With the arrival of Antonio Bortuzzo at the head of Allison late last year, the company has initiated a new development strategy based on a business model that he already tested out as general manager of Marcolin to cope with the sudden loss of the Dolce & Gabbana license, which represented nearly one-half of the group's turnover. In the case of Allison it is a question of triggering a quantum leap in the quantity and quality of the business, to get beyond the €100 million generated in 2006 and 2007 and to maximize profits.
The strategy consists of focusing more precisely and systematically on selective distribution and value-creation for the brands in the group's portfolio, a policy that was already under way when Silvio Vecellio Reane was at Allison's helm. The group now has a very strict strategy dividing brands into three segments ? luxury, fashion and casual ? with their corresponding price positioning, design management and retail targets.
Dunhill, Mercedes, Gianfranco Ferré and John Richmond have all been ranked in the luxury segment and are all produced in the group's own facilities at Volta. For example, the upcoming summer and fall collections of Dunhill eyewear will feature gold-plated frames on a level with Cartier products, retailing at €360 for sunglasses and €320 for frames. The launch coincides with a similar initiative by the licensees of other Dunhill products.
The priority distribution targets will be luxury outlets in the Far East and Russia, with strict selection of the most appropriate stores. In Italy, for example, the number of Dunhill eyewear agents has shrunk from 12 to three. The Mercedes brand, with a very masculine and sober design, is another good example of this strict selection policy. Germany will not be a target market, as Mercedes is not associated with luxury in Germany, whereas Brazil and Russia, where the German brand is still mythical, will be a major focus.
Missoni, Moschino, Iceberg, Bikkembergs and Exté are all grouped in the fashion segment. All produced in Italy with different types of workmanship using quality plastic, their retail price point will be upgraded. The casual segment, with frames retailing at an average of €100 per pair, includes brands such as Benetton and Sisley, mainly produced in China.
On the other hand, Allison's current portfolio of 21 brands is considered to be too broad, and many licenses will not be renewed. The group's distribution structure, with a total of nine subsidiaries worldwide, is also undergoing scrutiny. The aim is to place the emphasis of these sales operations on the optimization of the retail clients' sell-out.
An increasingly strict selection of retail customers should result in fewer accounts, probably involving a reduction in turnover, with 2008 classed as a year of transition. Increases in sales and profits are envisaged in the longer term.
Company executives decline to discuss the company's profitability for the moment. Formerly owned by IT Holding, Allison went through a management buyout in October 2004, backed by an investment fund and led by Vecellio Reale, who is still president of the company. He took Bortuzzo on board as managing director last December.