# Ferragamo CEO Aiming To Double Revenues



## bagnut1

From WWD 5/11/22:

CEO Marco Gobbetti laid out his plans for the growth of the company.


1 A Sofia bag by Salvatore Ferragamo.
BY LUISA ZARGANI



MILAN — “Opportunity” was one of the recurring words Marco Gobbetti, chief executive officer and general manager of Salvatore Ferragamo, used Tuesday evening during a conference call with analysts to comment on the luxury company’s first quarter results.
So much opportunity does he see for the brand that Gobbetti laid out an ambitious plan that sees Ferragamo aiming to double revenues in four to five years and to double marketing and communication spending as a percentage of revenues beginning in 2023. This will lead to a cumulative investment of 400 million euros in the 2023-to-2026 period focused on store renovations, technology and supply chain.
Marketing is seen to represent 10 percent of sales by the end of the plan.
The investments will all be self-financed through the existing cash position and cash flow generation.
“The company has under-invested in the past few years, and it will be key to massively step up our investments,” said Gobbetti. “The boldness of the plan [lies in the fact that] we don’t have to rebuild the brand but accelerate its growth.”
Product is at the heart of Gobbetti’s strategy, as is reaching out to a younger consumer.
Responding to an analyst who pointed out that rejuvenating the brand has been in the works for a while, Gobbetti touted the strength of its new creative director, Maximilian Davis, who joined in March.
His appointment was a key element in the brand’s turnaround for Gobbetti, who tapped the Trinidadian British fashion designer shortly after the CEO’s arrival in January from Burberry.
“He is very bright, and, while young, more mature than his age,” said Gobbetti of Davis. “He has the remarkable capacity to define a very specific style and visual identity in a very short time, as he has done for his own brand [which has been put on hold]. He is very elegant, starting from tailoring, but at the same time his designs are grounded and for daily use and more casual, more fashion.



He has, on his own and with very little means, stirred interest in celebrities. And he has a great human approach, everyone has been really enchanted to work with him. He is full of ideas and super excited.”
Does this mean the product will be more radical, wondered one analyst? ”Our main objective is to reach a younger customer with a product that adapts to their style, so if that means being more radical yes,” said Gobbetti, adding that women customers will also be a strong focus. Davis’ first show for the brand will be staged in September.
The designer has made “good progress on structuring the collection and by end of the year you will see the results,” continued the executive. Davis “has a new strong team in place. I am honestly very confident the brand will be more relevant to respond to trends. In terms of casualization not much has been done before.”
Davis has the tools to communicate with a younger consumer, “create an emotional connection, which has been lacking.
We may have been a little distant in the past. Emotions are very important and Maximilian plays an important role in this.”
An upscale digital presence, “creating heat and visibility” and improving customer experience, are also priorities for the brand, believes Gobbetti.
Despite the impact of the COVID-19 pandemic, the war in Ukraine and the inflationary pressure, Gobbetti touted the performance of the Florence-based company in the first three months of the year, as Ferragamo posted a net profit, including a minority interest, of 14 million euros compared with a loss of 600,000 euros in the same period last year.
In the first quarter ended March 31, revenues rose 23.2 percent to 289 million euros, compared with 235 million euros in the same period last year.
Earnings before interest, taxes, depreciation and amortization amounted to 66 million euros, up 40.4 percent from 47 million euros last year with an incidence on revenues of 22.7 percent from 19.9 percent.
Operating profit totaled 24 million euros, compared with 7 million euros last year.



