Fashioning Success: Etro CEO Fabrizio Cardinali On Revitalizing The Iconic Italian Brand Cardinali was appointed the CEO of Etro in 2021, a little while after a majority stake in the company was acquired by American multinational investment firm L Catterton, with the deal reportedly valuing the brand at about EUR500 million.
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When I met Etro CEO Fabrizio Cardinali at the Italian luxury fashion house's newly revamped boutique in The Dubai Mall in February this year, it became quickly apparent to me that I was in the presence of a man who truly enjoyed what he did for work.
Now, I found this noteworthy because, well, Cardinali has been in this game for a long while now- you see, he has more than 25 years of experience behind him, and his career trajectory has seen him play key leadership roles at globally renowned brands like Dolce & Gabbana, Alfred Dunhill, Lancel, Diesel, and Levi Strauss & Co. And yet, when Cardinali talked to me about how he's been approaching his role at the helm of Etro, there was no mistaking the excitement with which he spoke about his work, and one couldn't help but be impressed by the passion that fueled him. "I do what I do, because it's what I enjoy: business!" he exclaims. "I work hard, and I'm a bit of a workaholic, but that's because I like it, I enjoy it… And when I won't enjoy it, I will hand it over to someone else." He pauses for a moment here, and then adds, "Maybe I'll open an ice-cream store then!"
While I'd certainly wish Cardinali all the best should he ever launch an ice-cream business, it's safe to say that the Italian executive is, for the time being at least, content with running the show at Etro. He was appointed the CEO of Etro in 2021, a little while after a majority stake in the company was acquired by American multinational investment firm L Catterton (which bills itself "as the largest and most experienced consumer-focused private equity group in the world"), with the deal reportedly valuing the brand at about EUR500 million (Reuters). Etro had, until then, been owned by its founder Gerolamo Etro and his family, with the business operating in a number of diversified product categories, including women's and men's fashion, accessories, beauty and fragrances, and home goods. Having been founded as a textile company in Milan in 1968, Etro has since gone on to become an iconic fashion house in its own right, with it becoming particularly known for, as a L Catterton statement put it, "its iconic paisley motif, and bold patterns inspired by travel."
An image from the Etro Spring Summer 2024 advertising campaign. Image courtesy Etro.
But while the Italian brand had a lot going for it already, it also had, according to Cardinali (who was part of the team that carried out Etro's takeover), the potential to be taken to a whole new level. "It's not that easy to find a jewel, a diamond, let's say, that's still a bit unpolished," he explains. "Especially when considering what has happened in the last 15 years, with all the big brands doing really crazy, beautiful stuff. And so, after finding a very genuine, Italian, spectacular diamond that was a bit unpolished, but still well-known -I don't want to say everywhere, but in key countries, for sure- all over the world, that presented as a unique selling proposition for me. And so, when I saw this opportunity, I said, let's go for it. Because here, we have a chance to polish a diamond- we have to bring the diamond to where the diamond deserves to be."
Cardinali's words here behooves one to revisit his career trajectory and thus the time he has spent working with, well, "diamonds." He had, after all, come to Etro from Dolce & Gabbana, where he had played several roles, with the last of them being its COO. Plus, his nearly 13-year tenure at Dolce & Gabbana was interspersed with five years at Switzerland-based Richemont, where he was the CEO of several luxury fashion brands of the group, such as Dunhill and Lancel. But if you were to now think that there's a tried-and-tested playbook that Cardinali had made use of in his previous roles that he's since brought to Etro, he's quick to disprove you of that notion.
"It is very challenging to replicate success by looking at only doing what you did in the past," he points out. "The world is developing so fast, and the way to become successful is changing constantly. For instance, a long time ago, we had to pay a lot of attention to the B2B segment of a business. But today, in the last 10 years, even 15, it has become all about the B2C part, and having the customer at the center of everything that we're doing… Yes, experience, it's always helpful. It gives you a foundation. But in life, you learn more through mistakes than through success. Success doesn't teach you a lot. Anybody can enjoy success. It is a hundred times more difficult to go through a mistake, a failure, and then coming back, fixing what went wrong, and then going up. It's just another story- and that's what makes your skin a lot tougher."
The new Etro boutique at The Dubai Mall. Image courtesy Etro.
