At the end of May 2023, the global private equity player Permira acquired the majority shares of the Florence Group, the first integrated industrial hub in Italy with around thirty manufacturing excellences in the Luxury chain, founded in 2020 and reaching a turnover of around 600 million in 2022 of Euro. We spoke with Attila Kiss, CEO of Gruppo Florence right from the start, who illustrated the present and future projects of the manufacturing giant.
Mr. Kiss, what is the idea behind the founding of Gruppo Florence? Would you have imagined getting to these results?
«We started from the basic belief that Italy is the favorite country for luxury brands to develop and produce, where there is excellence in all sectors, whether we are talking about clothing, footwear or leather goods. In the meantime, however, brands have evolved and, in addition to the product, now have needs that were previously considered secondary. Individual Italian suppliers therefore begin to struggle behind these requests. Know-how is no longer enough: there is a need to develop production processes, shorten lead times, obtain certifications for environmental requirements and so on. Then there is the primary issue of training and scarcity in the generational turnover of the workforce. So, having analyzed these critical issues, we thought that the aggregation of several companies with the addition of a certain level of managerial skills could best respond to all these needs. Had we imagined growing up like this?
Sure, we wanted to reach a certain size to be able to make investments but we didn't know how long it would take. We needed to reach a critical mass to better organize ourselves and create synergy between the companies themselves. Having reached this level of development in two and a half years allows us to think big with the aim of providing the customer with services that have real added value».
What was the path that brought you up to the current dimension?
«We started with the first three knitwear companies that met and shared the project believing in us (Giuntini, Ciemmeci and Mely's Maglieria - nda) supported by three important investors, with great expertise in the SME sector with different peculiarities between itself: Italmobiliare with great experience in ESG, VAM Investments with Francesco Trapani, a long-time entrepreneur who knows Luxury and, finally, the Italian Investment Fund which has placed a strategic stamp on the project for the enhancement of the supply chain. In the Florence Group each entrepreneur continues to manage the original company but in parallel we offer a series of useful tools for companies to strengthen them and be able to manage the new challenges of the market».
How did you manage to bring together the many personalities, individualists by definition, of your entrepreneurs? How does the scouting of possible new companies to be merged take place?
«The coexistence of these personalities is the crucial point of our project. From the outset, we have created a governance structure in which all entrepreneurs hand over 100% control of their company to the Group and, at the same time, acquire a stake in the Florence Group, becoming minority shareholders. It is a characteristic that distinguishes us from any other aggregation initiative that I see around: the fact of sharing the interest of the entrepreneurs was important because they became partners with each other. We were lucky that our very first entrepreneurs immediately put a lot of faith in the project with courage and foresight. Investors have also joined them, therefore an incredible enthusiasm has also been created in internal relations, which drags everyone along, including newcomers. However, this fervor alone is not enough, so we have included a managerial team of people from the fashion sector who enrich us with important skills. For the scouting of companies we make use of the collaboration of various advisors. We specialize in bringing together realities that are already working very well. We are not interested in saving unhealthy companies. The profiles we are looking for must have a customer portfolio and a type of product that fits strategically into our services. Today many have understood our industrial project, so there are many companies that would like to join the Group».
So we come to the entry of Permira: why a new majority shareholder?
«In general, a financial partner provides the support to grow further and to be able to seize important opportunities. Finance is essential to accompany an industrial strategy. And we are ambitious: we have so much to offer brands with services that we are still developing and we have opened the footwear and leather goods business units which are well advanced, but need to grow. There are always new challenges and we want to be at the forefront. A partner like Permira strengthens us considerably and makes use of a team with extensive experience in the sector, just think of important operations such as those of Valentino, Hugo Boss and Golden Goose. This transition was not planned, a marriage born perhaps ahead of our plans but which gives us great added value in terms of resources, knowledge and professionalism".
Last but not least, what are Gruppo Florence's projects in the field of training?
«Training, as mentioned, is a primary topic for us, so we have developed several projects. One is called "ACADEMIA Diffusa" which directly concerns our companies. These are specialized intensive courses lasting about four months that take place within our facilities, open to all and aimed at recruitment. Another project, more wide-ranging and ambitious, is "Mani della Moda" and directly involves professional high schools. Each company in the Florence Group plans to adopt one or more schools with targeted investments to provide them with tools, materials and remunerated internships for graduates. Currently we have adopted twelve schools but our goal is to reach at least fifty institutes throughout the national territory. The investments made are preparatory to the widespread dissemination of the fashion professions by the professional schools themselves within the middle schools of their provinces and thus also being able to reach the very young. Finally, we have the training plan that concerns the second generation of our companies which are all family-run. For us, where possible, managing the generational handover of these realities and ensuring continuity is a value for everyone, including employees. We have the task of helping second generations to train, not only with their parents, but also with an academic path or through transversal work experiences with other companies of the Florence Group».