“Notwithstanding the rising geopolitical and economic volatility, we expect to increase our revenues for the current year, and today we are laying out the drivers to accelerate growth and realize the potential of Ferragamo,” said Gobbetti.
In the first quarter, retail sales grew 15.8 percent to 193.1 million euros representing 66.7 percent of the total.
The wholesale channel grew 40.2 percent to 92.8 million euros.
The company will launch a new concept store, and prioritize direct-to- consumer, but Gobbetti said “there will be no major clean-up of wholesale.”
While not expecting travel retail to return to pre-COVID-19 levels “anytime soon,” Ferragamo is elevating distribution in the U.S. as Gobbetti sees the channel as important in targeting a new audience and a fashion customer, and traffic offers “plenty of opportunity.”
Ferragamo will increase the focus on expanding its key categories — shoes and bags. Footwear sales in the first quarter rose 24.7 percent to 123.7 million euros, while leather goods and handbags were up 16.8 percent to 124.8 million euros. “We are quite competitive in pricing and shoes and leather goods are an opportunity to amortize the inflationary pressure,” contended Gobbetti.
Ready-to-wear was up 42 percent to 17.7 million euros, with plans to “elevate and drive” the category, said Gobbetti.
The U.S. and China are seen as the main growth engines in terms of geographies.
In the first quarter, sales in the Asia Pacific region edged up 0.9 percent to 103.4 million euros, mainly impacted by the lockdowns in China.
Japan registered a 17.7 percent increase in revenues to 25.5 million euros.
The Europe, Middle East and Africa region posted an increase in revenues of 41.3 percent to 60.4 million euros.
North America was up 46.1 percent to 83 million euros.
“We’ve seen very good progress in Europe and the U.S., rebalancing a dependency on China,” said Gobbetti.
“There are huge opportunities ahead of us, there is a lot going on, the brand has been resilient, we have the resources to [redirect] them to drive performance and our return on investment.”
Revenues in Central and South America gained 52.3 percent to 17.1 million euros.
“Speed is an important element, and there is a lot of value that we can extract in a relatively short time,” said the executive, who cited Ferragamo’s unique heritage, high quality and Italian style and craftsmanship, which will be blended with “casual, fun fashion that fits with a younger customer’s lifestyle.”
Chief financial officer Alessandro Corsi said the company will see a progressive acceleration of top-line growth rate and a meaningful operating profit expansion by the end of the plan, which has a horizon of four to five years. He underscored that he did not expect a negative EBIT next year, despite the increased investments.
To achieve the goals set, the company will also leverage “supply chain excellence.”
Gobbetti highlighted a strong focus on ESG and the human capital enhancement and evolution of the organization.
In the quarter, capital expenditures amounted to 6 million euros, up by 8.5 percent, mainly due to renovations of the retail network and investments in the digital channel.
As of March 31, the adjusted net financial position amounted to 359 million euros, compared with 169 million euros positive at the end of March last year.


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## jellyv

Good! Succeed! It's a legacy brand of quality with a demographic looking for high end but not ridiculous.


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## Purses & Perfumes

Interesting article.  Thank you for sharing.  The emphasis on reaching a younger customer makes me wonder if we will see an increased presence of their bags and footwear amongst influencers?  I kind of liked that Ferragamo was a little bit under the radar. 

I am looking forward to seeing the new designs and styles.  Agree that it's a legacy brand with high quality, and it will be great to see them succeed in their goals.


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## bagnut1

Purses & Perfumes said:


> Interesting article.  Thank you for sharing.  The emphasis on reaching a younger customer makes me wonder if we will see an increased presence of their bags and footwear amongst influencers?  I kind of liked that Ferragamo was a little bit under the radar.
> 
> I am looking forward to seeing the new designs and styles.  Agree that it's a legacy brand with high quality, and it will be great to see them succeed in their goals.


I agree but do worry about how it seems like every house has tilted way towards younger clientele.  That said, it seems like Ferragamo truly values its long-time customers so will presumably balance a younger shift without alienating them (unlike, say, recent changes at BV and Moynat).


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## thewave1969

Hopefully Ferragamo will keep its chic trademark and add some modernity without saturating with too much trendy rapper-style/urban streetwear style


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## Purses & Perfumes

bagnut1 said:


> I agree but do worry about how it seems like every house has tilted way towards younger clientele.  That said, it seems like Ferragamo truly values its long-time customers so will presumably balance a younger shift without alienating them (unlike, say, recent changes at BV and Moynat).


