Carlyle Italy’s Marco De Benedetti: “To build a €1 billion company, the product alone is not enough”

“It is not impossible to build a €100 million company if you have an innovative product idea that aligns with people’s tastes. But if you want to build a €1 billion company, the product alone is no longer enough,” said Carlyle Italy chairman and one of the architects of Moncler‘s success Marco De Benedetti, speaking at the Deloitte Auditorium in Milan for the ‘Brand Connection’ conference. “To make the leap, you need everything else, with a peculiarity in fashion: creatives are all ‘mad’ and you have to be able to bring together the creative and the commercial sides.”

“When I invested in Moncler, it had revenues of just over €100 million and sold only through wholesale channels,” said De Benedetti. “But the down jacket was no longer just for the mountains; it was becoming an urban product. And in this transition there was no benchmark brand at the high end. I value Remo Ruffini‘s ability to recognise his limits. He relied on my team to put the infrastructure in place and fully realise his vision. This is the role of finance: to complement that leap.”

Carlyle Italy’s top executive, who sold Carlyle’s remaining stake in Moncler in 2014, stresses the importance of scale for growth. “Only once you have reached a certain scale can you invest in research, innovation, and technology. In such a complex world, scale is fundamental. Not to make more money, but to face these challenges. Why is LVMH growing faster than the average? Because there is a group behind all these companies that, individually, would not have these capabilities. Finance helps companies accelerate growth. People with a purely product background are generally less attuned to this,” De Benedetti continued.

For the manager, sustainability has become a competitive element. “Ten years ago it was a major headache for companies. Today it is a business driver because consumers are placing increasing importance on this aspect. I am only concerned about companies that have announced grandiose plans. We will see several cases of unfulfilled promises. I hope consumers do not lose confidence,” said De Benedetti.

The future of luxury will continue to be influenced by China. “China has been one of the engines of growth over the last 15 to 20 years. The Chinese consumer (including purchases made while travelling) generated between 40% and 60% of big brands’ sales. Despite the post-Covid slowdown, China will remain an important market. To reach new markets and customers, brands must combine heritage and innovation,” De Benedetti concluded.