A retirement plan with a difference

An unexpected exit

Like many entrepreneurs, Andrea Morante’s exit from his biggest enterprise was not completely planned. After a career in investment banking and advisory, Morante was invited by the founder of Italian jewellery brand Pomellato, a privately owned company, to take a significant minority stake and become CEO. After eight years of growing the brand internationally, Morante and founder Pino Rabolini sold it to an international luxury group, in 2013, triggered by the founder’s personal circumstances which Morante had not factored in when joining the company. 

The sale netted a significant amount. Morante admits that he would have been happy to continue running Pomellato for a few years longer, had circumstances been different. A luxury veteran, Morante had been involved with the turnaround of a major family-owned Italian fashion brand in the early Nineties as Board Member and Chief Operating Officer. He observes that changes in principals’ health can often have significant consequences in family owned companies.

After exiting, Morante says that, although he did miss some of the more glamorous elements of the luxury CEO job – “which can become addictive” – he did not feel like he had a hole in his life where his former company used to be. He attributes this to having had his own plans, a diversified career, balancing continued entrepreneurship with other passions and hobbies.

“For many business owners, that business represents their lives, and it is a shock when (or after) they sell. For me, although I was also an owner, it wasn’t my life – it was a very interesting business opportunity that I fell in love with. I had other interests and plans.” Morante notes that, in the case of a member of an owning family who sells a business, post-exit emotions can be different as they identify more closely with the business.

Investing in the luxury supply chain

After the sale, Morante decided to invest in the supply chain within the luxury goods industry. ”If you are lucky enough to identify and acquire smaller companies that are suppliers to the luxury industry, you can help turn them into more powerful business partners of a brand. They then bring a higher value added than that of just making up components and this translates also in a stronger price bargaining power.”

With some friends, he bought a majority stake in a company in northern Italy (AMF) that was in the process of consolidating its activities within the metalwork segment of the luxury industry. “I had the advantage of coming from within the industry and I could see the increasing importance that brands were attaching to metal accessories and the sustainability of metal components. Increasingly, a beautiful branded bag was recognisable not only for its design but also for the beauty of its chain, zipper and metallic closures.”

Morante also invested in the Italian Locman watch company, in an ice-cream start up (Stecco Natura) and in the air filter technology called Kair Laser. He says he identified an opportunity for growth and for him to add value through his networks, in each case. At the same time, he co-founded a private equity fund, in Milan QuattroR, specialising in business turnarounds, often involving the acquisition of family owned companies facing financial distress or needing to accelerate their business potential.

Lessons from successes and setbacks

So has everything gone according to the plans he made for himself while exiting his jewellery business? “I would say that in terms of business developments a good 50 per cent of it has gone according to plan; 35 per cent has been represented by pleasant or interesting unforeseen developments and 15 per cent falls in the category of ‘tough investments’.

“In the world of investments,” he continues, “you have to assume that, sooner or later, you will end up with the reality of a negative experience: an asset that has no liquidity, that you can only sell at a loss and that ends up absorbing a lot of valuable time.“ He does not go into further detail about the specific investment, although many portfolio investors would recognise the experience: not every company turns out to be a success.

Does he have any lessons for others? “Try to transform the problem into the opportunity of learning something new, while reducing collateral damages as much as possible. Recognising the mistakes that you’ve made is very important.”

Morante has followed his passions, too, devoting more time to collecting art, particularly 20th-century Italian art and pieces from emerging contemporary artists – as well as finding time to try and support a major collector of the Italian Arte Povera school (which featured artists such as Alighiero Boetti and Giuseppe Penone) in his efforts to open a museum devoted to the movement. 

Morante seems happy with the portfolio investment life he has made for himself, after an exit which, while lucrative and prestigious (his brand was sold to a global luxury giant), was unexpected in terms of timing.