Roberto Gavazzi on Boffi's acquisition of De Padova


7 October 2015

In April 2015, Italian design brand Boffi announced the acquisition of furniture brand De Padova. In exchange for 100 per cent of De Padova, De Padova’s owner Luca De Padova acquired 7.5 per cent of the new parent company Boffi, of which he is now vice-president.

It was a significant acquisition. Primarily, it opens up Boffi – a producer of kitchens, bathrooms and wardrobes – to the world of furniture design. De Padova was founded in 1958 by Fernando and Maddalena De Padova as an import company for Herman Miller and Scandinavian design. Yet in the 1980s the company began to produce its own designs, the De Padova Edizioni, working with designers such as Vico Magistretti and Achille Castiglioni. Today, designers such as Nendo, Patricia Urquiola and Luca Nichetto round out its collection.

Acquiring this back-catalogue is a considerable coup for Boffi, although as important is the way in which the deal seems to reflect the general state of Italian design. Throughout the 20th century, Italian design was defined by its model of family-owned brands. Now, this system seems to breaking down. Once family-run companies such as Cassina and Cappellini have long been owned by investment groups, while 2014 and 2015 saw private equity firm Investindustrial acquire both lighting brand Flos and furniture company B&B Italia. An age of Italian design conglomerates seems to be at hand.

What this will mean for Boffi and De Padova ought to become clear with time. Later this month De Padova is to open a new showroom in Milan, moving from its central-Milan premises on Corso Venezia to a warehouse space on Via Santa Cecilia. It will be a first bow for De Padova under Boffi ownership.

In anticipation of this move, Disegno took the opportunity to speak to Roberto Gavazzi, CEO of both Boffi and, now, De Padova. In the resultant conversation, Gavazzi spoke about the motivations behind the merger, the challenges of maintaining family-run businesses, and why design brands need to be big to survive.

When did you start considering merging the companies?

We have discussed this idea of expanding Boffi into something more than kitchens, bathrooms and wardrobes for a while. We wanted to expand Boffi into the rest of interiors, but without using the Boffi name, because we want people to perceive Boffi as a company with a strong industrial background. Boffi needs to focus on what it does.

So why did you want to expand into other areas?

It’s strategically important to able to offer a full range of products when you’re sitting with a customer who wants to solve his interior problems. If you give him the kitchen, why not try to make him happy with the rest of his house? So the idea was to add something through another brand, a strong brand, and, as much as possible, one brand. De Padova has always been a good candidate to be that brand, because De Padova is a company that does exactly what we need: from bedrooms to living rooms.

But lots of furniture brands cover that field. Why De Padova in particular?

It’s a fantastic brand with an excellent style that is capable of being integrated with Boffi. De Padova has the same taste as Boffi, although it is not characterised by one specific style as many companies are. It’s more open to different influences. Also, it’s such a prestigious brand in Italy, although maybe not so much abroad because it has never really exploited international development. So it was an interesting opportunity to integrate De Padova, grow it with Boffi and integrate the two brands. But of course, it’s not so easy to take over a company if it belongs to somebody else.

So how did the merger happen? The company has always belonged to the De Padova family.

About 15 years ago I started to speak to Maddalena De Padova, who was the owner and soul of the company, about the possibility of merging the two companies. She was very interested, but she was an incredibly hectic woman who was not easy to bring into a specific project. She was so enthusiastic to pursue her own freedom. We spoke many times but never came to an agreement.

Then the company passed into the control of Luca and Valeria De Padova in 2010.

We started conversations again, but nothing happened for many years. Then, in January of this year, Luca De Padova called me and said that he thought our project was an interesting one that he would like to explore. We talked together for a couple of months and very quickly reached an agreement. The deal was signed in April before the Salone. It’s a nice deal because it’s more a merger than an acquisition. Luca De Padova exchanged his shares for a part of the shares of Boffi.

What was the appeal for Luca? A lot of articles about this have focused on De Padova’s financial difficulties. Is that fair?

The company had zero debt, but it was true that the family, although very wealthy, did not want to invest more money in the company. It was also clear to Luca that if you want to grow, you need to be much bigger and to have the resources to open your own shops around the world and launch new products. To play that game alone was too expensive and not so rewarding. I wouldn’t talk about financial problems, but he did have financial considerations. Financially it was too much for him, but he still wanted to expand the company. The idea now is to refresh the whole collection and aggressively restart.

What do you get from De Padova if you’re looking to refresh it quite dramatically? Why not just start afresh with a new brand?

There are not so many companies with as strong a heritage as De Padova. There are some very successful companies out there, but they don’t have as strong a soul and as incredible a charisma as De Padova. These traits have incredible value if you’re able to revamp the company in a nice way. So we want to take advantage of this culture behind De Padova. The products create good feelings because the whole system behind De Padova strongly transmits those feelings. We also want to work around the existing collection, where there are already a lot of iconic pieces.

Will buying De Padova help you in certain markets in particular?

De Padova helps us a lot in all markets, because in many areas being a producer of kitchens, bathrooms and wardrobes is not enough any more. If you want to be be everywhere and have your own strong brand and image, then you need mono-brand shops. But Mono-brand kitchen shops are not enough today. In the 1990s we built a network of mono-brand shops in a very successful way and were amongst the first to do that. But it’s difficult to recreate that today from zero, because it's very expensive as an investment. Now, my idea is that we need to go a bit further. De Padova will give us a lot of help in this by adding an element that is necessary today and let us supply more service and project pieces.

Do companies increasingly need to be big to survive in the design world? Investindustrial has just bought Flos and B&B Italia, for instance.

It’s a question of the right balance. Of course you cannot be too small if you want to play certain games. If you want to be visible and recognisable around the world – in New York, London, Paris – then you need resources, which means money and people, and those go with dimensions. You don’t get a certain level of people if you’re not big enough, so scale is really crucial. But you can play a very good game without being too big, because being too big is also dangerous in our business. You become too common and are less interesting because you’re everywhere and too much.

What do you mean exactly?

You lose some natural human empathy, because you become too focused on management and not enough on being entrepreneurial. That’s why we have an amazing opportunity. We’re not owned by a private equity company. We’re an industrial company and one of the very few alliances that is built around entrepreneurial families. Many of the other design brands are playing more with owners from financial backgrounds.

Italian design seems to be moving away from its 20th-century tradition of family-owned businesses.

There’s always the problem of the second generation or third generation with a family-owned company. They say the first generation builds, the second maintains, the third destroys. It’s a very difficult business, because the design furniture world needs high creativity, but it also needs to be industrially very well prepared. Companies are delicate mechanisms like watches. The technology needs to be there to create the watch, but it’s a complex mechanism where everything needs to be put together extremely precisely. Sensibility is extremely important.

You think that is easily lost?

Our competitors, who are moving towards more financially-driven strategies, can lose things that are really crucial. I hope that we can take advantage of this and create our own space in between. But it’s certainly difficult to continue with the family model. You need a second or third generation that understands the values of the company and has the sensibility for that. If you don’t have that vision, then it’s best you get out and sell to a financial company. At least they’ll have some money.