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Family reassures staff on commitment when CEO Gobbetti

leaves

next month, source says

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Gobbetti's tenure saw sales drop 10%, shares lose 68% of

value

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Former executives, family members to lead transition

By Claudia Cristoferi and Elisa Anzolin

MILAN, Feb 7 (Reuters) - Ferragamo's founding

family has sought to reassure staff this week that it remains

committed to the luxury group after Monday's surprise news that

CEO Marco Gobbetti was leaving, a person with knowledge of the

matter said.

Italy's Ferragamo, which has been struggling to revitalise

its product offering and sales, has long been seen as a

potential merger and acquisition target.

While publicly ruling out the idea of a sale, the Ferragamo

family has in the past explored the idea of reducing its stake,

sources have previously told Reuters.

For now, the family's focus is on steadying the group after

Gobbetti's departure next month barely three years into his

tenure, according to the source.

A second source close to the matter confirmed the family was

not currently looking at a sale.

During Gobbetti's tenure, sales decreased by roughly 10% and

shares lost around two-thirds of their value, with the lack of

marked improvements stoking tensions between the Ferragamos and

the former Burberry chief, the person and another source said.

A lack of communication between the manager and stakeholders

compounded problems, with the Ferragamos feeling they had little

clarity on the group's turnaround prospects, the two sources

said.

Asked for a comment, Gobbetti and Ferragamo referred to this

week's press release on the CEO's departure, which they said was

mutually agreed.

In 2022, Gobbetti had promised a quick turnaround, vowing to

increase investments, revamp stores and attract younger

customers to double revenue to almost 2.3 billion euros ($2.4

billion) by 2026. Sales dropped 8.2% last year to 1.03 billion

euros.

The Florentine group's market capitalization dwindled to

1.2 billion euros, with Ferragamo's shares underperforming the

broader European luxury sector.

FERRAGAMO'S DECADE-LONG OVERHAUL

Worse hit than others by the COVID-19 pandemic due to

its relatively bigger exposure to China, Ferragamo failed to

take advantage of the rebound driven by pent-up demand, and is

now grappling like the rest of the industry with cooling demand.

"Having only one brand and being focused on a limited number

of categories contributed to exacerbating the crisis", said

Carlo Alberto Carnevale Maffe, a Strategy and Entrepreneurship

professor at SDA Bocconi School of Management.

Ferragamo has been working on a revamp for almost 10 years

during which two other CEOs have left the group.

In 2018 Eraldo Poletto, appointed to succeed long-standing

boss Michele Norsa as CEO, stepped down after less than two

years in the wake of the company saying that it could not stand

by its medium-term targets.

Micaela Le Divelec Lemmi, a former Gucci executive, was

appointed as the group's new CEO a few months later, but lasted

only until 2021.

In every crisis, the family has turned back to trusted former

CEO Michele Norsa for help with the transition. Norsa will be

part of an advisory committee including James Ferragamo and

former general manager Ernesto Greco which will assist Chairman

Leonardo Ferragamo until a new CEO is found.

($1 = 0.9633 euros)