Bally accelerates its entry into the $1 billion club

Source: Fashion Headlines

After holding the main market of China, Bally is continuing to develop new performance growth points.

Swiss luxury brand Bally recently announced that last year’s profit hit a new high in nearly 10 years, but did not release specific figures, and CEO Frederic de Narp said that it was mainly driven by the brand’s sales growth in the United States and Japan. He expects Bally’s U.S. sales to grow more than 20 percent year-over-year this year, far more than last year’s 14 percent.

In fact, Bally’s goal is to achieve balanced development in all regions of the world. Frédéric de Narp said in an interview with Fashion Headlines that these countries, including China, the United States and Japan, are the 5 engines of Bally, and maintaining a balance is conducive to better global expansion, but at present, Asian markets, including China and Japan, are still Bally’s largest home turf.

In February this year, Shandong Ruyi Holding Group completed the acquisition of a majority stake in Bally for about US$700 million, and Bally’s former parent company, JAB Group, retained only a minority stake. Ruyi Holdings emphasised that it will maintain Bally’s heritage and unique identity, retain its headquarters in Caslano, Switzerland, and continue to operate its marketing, design and sales teams through the brand’s showcase in Milan, Italy.

Some analysts said that Ruyi Holdings’ independent operation mode of maintaining the acquired brand can be traced back to its acquisition of SMCP Group, but more importantly, Bally’s rejuvenation strategy in recent years is gradually taking effect.

Talking about the details of the acquisition of Bally, Qiu Yafu, chairman of Ruyi Holdings, said that when he came to Bally’s office, the brand’s creative director showed him the latest vintage athleisure shoes, which are very different from Bally’s traditional regular leather shoes, which said that such a pair of shoes can be bought online in a day after being worn by Chinese stars.

This may explain why Bally invited Chinese actress Tang Yan to become the first Asia-Pacific ambassador last year, and on the day of the news, Bally’s related Weibo retweets exceeded 180,000 that day, a record high, and received more than 5,000 comments and likes. In January this year, Bally and Tang Yan launched a candy bag limited to 99 pieces in the WeChat limited-time store, reinterpreting its popular handbag Suzy with rich colors such as cherry blossom pink and ocean blue.

In terms of digitalization, after accumulating enough experience in 2009 through Yoox, Bally made it clear when it launched the Chinese version of its official website in June last year that it would not choose to cooperate with local e-commerce companies such as Alibaba, hoping to control e-commerce channels by itself so that consumers can buy quality-assured products.

When a series of innovations were questioned as contrary to Bally’s history, Frédéric de Narp argued that Bally had been a constant break from the start, leading in many ways, internationalizing a hundred years ahead of other brands.

From e-commerce to co-branding, this 167-year-old traditional leather goods brand seems to have gradually returned to the right track. However, it is worth noting that three years ago, Bally was still trapped in a business crisis caused by exchange rate fluctuations, and the brand once relied on a 25% price cut on women’s handbags to maintain its performance on the verge of loss.

Some analysts pointed out that the unclear product positioning and frequent personnel changes for a long time are important reasons that hinder the development of Bally.

Founded in Switzerland in 1851, Bally’s products include luxury shoes, belts, bags, wallets and clothing, and the brand has changed hands five times in just four decades. After being acquired by Texas Pacific Group, a U.S. private equity firm in 1999, Bally’s assortment expanded from footwear to ready-to-wear, accessories and handbags.

Texas Pacific Group hired former Salvatore Ferragamo marketing director Scott Fellows as creative director for Bally in 1999 and completed the complete luxury brand operating structure from store renovation to fashion week creative team building. Bally began to return to profitability in 2004 and grew in double-digit growth over the next three years, reaching $500 million in sales in 2007.

In 2008, however, JAB Group acquired all of Bally’s shares for CHF 700 million for about US$650 million, and Bally’s growth stalled under the impact of the global economic crisis. In 2013, Frédéric de Narp, who had worked for Cartier for 18 years, became the brand’s global CEO, and he subsequently appointed Pablo Coppola, a designer who had worked for Dior, Tom Ford and Céline, as creative director.

Pablo Coppola’s significance to Bally can be compared to Alessandro Michele’s innovation of Gucci, which opened a joint series with graffiti artist André Saraiva and musician Swizz Beatz Kauai, and used the explosive idea to turn Bally’s Sommet handbag into a popular it bag.

Pictured is Pablo Coppola, former creative director of Bally

Frédéric de Narp said in an interview that in the past 20 years, Bally has not figured out an important issue, Bally’s entry-level price is more, it is not a top luxury brand but positioned in the middle and high-end.

This may explain why Bally’s successive creative directors, including Brian Atwood, Michael Herz and Graeme Fidler, have tried to combine American casual with Bally’s simple, classic style, but have struggled. Pablo Coppola’s bold approach to rejuvenation proves that Bally has a wider consumer base and greater plasticity.

Although Pablo Coppola left last year, Bally clearly has a clear vision of what the future holds. “Today’s post-90s and post-00s consumers account for 27% of the luxury industry, and this proportion will expand to 40% in the next decade,” Frédéricde Narp further pointed out. ”

In addition, under the trend of cooling footwear industry, Bally’s diversified revenue strategy is also an important factor in maintaining growth in recent years. According to the data, from 2013 to 2017, the proportion of Bally’s products has increased from 28% to 37%, and 53% of the product revenue composition is currently from accessories, 44% from shoes and ready-to-wear, and the number of products will also be reduced by 40% to 50%.

The rise and fall of Bally shows how established footwear has evolved into a rich range of luxury brands and the process of finding their own identity. Some insiders pointed out that compared with Fosun’s acquisition of Lanvin, Ruyi Holdings acquired a brand that is making money.

Frédéricde Narp has made it clear that Bally’s ambition, supplemented by the resources of Ruyi Holdings, is to accelerate its goal of reaching the $1 billion club in annual sales.

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