integration of the channels and optimisation of the store portfolio,” Helmersson said.
“Speed and flexibility will be even more important going forward, particularly in the supply chain, to ensure the best customer offering and increase availability in all channels.”
Adam Vettese, analyst at multi-asset investment platform eToro, said, broadly speaking, H&M was in better shape than many of its rivals in the retail sector.
“Considering at one point 80% of its 5,000 stores were closed and fashion spending dived last year as a result of lockdowns, the fact H&M is profitable and has limited the sales slide to 18% is a relatively good performance.”
Vettese said the fast-fashion firm was also sitting on £1.4 billion ($1.9 billion) of cash, an indicator of the strength of its balance sheet, which had been bolstered by cost-cutting earlier in the pandemic.
“H&M is looking remarkably resilient given the circumstances and has demonstrated it can ride out the new wave of lockdowns introduced across Europe.”
The H&M group was founded by the late Erling Persson in Sweden in 1947 after he was inspired by US clothes store volumes and efficiencies. The group includes the brands COS, Monki, Weekday, & Other Stories, H&M HOME and ARKET as well as Afound.
The chairman since 2020 is Karl-Johan Persson (pictured), 45, grandson of Erling, and worth $2.1 billion according to Forbes. The family owns 46.5% of the company and has 74% of voting rights.