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Building Ermanno Scervino

Entrepreneur Toni Scervino and designer Ermanno Daelli have built rising Italian luxury label Ermanno Scervino into a business set to generate over €100 million in revenue this year.
Ermanno Scervino A/W 2014 | Source: Nowfashion.com
By
  • Liroy Choufan

BAGNO A RIPOLI, Italy — At present, Milan's fashion scene is largely split between established luxury mega-brands rich in heritage and youthful upstart labels like MSGM. But is there space for an Italian luxury brand with a contemporary spirit?

“We absolutely believe that true luxury brands can still have a contemporary voice,” says entrepreneur Toni Scervino, who co-founded luxury label Ermanno Scervino in 2000 with fashion designer Ermanno Daelli. “We made our debut on the Milan Fashion Week catwalks in 2003. At the outset, our goal was to present a new type of luxury; something authentic but unconventional.”

“The Ermanno Scervino woman is confident in her femininity,” adds Ermanno Scervino, as the creative ‎director of the house (formerly Ermanno Daelli) now calls himself. ‎‎“She is never the victim of the dress she wears.”

The approach appears to be working. With men's and women's ready-to-wear, resort and children's wear collections that emphasise tailoring and contain motifs signaling luxury expertise, such as the inlaying of sparkling stones, lace or ‎fur-lined finishes, Ermanno Scervino is set to generate over €100 million in revenue this year. (The company's latest balance sheet, which was made available to BoF, shows continuous increase in revenues over the past three years, with a turnover of €96 million in 2013). "The market of the women's collection continues to be the majority of the business," says Toni Scervino. "At this stage, the pie is split between the collections at 92 percent for womenswear and 8 percent for men's, but we are seeing significant growth within menswear." With more than 250 employees at its Florence-area headquarters, the brand has over 500 other points of sale around the world, including 42 retail stores and shop-in-shops.

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“It really was [this way] right from the beginning,” says Toni Scervino, when asked about when the company’s breakthrough occured. “Ermanno Scervino was created at a time when almost everyone [in Italy moved their] production abroad. Our intuition was to believe in the true ‘Made in Italy,’ taking over workshops that were struggling in the market at that time. Once we acquired them, we were able to utilise Ermanno’s artistic creativity, without altering the ancient tradition. From this point, the brand’s identity was born.”

Indeed, at a time when many of the best-known luxury houses in the world produce in China and other lower-cost labour markets in Asia, the decision to acquire and base production in local Italian factories and to leverage “Made in Italy” credibility as the company’s primary distinguishing feature was at the heart of the brand’s strategy.

“The real tools of fashion are in Italy,” continues Toni Scervino. “And as long as we have fabrics, manufacturing and creativity, Milan Fashion Week will always remain at the forefront. However, we hope that, with the new government, politics could give more support to the fashion industry, a key for the future of the country’s economy,” he adds.

Importantly, the company has also paid significant attention to developing its presence in markets in the Near East and Far East. “The key markets for us are the Far East (Japan and Korea, foremost) and Russia and Europe,” notes Toni Scervino, who has opened three Ermanno Scervino stores in Moscow alone.

“Russia, Ukraine and Azerbaijan are very important high-growth markets for us, where we are continuing to invest. In November 2013, the first boutique was opened in Baku in the prestigious Four Seasons. Concerning the Gulf, we have the imminent opening of Doha, Qatar, where the market continues to support and grow for us."

"These markets were not affected by the latest financial crisis in the same way as [the West],” Toni Scervino continues. “We observed an increase in sales and a consistent rise in turnover [during the crisis].” In fact, it appears that success in the Near East and Far East is what made the brand’s European expansion possible. “2008 was a year of major retail investments for us, such as the opening of boutiques in Naples and in London, where we opened on three floors in Sloane Street.”

But in the context of a global luxury market that grew only 2 percent in 2013, according to Bain & Company, a consulting firm, what is Toni Scervino’s outlook for the future of the brand?

“The market is constantly changing,” he admits. “However, we believe there will always be an appetite for luxury brands, as people will always look to the best quality possible.” Indeed, Toni Scervino believes the company can grow much beyond €100 million in annual turnover.

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“We are striving to develop the brand with no limitations. We are still to reach certain markets and we have ambitious objectives in terms of the continued growth of turnover,” he says, adding that the brand is currently evaluating options for new store locations in Shanghai and Beijing, expansion that is being fueled completely organically.

“We have received many proposals from other companies looking at investing in our business,” says Toni Scervino, “but for the moment we have refused. Ermanno and I continue to own the entirety of the company.”

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