I think the key word here is balance.  It's true a business needs to be looking ahead, and I understand the need to be innovative and keep the collection fresh and updated, but a shift can be accomplished while keeping the long-term, steady customers in mind too -- maintaining that balance.   As you say, it seems like Ferragamo values its long-time customers so we will likely not see the kind of changes that were made at BV and Moynat.  I am not too familiar with the changes at Moynat since I don't follow that brand closely.  I should check out the Moynat thread sometime to understand the changes that have occurred.


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## Christofle

Hopefully Ferragamo starts to produce high quality shoes in-house… while it’s nice that you can receive good quality shoes through the tremazza line it’s a bit of a shame that a storied shoemaker has to rely on Paolo Scafora to produce the line.


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## papertiger

I'm hoping they go back to the archive for inspiration, Ferragamo was so avant-garde in the '30s, '40s and '50s.


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## Selmita

I'm a bit worried because lately they've been making more "trendy" designs which are not as timeless as before. I loved that it was a low key, if you know, you know, chic, timeless, quality brand. Nothing would irk me more than to see Ferragamo on every influencer out there. I stay away from Vuitton & Gucci because of that.


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## jellyv

Selmita said:


> I'm a bit worried because lately they've been making *more "trendy" designs which are not as timeless* as before.


Like what?


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## baghabitz34

jellyv said:


> Like what?


The new cage bag comes to mind.


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## thewave1969

baghabitz34 said:


> The new cage bag comes to mind.


Yes, personally I do not like the Cage bag. Seems a clunky bag to carry around. However I love the Studio, Trifolio, Quilted Gancini flaps.


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## Selmita

jellyv said:


> Like what?



The Trifolio Swing, for example, with the disproportionate handles.


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## jellyv

Selmita said:


> The Trifolio Swing, for example, with the disproportionate handles.


You think that's trendy? I don't, but I'm glad you directed me to it.


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## Selmita

jellyv said:


> You think that's trendy? I don't, but I'm glad you directed me to it.



It's definitely not a classic like the Creation or Boxyz bags. Once the Jacquemus-like trend is over that bag is not going to age well.


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## thewave1969

Selmita said:


> It's definitely not a classic like the Creation or Boxyz bags. Once the Jacquemus-like trend is over that bag is not going to age well.


Love the Boxyz bags! Very beautiful and class design. Sadly they are gone from the main website


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## bagnut1

Just got an email promoting the fall line and noticed that my beloved Trifolio Tote is now in some new colors.  I also noticed that it's priced *30% higher* than I paid nine months ago.

I guess the "double revenues" is coming from huge price hikes too!


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## baghabitz34

bagnut1 said:


> Just got an email promoting the fall line and noticed that my beloved Trifolio Tote is now in some new colors.  I also noticed that it's priced *30% higher* than I paid nine months ago.
> 
> I guess the "double revenues" is coming from huge price hikes too!


Not surprised. I noticed all the Studio bags went up & wallets too. There was a wallet I had my eye on - it went up $100. The medium Studio increased by $250.


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## jade

baghabitz34 said:


> Not surprised. I noticed all the Studio bags went up & wallets too. There was a wallet I had my eye on - it went up $100. The medium Studio increased by $250.


I am sure they will blame “inflation” “global shipping pressure” “war in Ukraine”


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## jaskg144

While I am happy with Ferragamo reaching out to new customers and aiming to become more mainstream, I really hope they don’t become one of the new trendy brands like Balenciaga or BV. I love Ferragamo because they are so understated and classic, and unfortunately I can see that slipping away with the direction they are taking. However, I am happy that they are promoting my beloved Studio bag - I was worried that the new creative director would get rid of it.