Tough skin certainly comes with the work that Cardinali has been doing at Etro for over two years now. In 2022, at the Milano Fashion Global Summit, Cardinali famously announced Etro's ambitious plan to reach EUR500 million in sales in five years' time. "It's a challenge but achievable, thanks to the support of the new shareholders, the strength of the brand, and the strategic plan put into action," he had said then, with the company having gone through what was called "a profound organizational transformation" by FashionNetwork.com. The same report noted that Etro's turnover in 2022 had increased to EUR277 million (a 17% rise from the previous year), though it still incurred a loss of EUR23.6 million. Then, in November 2023, Etro secured a EUR15 million capital injection from L Catterton, which, once again, can be seen as a nod to its future prospects.
But according to Cardinali, the success of the brand will be completely dependent on a clear understanding of its connection with consumers. Here's how Cardinali puts it: "Am I building Etro to be a pure luxury player? The reply is no. But is it a luxury brand? Yes. So, is it affordable luxury? Yes. Why? Because I'm working very, very hard to keep the pricing 30%-35% less expensive compared to my competitors and the big guys. And why am I doing this? Because that's my competitive advantage. I'm keeping in mind the value for money I give my consumers, who I respect massively- everything's about the consumer. After all, the brand is successful if you come over here, you buy our products, you enjoy our products, you get close to our products, and you want to repeat your experience. You want to come back, because you were happy. That's when the brand is successful. Otherwise, it is not successful."
Aiding Cardinali on his mission to transform Etro is its Creative Director, Marco De Vincenzo, with the duo working closely together to oversee the brand's evolution. Cardinali describes his relationship with De Vincenzo to be like that of a couple, whereby, as he put it, "I have my responsibilities, and he has his responsibilities. But, of course, we need to have the same vision. And the way that I run the company, we keep challenging each other, because it's the only way to keep the bar very high, and to never celebrate too long and too much about success. If you would ask me which is the best collection we've done, or, say, the best bag we've made, my reply would be the next one."
And while Cardinali wouldn't like us to dwell too long on the wins that Etro has had, it's still worth taking a peek at the reviews and reception it has secured in the recent past- for instance, Savoir Flair declared De Vincenzo's Spring/Summer 2024 line for women to be "the kind of collection that begs to be seen in person, to be touched, to be worn." Consider also the cult hit that was Etro's Vela bag, which, by the way, was De Vincenzo's first bag for the house. And while Etro's womenswear has known to be bringing in business for the brand for a good while, Cardinali says that he foresees its men's units to be just as impactful in the next three years. Combine all of its offerings (think kids wear, perfumes, etc.) together, and Cardinali believes that Etro has the ability to become a truly timeless lifestyle brand. "I think that Etro is a brand that, in the long run, can be over a EUR1 billion cap," he says. "This can take more than 10 years, but all the ingredients for it to happen are there, and they are strong."
Related: Marketing To A High-End Consumer, Using The Luxury Strategy
A scene from the Etro Spring Summer 2024 show. Image courtesy Etro.
Growth is thus clearly on the agenda for Cardinali, and he's taking on a rather entrepreneurial mindset when it comes to leading Etro to where he wishes to see it go. Indeed, he's adopting an experimental mindset for what he has set out to do- and he's very eager to flip the status quo. "When things are going well, that's when you have to change everything," he explains. "The people around you will probably say, hello, are you crazy or what? But if you're a strong leader, that's what you have to do. You have to make changes when everything is going well. Because if you are waiting until things don't work, then you're too late. Obviously, there's a lot of risk when do things like this, but this life is about risk. If you don't want to have any risk at all, do something else!"
And while Cardinali is emphatic about the need for a leadership mindset like this to realize success, he is also clear that he won't be able to go at it alone. "Amazing people who work together, who are extremely passionate, who believe in what we are doing, while also having fun- this is the magic, and this will never change," he says. "By having people who are super passionate, and who work together to make the dream come true, that's the magic ingredient. A great team can make a small company a major company. A bad team can create problems in the best company in the world."
It is a similar ethos that Cardinali reiterates when I ask him for his advice for entrepreneurs who might be just starting out in the luxury realm. "You need to have a great product, whatever it may be- you do not need many, but you do need something great," he declares. "Second, you need to have storytelling as strong as the product, maybe even stronger. Because you move consumers more with the storytelling than the product… And point number three, this is the most important one- do something that you really love. Don't do it just for the sake of money, because if you do it for that, it won't last."
