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Ferragamo buys remaining shares of Southeast Asian joint venture

Italy’s Salvatore Ferragamo S.p.A. is taking full control of its distribution in Southeast Asia.

The parent company of Salvatore Ferragamo Group has acquired the remaining 20 percent of shares in its SEAK joint venture with Trinity Ltd.’s subsidiaries, giving it 100 percent of the capital from its distribution companies in the region. A number of brands have sought to own their operations in international markets, allowing them to have a stronger handle on their retail efforts.

Ferragamo-fw2016

Under brand ownership

Ferragamo, along with the Trinity Ltd.-owned Ferrinch and Trinity Luxury Brand Holdings Ltd., entered a joint venture in 2012 to distribute its merchandise in South Korea, Malaysia, Singapore, Indonesia and Thailand.

This created the jointly owned companies Ferragamo Korea, Ferragamo Malaysia, Ferragamo Singapore and Ferragamo Thailand. Today, Ferragamo has about 70 mono-brand stores in these countries.

In 2012, Ferragamo bought an additional 30 percent stake in the jv, raising its holdings in the company to 80 percent. Ferragamo’s five-year contract for the jv included a put and call option, which gave it the ability to buy or sell the remaining 20 percent if certain conditions were present.

Ferragamo-fw-2016

Ferragamo’s fall/winter 2016 campaign

Ferragamo has decided to exercise this option, buying the shares for a price based on the net depreciated asset value of the four companies as of Dec. 31, 2016.

Having established a presence in Asian markets, a number of luxury brands are taking back control from their localized partners. Burberry is among the brands that have bought out their partnerships in China to have a firmer grip on their distribution, aiding both their positioning and their profitability.

For emerging markets, having a partner who knows the area can be a boon.

Online retail group Yoox Net-A-Porter is entering a joint venture that aims to become the leading luxury ecommerce player in the Middle East.

This joint venture, in partnership with Mohamed Alabbar’s Symphony Investments, will manage all of YNAP’s multi-brand activities in the region, as well as some of its monobrand ecommerce sites. The Middle East is a fast growing market for luxury, and Yoox Net-A-Porter seeks to benefit from the region’s concentrated population of ultra-wealthy individuals and its digitally savvy residents (see story).

Massimo Ferragamo explains why you should consider exploring the beloved Italian region during the winter months

Massimo Ferragamo

Most travelers to Tuscany visit during the summer and fall, exploring the sunlit countryside and book-ending the trip with a jaunt to Florence and Rome. But for Massimo Ferragamo—son of legendary designer Salvatore and chairman of Ferragamo USA—and his wife, Chiara, there’s something to be said for the winter months in Tuscany, too. The couple are founders of Rosewood Castiglion del Bosco, a historic estate (and UNESCO World Heritage site) in the countryside of Montalcino, whose 17th- and 18th-century farmhouses have been converted into luxury villas available for rent. For the first time ever, the villas will remain open through the winter, allowing guests to experience firsthand the Tuscan season preferred by the Ferragamos. “Around the holidays, Tuscany is an absolutely magical place to be,” says Ferragamo. In case you need convincing, AD asked the native Italian for the best reasons to visit this time of year. Get your passports ready!

“From Montalcino to Montepulciano to Siena, Tuscan towns come alive with charming Christmas markets where guests can shop for artisanal goods while enjoying delicious bites and live music and entertainment,” Ferragamo says.

“Winter is an exciting time for wine in Tuscany,” Ferragamo says. “Many people think the fall harvest is the best time to experience the wine region, but February is quite an exciting time as well; it’s when the new vintage of Brunello di Montalcino is released. Visitors can participate in two events around the new Brunello: the by-invitation-only new-year release Benvenuto Brunello and the Brunello Crossing. The Brunello Crossing is a noncompetitive race, a two-day event taking place on February 11 and 12 in Montalcino and its breathtaking countryside, and includes guided tours of wineries to highlight the connection between sport, territory, wine, and food.”
3. Truffles
“Truffle hunting is another fun activity that is at its best in the winter months,” Ferragamo says. “Taking part in a truffle hunt accompanied by local experts and their highly trained dogs, followed, of course, by delicious tastings is an incredibly unique and fun experience.”

Ferragamo Partners with Italian Revenue Body for IP-Specific Tax Breaks

Ferragamo Partners
Salvatore Ferragamo has taken a pioneering role in terms of participation in Italy’s Patent Box, an optional benefit that reduces taxation for income derived from the direct use or license of intellectual property (“IP”) assets. Enacted in December 2014, the Patent Box is aimed at protecting Italian IP property and boosting the country’s profile as an attractive home for foreign investment and R&D activity.

Italian companies that perform research and development (“R&D”) activities in order to maintain, enhance or develop their IP assets, including copyrights, trademarks, and patents, are eligible for the tax break. Design house Salvatore Ferragamo, which holds an array of Italian and international IP rights – including design patents for handbags, watches and perfume bottles – is one of the first big name fashion brands to pair with the Italian Revenue Agency to form a preliminary agreement in connection with the Patent Box regime. Parties’ specific deal defines the method for calculation of the quota of Ferragamo’s income exempt from income taxes for the purposes of the Patent Box in relation to the direct use of its IP assets.

While the Patent Box program is new to Italy, it follows the recent European trend to assess appealing tax measures in order to attract foreign investments and relocate IP assets. Some European countries – including France, Spain, United Kingdom, Luxembourg, the Netherlands, Belgium and Ireland – have already developed similar systems. Differing from most of them, though, the Italian Patent Box has wider and more specific advantages targeted to the Italian market.

The qualifying intangible assets entitled for the Italian patent box regime specifically include: (1) trademarks; (2) industrial patents, utility models, biotech inventions, patents for plant varieties, semiconductors and topographies; (3) business, commercial, industrial and scientific information and know-how that can be held as secret and which are capable of legal protection; (4) formulae and processes; (5) design models that are legally protected; and (6) software protected by copyright.

Ever the vigilant protector of its IP rights, Ferragamo made headlines in May 2015 when it filed suit against former Los Angeles Rams football quarterback Vince Ferragamo, accusing him of infringing its trademarks by operating a similarly-named winery. According to Ferragamo SpA’s complaint, which was filed in the Southern District of New York, a federal court in Manhattan, Vince Ferragamo is selling wine with the Tenuta di Ferragamo name, and is likely to confuse consumers (the key inquiry in a trademark infringement action) into believing the two are connected or that Ferragamo SpA has endorsed the venture.