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## bagnut1

jaskg144 said:


> While I am happy with Ferragamo reaching out to new customers and aiming to become more mainstream, I really hope they don’t become one of the new trendy brands like Balenciaga or BV. I love Ferragamo because they are so understated and classic, and unfortunately I can see that slipping away with the direction they are taking. However, I am happy that they are promoting my beloved Studio bag - I was worried that the new creative director would get rid of it.


I had a lovely chat with the NYC store director some time ago and she filled me in on some history and manufacturing process aspects that lead me to believe one needn't worry too much about the company going overly "mainstream" - the commitment to design and authentic Italian craftsmanship/materials is in the company's DNA.


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## thewave1969

Just saw on IG that Salvatore Ferragamo company announced that now they are simply renaming to  FERRAGAMO


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## baghabitz34

thewave1969 said:


> Just saw on IG that Salvatore Ferragamo company announced that now they are simply renaming to  FERRAGAMO
> View attachment 5615074


Going down the path of Saint Laurent I guess.


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## bagnut1

Hilarious twitter replies to the announcement.


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## Christofle

bagnut1 said:


> Hilarious twitter replies to the announcement.


Darn you can't read them without an account. :S


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## 880

baghabitz34 said:


> The new cage bag comes to mind.


I love the cage bag, but something in my head has always held me back from purchase. 

i like ferragamo, but I loved the older shoes of Rosina Ferragamo Schiavone. (Sp?)
I never found any superb condition dead stock in my size though


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## papertiger

I can't see anything I like let alone buy. 

It's tired where it should be exciting and trendy where it should classic. 

I want fabulous MODERN Italian design (led) pieces (like Fendi often does well - even Prada once in a while) not _Stepford Wives_ with Italian subtitles.


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## Christofle

papertiger said:


> I can't see anything I like let alone buy.
> 
> It's tired where it should be exciting and trendy where it should classic.
> 
> I want fabulous MODERN Italian design (led) pieces (like Fendi often does well - even Prada once in a while)* not Stepford Wives with Italian subtitles.*


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## thewave1969

Sping-Summer 2023... https://www.ferragamo.com/shop/us/en




Any thoughts? Personally, I found it trendy but lacking glamour


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## papertiger

thewave1969 said:


> Sping-Summer 2023... https://www.ferragamo.com/shop/us/en
> 
> 
> 
> 
> Any thoughts? Personally, I found it trendy but lacking glamour




Agreed - they're going for fashion trends not brand DNA. 

There was one beautiful navy asymmetric chiffon dress with an ombre dip-dye white/lime neckline and hem that said glamour, also a chic mini Ferragamo red coat 'dress' worn with a red minaudière.  Those were the best. 

Mostly betting on big  bags or small Y2K.  

Patent/high-shine, zips, light/sheer. 

All very late '90s minimalist/space-age aesthetic. 

Menswear in Italy is going very S&M next year, so many black leather shorts (Prada too)

_The Matrix_ cast meets _2001: A Space Odyssey_ extras on Kubrick's set (with Italian subtitles)


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## bagnut1

papertiger said:


> _The Matrix_ cast meets _2001: A Space Odyssey_ extras on Kubrick's set (with Italian subtitles)


Rotfl


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## baghabitz34

papertiger said:


> I can't see anything I like let alone buy.
> 
> It's tired where it should be exciting and trendy where it should classic.
> 
> I want fabulous MODERN Italian design (led) pieces (like Fendi often does well - even Prada once in a while) not _Stepford Wives_ with Italian subtitles.


Well I guess I’m tired too, since I see a lot of items I would like to purchase. We’ll see if that continues with the new direction they are headed.


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## V0N1B2

Another fine Italian brand ruined by some “newcomer” turning exquisite craftsmanship into cheap plastic looking purses. If he cared so much about the heritage of the brand, why drop the Salvatore? Because as many have written before me in the YSL forum, it ain’t Ferragamo without the Salvatore. 
Guess I’ll just have to keep on searching for a better house in which to spend my money.


