Ferragamo Has Nautor Running Before the Wind
As Leonardo Ferragamo sliced through the waters off Sardinia in a new 45-foot Swan sailboat on Sept. 9, the Italian businessman was enjoying more than just a high-speed race against his friend Francesco Trapani, CEO of luxury jeweler Bulgari. Ferragamo was riding high on his successful turnaround of Finnish boatmaker Nautor, producer of Swans, the Rolls Royces of sailing yachts, which cost from $582,000 to $11 million apiece. "He's doing exactly the right thing at Nautor, evolving a modern boat design but maintaining the beauty and tradition of Swan," says Gucci Group CEO Domenico De Sole, another sailing enthusiast.
Leonardo knows firsthand how to market beautiful, top-quality products. He's the son of Salvatore Ferragamo, whose expert craftsmanship in shoes and clothing propelled a Florentine family business into a leading global luxury brand. Leonardo, 49, who spent his career in his family's businesses, is now successfully applying the Ferragamo touch to another luxury venture, yachts. The new 45-ft. Swan took first place in the 50th Giraglia Rolex Cup race on June 23. And Ferragamo drummed up 10 prospective orders, many for the company's priciest sailboats, at this month's Swan Cup regatta in Sardinia.
Ferragamo used his personal fortune to buy money-losing Nautor in 1998 from a state-owned pulp-and-paper company in Finland for an undisclosed sum. That year, sales were $27 million. Now, a slew of new models and a $12 million investment in a new high-tech shipyard are propelling growth. While the global downturn has left most luxury-goods makers in the doldrums, privately owned Nautor forecasts a 28% increase in sales, to $84 million, this year, and a profit of $5.4 million. "I had a strong conviction that we could improve many things. There had been no new Swan [models] in 10 years," says Ferragamo, an avid sailor who became smitten with the Finnish boats in 1988 and tried to persuade the Finns to build a 45-ft. yacht--a smaller, faster version of the company's traditional sailboats.
Fourteen years later, Nautor Chairman Ferragamo is making that dream a reality. In May, Nautor launched the first 45-ft. Swan, and it's a winner. Breaking with Nautor tradition, Ferragamo decided to make the Swan 45 a single design with limited options so production could be standardized, as with expensive cars. Traditionally, Swan boats are semi-custom-built. While a large model can take up to eight months to deliver, Nautor turns out a Swan 45 in only 14 days. Nautor, which will make 40 of its classic semi-custom yachts this year, has already sold 30 of the $582,000 Swan 45s and has 10 more on order.
The Swan 45 isn't the only new ship in the catalog. Nautor now boasts nine new models, offering for the first time super-yachts 100 ft. or larger. The winner of the first Whitbread around-the-world race in 1974, Nautor enjoys a legendary reputation for quality. Yet its 40-year-old boatyard in Peetersaari, Finland, 400 miles north of Helsinki, had been losing ground to a new class of super-big yachts and rival boats built with new materials. "The extra big boats filled an important void in our offering," says Ferragamo, who owns an 82-footer christened Solleone. For owners who want lighter, faster boats, Swan now offers fiberglass hulls in addition to its traditional all-teak construction.
Ferragamo's real coup may well be the luxury-goods marketing savvy he is injecting into Nautor and the Swan brand. By revitalizing the annual Nautor's Swan Cup and other races for some 1,900 owners, Ferragamo infused Swan with new excitement and cachet. The September regatta in Sardinia drew a fleet of some 120 Swan owners to the resort of Porto Cervo, including senior execs from Deutsche Bank, Credit Suisse First Boston, and UBS. "We are developing a new [racing] class with the 45," says Ferragamo, who is awaiting delivery of his own Swan 45 in January. Now that's an executive who believes in his product.
By Gail Edmondson in Florence