After a deal that wasn’t there, Bally tries to get back on track


You might think Bally was a Chinese brand. In 2018, there was much fuss over the news that textile group Shandong Ruyi acquired the Swiss luxury shoemaker from JAB Holdings as part of a bid to become the “LVMH of China”.

But shortly after that buzzy deal was closed, which followed Ruyi’s acquisitions of Acquascutum and SMCP, the easy credit that had fueled the group’s purchasing power vanished. In early 2020, it was clear that the $ 600 million that Ruyi had reportedly promised to pay for Bally was not going to be realized. That period of uncertainty was followed by the 2020 coronavirus pandemic, in which revenues fell 27 percent.

Now Bally is trying to get back on track with a renewed commitment from JAB Holdings, the investment vehicle of the German billionaire Reimann family that has owned the brand since 2008. said. “They want this beautiful story to continue.”

The brand will open three flagship stores in June, in New York City, London and Sydney.

But as the brand re-enters major retail markets, ramps up marketing investment and updates its positioning to regain cultural relevance, it may seem like you’ve seen this movie before.

In the run-up to the sales attempt, Bally opened new flagships on Bond Street in London and Madison Avenue in New York only in 2014 and 2017. Girotto, the brand’s former chief operating officer who was promoted to CEO in 2019, closed those locations when he took over, unable to justify the high rents.

In the ’80s and’ 90s, Bally was a driving force in luxury footwear, with his Scribe dress shoes dominating American department stores. As an early champion of luxury sportswear, the brand’s red-and-white striped sneakers, polos and backpacks also became cult items on the street, regularly checking by name in the lyrics of entertainers including Salt-N-Peppa, Biz Markle and Ghostface Killah.

A former owner, private equity giant TPG, had also invested in a retail push at Bally in the early 2000s, and it took five years for the brand to return to profitability after a too rapid withdrawal from department stores caused the company to go haywire. A Gucci manager was able to get the company back on track in time for a sale to its current owners, but its cultural relevance has never been restored.

Sustainable scale-up has been challenging for Bally, despite moves such as hiring a creative director (Pablo Coppola, who left in 2017 after a three-year spell) and the most recent wave of flashy store openings (even when one of them got a note. at the top The New York Times, with music critic Jon Caramanica asking “Is Bally more interesting than Gucci?”).

Prior to the pandemic, annual sales of about CHF 350 million ($ 378 million) were broadly in line with a decade earlier, Girotto said.

Bally’s former COO Nicolas Girotto has been the brand’s CEO since 2019. Courtesy.

This time, Bally is trying to grow with a more financially disciplined approach. “Transforming a brand like Bally is not just about putting money into it. It’s about how to achieve healthy and sustainable growth, ”said Girotto.

Rather than reentering the blue-chip shopping streets “where it’s just one luxury boutique after another”, the brand is moving to locations whose mix of fashion, culture and restaurants better reflects the industry’s current focus on sell to local customers. While domestic luxury shopping is recovering from the outbreak of the coronavirus, long-distance tourism is expected to take longer to recover.

A new store in New York’s Meatpacking District is located down the street from Hermès and Marni, and near such venues as the Whitney Museum and The Standard hotel, a popular spot for locals and visitors alike. (Before the pandemic, the area also had some of the city’s most popular restaurants).

In London, the brand is moving just a few blocks from its previous home on New Bond Street. But the new location between Regent Street Zara and Piccadilly Circus tube station is a busier, more democratic hub with more traffic from commuters and local teenagers.

In terms of design, rather than marketing a new, creative vision from above – as is common for luxury brands looking for a renaissance – Bally relies on a bottom-up, customer-driven approach for its repositioning. It conducts consumer surveys, A / B tests for campaigns and social media posts, and even tests consumer prototypes and prices for items in development before moving on to merchandising and production.

“We’ve heard from our customers and tried to understand what they want from the brand,” said Girotto.

While “Swissness” doesn’t mean much in the field of luxury fashion and leather goods – Bally is truly the country’s only major player in the field – the company has decided to express its unique heritage primarily in understated style. The triple-stripe sneakers are still around, as are mountaineering-inspired leather boots (the brand actually dressed Sir Edmund Hillary and Tenzing Norgay for their historic Everest climb).

“Our role is not to be a brand that is progressive,” said Girotto. In terms of design, “transforming Bally into a ‘Gen-Z brand’ would make no sense.”

Still, Girotto knows he needs to reach the next generation of customers, saying the brand has renewed communication with more videos, standout partnerships with KOLs, and awareness of its sustainability and values ​​business.

The move to highlight a recycled nylon thread helped Bally get into the top 30 most talked about luxury brands on Douyin (ByteDance’s Chinese equivalent of TikTok) in January. A pair of curling boots whose net proceeds went to support a mountain clean-up initiative also became a bestseller.

Customers “are increasingly making informed choices,” said Girotto. “Our timeless silhouettes lend themselves to a long life for a more responsible approach to fashion.”

The effort to revive the brand online is showing the first signs that it may pay off: sales grew by 46 percent in the first quarter.

Bally's new Beckie bag and classic

Bally’s new Beckie bag and classic “Scribe” shoes. Courtesy.

But while it’s true that more conservative styles seem to be making a comeback after a period of chunky sneakers and logo prints, even the most flamboyant labels have never stopped offering classic items under the umbrella of their standout brands. Bally’s Scribe lace-up shoes will have to beat similarly priced options for men from Gucci, Dior and Givenchy.

On the women’s side, prices are more competitive, with its ‘Beckie’ shoulder bags costing about half as much as comparable models from Gucci.

As Bally reopens stores in a market where the biggest and most vibrant brands have eaten up market share faster than ever, there is little guarantee that “if you build it, they will come.”

“Bally has some very sharp and desirable products, but they sit alongside some fairly generic products,” said Pierre Mallevays, co-chair of Merchant Banking at Stanhope Capital (and boF contributor). Still, bringing in a “strong and visible creative director would make no sense unless the current owners are willing to endorse a complete overhaul.”

While the brand is trying to stabilize and shake up its company again after a slump, such a splashy makeover is not in the cards for the time being.

‘I will not pass up the opportunity [a creative director] ever think to encourage more creativity, ”said Girotto. “We are at a point in our journey where consistency is best for our customers and our brand.”

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