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## bagnut1

V0N1B2 said:


> Another fine Italian brand ruined by some “newcomer” turning exquisite craftsmanship into cheap plastic looking purses. If he cared so much about the heritage of the brand, why drop the Salvatore? Because as many have written before me in the YSL forum, it ain’t Ferragamo without the Salvatore.
> Guess I’ll just have to keep on searching for a better house in which to spend my money.


I don’t disagree that there are plenty of recent examples of houses being essentially ruined by unimaginative trend- and youth-obsessed designers. However, ignoring the younger market is as unhealthy long-term as it is to discard longtime clients in favor of serving them exclusively. 

I found some of the bags interesting and am excited to see the full mix once these new models are in boutiques.

More concerning to me is the huge recent price increase for bags. I’m not suggesting that the new pricing is out of line with  quality, but it signals an abrupt management philosophy change that will go who knows where.


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## jellyv

"Get me the hell off this planet."


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## Mcaldwell190

I saw these two beautiful bags at the boutique. The SA told me huge price increases are coming along with new designs. Ugh.


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## baghabitz34

Mcaldwell190 said:


> I saw these two beautiful bags at the boutique. The SA told me huge price increases are coming along with new designs. Ugh.
> 
> View attachment 5628538
> 
> 
> View attachment 5628539


Beautiful bags.

Not surprised by the price increases. There’s a few bags I plan on getting, then I’m probably done for a long while. Tired of all the ridiculous price increases across all the brands.


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## bagnut1

Yeah, the 30% increase in one go really grabbed my attention.  That seems to signal a significant reset (along with the new branding).

That said as long as the quality stays put, it is what it is.  However, if they go the way of Chanel with ever higher increases and notable declines in quality, so do I (bye bye).


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## baghabitz34

bagnut1 said:


> Yeah, the 30% increase in one go really grabbed my attention.  That seems to signal a significant reset (along with the new branding).
> 
> That said as long as the quality stays put, it is what it is.  However, if they go the way of Chanel with ever higher increases and notable declines in quality, so do I (bye bye).


It’s more than 30% in some cases.



When I bought this tote in August 2020, I paid $990 I think. They’re now selling these totes for $1590. The increases are crazy.


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## thewave1969

Mcaldwell190 said:


> I saw these two beautiful bags at the boutique. The SA told me huge price increases are coming along with new designs. Ugh.
> 
> View attachment 5628538
> 
> 
> View attachment 5628539


The second Iconic bag is gorgeous


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## thewave1969

Mcaldwell190 said:


> I saw these two beautiful bags at the boutique. The SA told me huge price increases are coming along with new designs. Ugh.
> 
> View attachment 5628538
> 
> 
> View attachment 5628539


I see a braided Boxyz in the second photo. Did you see them here in US?


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## Mcaldwell190

thewave1969 said:


> I see a braided Boxyz in the second photo. Did you see them here in US





thewave1969 said:


> I see a braided Boxyz in the second photo. Did you see them here in US?


Good eye!! Yes, that’s my bag, I love it. Posting a pic for eye candy.


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## Mcaldwell190

thewave1969 said:


> The second Iconic bag is gorgeous


Yes, and it feels great, but afraid it’s too delicate. Not sure I would buy it, but it looked great when I tried it on. It didn’t have a price either and not yet on the website, so not sure if it’s going to reflect the crazy price increases.


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## Mcaldwell190

baghabitz34 said:


> It’s more than 30% in some cases.
> 
> View attachment 5628708
> 
> When I bought this tote in August 2020, I paid $990 I think. They’re now selling these totes for $1590. The increases are crazy.


I bought this pink one at an outlet we have about an hour away from my house. They were having a huge sale and I bought a few items and ended up with the most discount you could get on top of outlet prices, so paid around $600. Then I wanted the same bag in black, went to the boutique and it’s now $2,100!!!!


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## baghabitz34

Mcaldwell190 said:


> I bought this pink one at an outlet we have about an hour away from my house. They were having a huge sale and I bought a few items and ended up with the most discount you could get on top of outlet prices, so paid around $600. Then I wanted the same bag in black, went to the boutique and it’s now $2,100!!!!
> 
> View attachment 5629893
> 
> 
> View attachment 5629894


Love the color and the interior is beautiful. Wish I had an outlet near me.


