Parisian tailoring label Smalto in alarming downward spiral
Beset by creative director turnover, Parisian menswear label Smalto is now having to deal also with the departure of its CEO, Agnès Sarah Espinasse. Espinasse joined Smalto in October 2017, tasked with “relaunching the sleeping beauty,” but has thrown in the towel after just over a year in charge. Her predecessor, Bernard Flobert, lasted just three years himself.
A spokesperson for the label confirmed to FashionNetwork.com that Espinasse no longer works for the company. She has been replaced by Ludovic Dauphin, a financial controller with experience in the real estate sector and a close collaborator of Alain Duménil, Smalto's owner. Duménil bought the company from designer and founder Francesco Smalto, who retired in 2001. The couturier then died in 2015. Dauphin will be supported by Valérie Tondon-Durbecq, a fashion and luxury consultant who was formerly in charge of the collections and has been appointed deputy CEO.
In three years, the Parisian tailoring label changed no less than three designers, from Eric Bergère to Franck Boclet and finally Jean Luc Amsler, who presented a first capsule collection in January. A creative instability which is eloquent evidence of the profound crisis which has gripped the label in recent years. Smalto is struggling to recover and its business is inexorably shrinking.
In the financial year closed at the end of March 2012, the label founded in 1962 by Francesco Smalto, which used to dress princes, heads of state and sport stars, reported a revenue of €25.4 million, and was profitable. By the end of the 2013-14 financial year, Smalto was in the red. According to the statement for the non-standard financial year ended in March 2018, Francesco Smalto International generated a revenue of €5.5 million and suffered a loss of €4 million, compared to a revenue of €8.4 million and a loss of €6.2 million the previous year.
The label’s staff shrank from 59 to 40 in just one year, and its distribution network foundered. The label is currently distributed via two directly owned stores, in rue François-Ier, Paris, and in Bordeaux, a franchised store in Casablanca, Morocco, and a handful of multibrand retailers in Russia, Jordan and elsewhere in France. It still relies on a bespoke tailoring clientèle, though this too is much reduced.
Smalto has a contract to outfit the French national football team with suits for formal occasions, and is expected to launch an underwear line and a licensed luggage line in 2019.
Smalto is failing to return to its former glory surely due to lack of resources, but for lack of talent too. The label’s key figures have left, and no fresh appointments have been made to tap new growth drivers, such as for example e-tail and digital tools, Chinese consumers and millennials. Of course, the negative economic situation has also affected the company.
“In the last ten to fifteen years, the company has been undermined. In recent years, it suffered a terrible shortfall in customers. It lacks lifeblood, and business is now minimal. In fact, it only survives through the financial backing of its majority shareholder,” a source close to the company told FashionNetwork.com.
A shareholder who is at the very least controversial, and whose notorious reputation undoubtedly casts its shadow on Smalto, as shown by the various affairs in which Duménil has been enmeshed. A former banker also previously active in the aircraft industry, Duménil is an investor specialised in real estate and the acquisition of luxury labels. He was notably convicted in 2012 for collusion in Stéphane Kélian’s 2005 bankruptcy, and was also charged as a result of an investigation involving the French foreign intelligence service (DGSE). Recently, French weekly magazine L’Obs reported on the largesse bestowed by Duménil to politicians, such as for example Jack Lang, who received several Smalto suits as gifts.
Besides Smalto, Duménil has held several French labels in his portfolio at one time or another, including Jacques Fath, Emmanuelle Khan, Jean-Louis Scherrer, Louis Féraud, the jeweller Poiray, Harel, Stéphane Kélian and René Mancini footwear. Some of them have been sold, others have closed down or are dormant.
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