One of the most iconic Italian brands, hats-maker Borsalino, filled for Bankruptcy on 18 December 2017. This story proves that even the most renown brands, those with the longest history (110 years of activity) are not immune against evolving market trends and must reinvent themselves continuously.
I dedicated an article to yet another iconic Italian brand, Richard Ginori. It was created in the eighteenth (1735) century and filled for bankruptcy in 2013, unable to evolve and to adapt.
If you think of Borsalino, the situation is pretty similar. A luxury brand, with an invaluable craftsmanship expertise, kept doing what it did best during decades. The Borsalino hats you can buy today are no different from those worn by Alain Delon and Jean-Paul Belmondo in the eponymous movie.
What can we learn from the Borsalino bankruptcy ?
The Borsalino case tells us that firms have to remain agile and ready to transform if they want to survive. Tastes change, consumers behaviours are harder than ever to understand (hence the need for good market research). If your marketing strategy doesn’t evolve and isn’t revisited every 2-3 years, you are doomed to fail.
In the luxury sector, even the strongest brands like Vuitton do evolve. The latest partnership between Louis Vuitton and Jeff Koons is an innovation in itself. It questions, attracts prospects, make existing customers test new products produced in limited quantities.
What is the likely future of Borsalino?
My guess is that Borsalino will become a pray for luxury group wishing to acquire, for a relatively low price. Richard Ginori was eventually acquired by Gucci and I could very well imagine Borsalino being acquired by LVMH, Hermes (Borsalino would be a nice addition to Motsch, another hat-maker founded in 1887 and acquired by Hermes in 1991) or even Gucci. Hermes and LVMH in particular sit on a mountain of cash, a very tiny part of which could be invested in this brand (for the sake of comparison, Richard Ginori was bought by Gucci for €13m only).
Borsalino could be rejuvenated and diversify into other accessories. This is exactly what happened to Berluti. After the brand was bought by LVMH from Olga Berluti in 1993, it underwent several transformations, the latest of which was the diversification into accessories and clothes under the leadership of Alessandro Sartori. From a confidential brand, made by and for connoisseurs, Berluti became a flagship for the richs. It could even be taken over by one of the existing brands of the LVMH galaxy, like Arnys was taken over by Berluti in 2012.
I’m therefore pretty sure that in 10 to 15 years Borsalino won’t be the brand that we had known for 110 years.