Ferrari’s prancing on Wall Street —
Italy's precarious brand loved by many
Ferrari’s shares floated this week at the top of their proposed price and unlike most, didn’t hit the post stake bump down, ending the weeks trading at 40 times last years earnings. With sales last year at Euro 2.7bn, Ferrari purposely kept the sales units less than 10,000 cars to retain its emission standards exemption. Perhaps a lesson to VW as to how to sell less for more and not need to lie about correctness, Ferrari races on unashamedly.
All luxury companies are about branding, however in Ferrari’s case not quite, in that they are not entirely in control of their brand like others. It will all depend on who owns Formula One where ownership could change very soon. With much more capital required than making fashion or perfumes there is a finite limit to how many customers are out there. They have to spend a lot of money to make money which will undoubtedly limit profit growth, being in rare air of design excellence and speed they can’t dissapoint their brand supporters by making a slower cars. Certainly a racy brand with an enormous appetite to guzzle capital, the prancing horse has to continue to gallop.
"a racy brand with an enormous appetite
to guzzle capital"
The legend lives on and the sole bearer of the Ferrari name Piero Ferrari became a paper billionaire this week. Standing proudly outside the New York stock exchange with I can imagine many of the Wall Street lads looking on with lascivious envy just the perfect spot on the planet to celebrate humanity’s excess. Some say the Brand should go on to make itself less vulnerable by making luxury goods, but somehow for me the daring will dissapear from the brand, the very catchet we all love it for.
Like its founder who only made road cars to fund his racetrack endeavours, its spin out risks are high, yet there is something in our human nature that craves risk and delight in stepping beyond if you have the money. Prancing along this fine line is the clearly the brand’s challenge. What a day for Piero as Vice Chairman to celebrate Enzo’s dream which began in the 30’s. Born to his legendary father and a long standing secret relationship with his mistress Lina Lardi in 1945, remaining out of the public eye for more than thirty years, Piero only only took on the name Ferrari following Enzo’s wife Laura’s death.
"Prancing along this fine line is the clearly the brand’s challenge"
Known lovingly by his Maranello team of engineers as il Grande Vecchio, the Great Old Man, he’d been pleased to know of the company’s independance again for the first time since 1969 and that his love child Piero the sole bearer of his name owns a priceless 10% of the stock valued all up on listing at $10.4 bn. Undoubtedly Italy’s most famous brand, its story is born out of an age and era where risks were high, lives often short, with a love of life and excess few could imagine these days. Nothing’s really changed up close and this week in Wall street simply ensures Enzo’s legend lives on.