Italia Independent's growth rates are approaching more normal levels. The first quarter 2014 still reflected the explosive figures of the previous year, with sales up by 60 percent and operating earnings before amortization (Ebitda) up by 70 percent. But spread out over the nine months to Sept. 30, the company's turnover grew by 33 percent to €24.6 million, with a 22 percent increase in Ebitda that kept up its profitability in a range between 17 and 18 percent of sales.
The net financial position remained negative, growing from €6 million at March 30 to €9 million at Sept. 30. Yet, as the company explained in a note, with that sort of growth the company had no choice but to support production by relying more heavily on credit financing. Investments in new foreign subsidiaries and retail development contributed to the financial pressure.
An Italian Independent concept store opened recently in New York, in the heart of the Soho district, with Miami and Los Angeles to follow. All the materials and equipment used are supplied by Essilor, with whom Italia Independent signed a partnership agreement in 2013.
There are now eight concept stores in Italy and five outside the country, including locations like Paris and Courmayeur. Out of the total door count, nine are directly owned and the remaining four are franchises. The brand also has 52 corners in selected multibrand stores.
On the wholesale side of its business, the company is supplying its colorful eyewear to a total of about 4,000 clients, 1,500 in Italy and 2,500 in the rest of the world. Italia Independent's sales strategy privileges direct distribution through direct subsidiaries, which are already up and running in France, the Iberian Peninsula, the U.K. and the U.S. Located in Miami, the U.S. sales subsidiary addresses “early adopters” in the country as well as the numerous Latin American tourists who come into town to do their shopping.
Last July, Italia Independent set up a controlled joint venture in Brazil with Graziano Messana, who acts as a consultant for Italian companies investing in the country through his own company, GM Ventures. Distributors are handling the brand in Japan and in some other countries such as Colombia. An agent was recently recruited for the German market.
The U.K. subsidiary is run by Pierluigi Marinelli, the group's sales director, a former manager of Visibilia and Allison to whom the board looks for help and guidance on the international markets. From his London base, Marinelli also runs two of his own eyewear brands, Marna and Aston Martin, but he has spent a lot of time for Italia Independent, covering 500,000 miles around the world over the past two years.
Andrea Tessitore and Giovanni Acconciagiacono, who have been running the company since its inception in 2006 as chief executive and general manager, respectively, stress that the company is pursuing a longterm strategy with its investments in distribution and retail. With good ideas and a good product, it's not too difficult to get off to a good start and achieve double-digit growth. The problem is maintaining these results, albeit with more modest growth rates, they told us at the last Silmo fair in Paris.
At the outset, the founders were quite clear about the four challenges they were faced with: launching a new product takes time to achieve recognition; the problem of unsold stock is a difficult one for small companies; managing finance, with payment coming in up to 180 days after delivery; and finally the credit crunch, which has been particularly severe in Italy.
The challenges haven't gone away, so the company's managers are constantly brainstorming and keeping themselves up to date, developing new materials, looking at the evolution of international economic trends and investing in market research. One of the aims is to raise the volume of exports. In one year, they have gone up from 40 to 48 percent of sales, and the progress should continue.
Italia Independent spends less than 10 percent of sales on marketing, but the brand gets a lot of visibility at trade shows and through public relations. It relies a lot for its image on partnerships for capsule collections with well-known brands and designers including Vans, Borsalino and Adidas Originals.
The latest partnership is a three-year contract with Hublot, the Swiss manufacturer of high-end timepieces, which is controlled by LVMH. The first products will come out during the first quarter of 2015. Hublot also has partnerships with Ferrari and the Juventus football team. Ferrari belongs to Fiat, and Italian Independent is controlled by Lapo Elkann, whose family controls Fiat.
Elkann and Tessitore got an “Entrepreneur of the Year” award from Ernst & Young last month in the “emerging businesses” category