Interesting

Jim, I see a sale going on. Is that right? What's the translation?

 

Not just a sale - more Ferraristores are closing down - after Rome & Fiumicino (and London) now Milan & Florence - in fact my Italian is not good enough but I think it may carry the suggestion of all overseas stores too

 

I read, come by and have coffee?

 

Very confused though since the article is dated 29 July and yet the ad says the sale starts 7 June for 6 weeks?

 

the merchandising is not really profitable.

 

Other reports have suggested that Ferrari makes more profit from brand merchandising than from selling automobiles.

 

That's the conventional wisdom by why kill (another) golden goose?

 

According to the annual report they make more from 'stuff' than from cars.

 

Thats been my thought as well....



PDG

 

so is it possible to read the tea leaves and suggest that Ferrari are concerned its merchandising value is as high as it will get?

 

Any possibility they're trying to get back some 'exclusivity' before they float the brand?

 

I was in Barcelona a few weeks ago and that store had closed as well, the one at the airport strangely enough was still open but had a pretty lousy selection.

 

This news doesn't really surprise Me as I suspect that the rents on these premises was far outweighing the money being made from them.

Ferrari is a massive brand and the merchandise sells well but they're not the sort of products that people buy week in - week out in big numbers from shops. People buying a couple of key-rings here and a T-shirt there is never going to be enough to keep these places running.

I would bet that the amount of merchandise sold on-line absolutely dwarfs the amount sold in these high end shops with their expensive rents, and the advantage with the on-line sales is that you don't need a high rent premises to house your goods, you can use a nice, cheap warehouse.

 

Good point. The brand wont benefit from these high rent/low return shops unless they make room to park the newest models for sale in the storefront windows. Just Google "Ferrari" and "whatever you want" these days. Are these closings perhaps related to the buy-out from Fiat and a streamlining for a more efficient and modern Ferrari?

 

IMO, brand has been tarnished by F1 performance this year. Fourth in constructors, and 6th and 12th for drivers. For Ferrari racing fans, it hasn't been a good year - so why would they go out and buy merchandise?

 

Few Ferrari buyers actually follow F1 and even fewer perceive a globally-recognized luxury brand being tarnished by a single year's racing performance.

Here's the reality of this move: While merchandising was incredibly profitable, RETAIL merchandising has not been -- Thank Dani Bahar for that one. As anyone who's been in those stores could tell you, they were filled with lookiloos and exorbitantly-priced junk, but few buyers. Everyone loves Ferraris but *wearing* their logos appeals only to a very small group and they are not economically-reached through retail in high-end shopping districts.

In this brand consultant's eyes, this has less to do with just brand equity (which certainly was being extracted) but rather a broader, long-coming re-org of a bad merchandising strategy.

2¢.

 

Something else LdM never fixed or focused on. The sales figures probably have been screaming for action for sometime now.

 

No doubt that the stores were something of a vanity project.

 

This doesn't surprise me at all.

IMO the retail stores suck. The merchandise is overpriced garbage. Online is where it's at and the operation costs are significantly less. Having a retail fixture in malls and spread throughout the world is a colossal waste of capital and in my humble opinion degrades the brand.