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## Mcaldwell190

baghabitz34 said:


> Love the color and the interior is beautiful. Wish I had an outlet near me.





baghabitz34 said:


> Love the color and the interior is beautiful. Wish I had an outlet near me.


Sometimes Ferragamo bags have a nice secret garden inside their bags. I love their florals.  I also got the scarf that goes with the inside of the bag. Help!


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## dotty8

Mcaldwell190 said:


> Sometimes Ferragamo bags have a nice secret garden inside their bags. I love their florals.  I also got the scarf that goes with the inside of the bag. Help!


Yes, or sometimes they put cute little bows on the inside pocket


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## redwings

thewave1969 said:


> Love the Boxyz bags! Very beautiful and class design. Sadly they are gone from the main website


Mine, taken out from storage. Should be around 4 years old now. It used to go on rotation with my Kellys. I have to pull the very first luxury bag (another long lost one where Ferragamo was aiming for professionals) I bought - it’s an old Ferragamo workhorse…need to rummage through the boxes for it.

It’s still a very good classic, reminiscent of Ferragamo’s timelessness. The current designs just turn me off.


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## redwings

Another old design in deer skin. It travelled over the world with me in the cabin…even during covid. Airline, Shinkansen, Deutsche Bahn - it followed me. It’s also the main carrier of my most expensive luxury bags taken out for overseas work trips or meetings.

And when I look at the current Ferragamo duffles now - they get a meh from me. Good luck to the CEO if he wants to double the revenue…the current bags don’t look that sturdy.


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## thewave1969

redwings said:


> Mine, taken out from storage. Should be around 4 years old now. It used to go on rotation with my Kellys. I have to pull the very first luxury bag (another long lost one where Ferragamo was aiming for professionals) I bought - it’s an old Ferragamo workhorse…need to rummage through the boxes for it.
> 
> It’s still a very good classic, reminiscent of Ferragamo’s timelessness. The current designs just turn me off.
> 
> View attachment 5632393


Fabulous color!


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## bagnut1

redwings said:


> Mine, taken out from storage. Should be around 4 years old now. It used to go on rotation with my Kellys. I have to pull the very first luxury bag (another long lost one where Ferragamo was aiming for professionals) I bought - it’s an old Ferragamo workhorse…need to rummage through the boxes for it.
> 
> It’s still a very good classic, reminiscent of Ferragamo’s timelessness. The current designs just turn me off.
> 
> View attachment 5632393


That is really beautiful, and I love how the handle and lock hardware totally complement each other in form.  Also great color!


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## jaskg144

redwings said:


> Another old design in deer skin. It travelled over the world with me in the cabin…even during covid. Airline, Shinkansen, Deutsche Bahn - it followed me. It’s also the main carrier of my most expensive luxury bags taken out for overseas work trips or meetings.
> 
> And when I look at the current Ferragamo duffles now - they get a meh from me. Good luck to the CEO if he wants to double the revenue…the current bags don’t look that sturdy.
> 
> View attachment 5632401



Stunning. I absolutely love deerskin, it wears beautifully over time.


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## Mcaldwell190

redwings said:


> Mine, taken out from storage. Should be around 4 years old now. It used to go on rotation with my Kellys. I have to pull the very first luxury bag (another long lost one where Ferragamo was aiming for professionals) I bought - it’s an old Ferragamo workhorse…need to rummage through the boxes for it.
> 
> It’s still a very good classic, reminiscent of Ferragamo’s timelessness. The current designs just turn me off.
> 
> View attachment 5632393


Gorgeous !!!


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## Mcaldwell190

Mcaldwell190 said:


> Gorgeous !!! And their hardware lasts and lasts and doesn’t look scratched after use.  The color is lovely. Great bag!!!


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