The name Ferrari imparts instant cachet, bringing to mind images of sleek Italian sports cars whipping up and down the scenic highways of locales like Monte Carlo or racing around the world’s most famous tracks on their way to victory. For more than 50 years, Ferrari has had the name and now its CEO wants to bring on the game.
At the moment, Ferrari has an online store selling merchandise bearing the carmaker’s name but not all of the items live up to the famed sports car’s reputation for quality and exclusivity. The meager collection of Ferrari watches ranges in price from $75 for the brightly colored Pit Crew line to $745 for the Gran Premio Automatic Watch in stainless steel.
Ferrari sunglasses do a better job of representing the brand with styles starting at $175 and going way up to the $2,300 LaFerrari model. Clothing starts with run-of-the-mill caps and tees going up to leather jackets for men and women selling for $1,700 to $1,900.
Ferrari Chairman Sergio Marchionne is not satisfied with this state of affairs and has plans to position the carmaker as a luxury goods company like Hermes or Armani. According to analysts, one way Marchionne intends to accomplish this is by refining the line of merchandise—which could definitely use a little refining.
Rumors in the luxury goods industry claim that Marchionne has ambitions to create an alliance of high-end partners and producers that could compete with LVMH, home of TAG Heuer and Hublot watches.
Brand Finance exec Robert Haigh agrees that the Ferrari name is not currently being well utilized. “There are Ferrari caps, rubbish jackets and watches that are not necessarily expensive or well-made. They are not necessarily protecting the Scuderia brand the way they should be.”
Last month when he was announcing plans to spin off Ferrari from Fiat Chrysler Automobiles NV, Marchionne made a telling comment. “I actually think cars are almost incidental to Ferrari,” Marchionne stated. “It sounds sacrilegious. But it is truly a luxury brand.”
This statement makes more sense when you take into account that while Ferrari automobiles may carry tons of prestige, they don’t make a lot of cash for the company. In order to maintain exclusivity, Ferrari keeps annual production down to 7,000 units.
Still, the Ferrari brand is estimated to be worth around 4 billion. It’s that figure that Marchionne hopes to improve upon. His challenge is increasing revenue while preserving the exclusivity of the legendary brand.
With the right designers and manufacturers, this is certainly doable. To have the Ferrari name on a $75 watch or a $30 cap is neither preserving the integrity of the brand nor bringing in suitable revenue for the company.
It will be most interesting to see what Marchionne does in the future to monetize the Ferrari name and attach that famous dancing horse logo to luxury products that are worthy of it.