LUXURY conglomerate LVMH is seen as a rapacious lion in the fashion jungle, regularly devouring vulnerable family-owned labels.
When Hermes, the 174-year-old maker of Birkin bags and silk scarfs, discovered was in LVMH's sights, it raced to the French courts to block the potential takeover. Italian jeweller Bulgari took a very different path, offering itself to the lion king - for a price.
In March LVMH acquired Bulgari in a share deal that valued the supplier of sparkle to stars such as Sophia Loren, Gina Lollobrigida and Elizabeth Taylor at €3.7 billion ($5bn).
"They are now the controlling shareholder of the company," says Francesco Trapani, chief executive of Bulgari and head of LVMH's watch and jewellery division. "At the same time this family is the second largest shareholder of LVMH because we have exchanged shares and we have bought additional shares."
As the great-grandson of Sotirio Bulgari, the Greek silversmith who fled his homeland and in 1884 opened a jewellery store in Rome, Trapani is entitled to speak for the family. Having controlled Bulgari since 1984 when aged just 27, he is also the broker of the new deal.
"It is a quite interesting new relationship and I see only positive signs up until now," he says. "The company remains independent. LVMH wants to have a portfolio of very strong brands with a strong character so they need to have in power a team of people that are in charge of these brands. They give a lot of freedom to these people.
"The people in charge of different brands are shown more opportunities to grow and make the company and the brand more solid and more competitive."
Potential growth was the fuel for LVMH's appetite for Bulgari and this is what makes Trapani's eyes gleam. He has already pushed his family business into watches, beauty and handbags as well as working with the Marriott hotel group on resorts and hotels in Milan and Bali.
"In the next three years the strategic plan calls for solid growth in all product categories and in most geographical areas, of course greater China being the largest opportunity for growth," he says.
For the first half of 2011 turnover in China increased by almost 60 per cent, contributing to an overall turnover of €548 million.
I meet Trapani, a dashing and cunning silver fox, in Beijing for an exhibition of Bulgari jewellery at the National Museum of China. The impressive display of ornate silver buckles, diamond necklaces and colourful brooches is as much about commerce as culture.
"The exhibition is very strategic because if you want to grow very aggressively in this country [China] you need the proper distribution network," Trapani says. "It's very important that you invest aggressively in communication. In our specific case, having so rich a history is a competitive advantage, but of course you have to tell this history properly.
"There is nothing better than this exhibition to tell the media, first of all, and a lot of people about the richness of Bulgari."
The exhibition was originally staged in Rome in 2009 for Bulgari's 125th anniversary, before moving to Paris last year. The major change was the removal of Elizabeth Taylor's substantial collection, which will be auctioned by her estate in December. According to Taylor's great love Richard Burton, Bulgari was the only word the actress knew in Italian. "I introduced Liz to beer, she introduced me to Bulgari," he said.
Filling the void left by Taylor's baubles is the collection of Italian film legend Anna Magnani, a necklace worn by Princess Grace of Monaco, colourful settings of the 1970s and Dynasty-style collars and bracelets from the 80s.
"We have a long history and what you see today is the result of a lot of work for many, many years," Trapani says.
With the education process in place, Bulgari plans to open more stores in China but growth is not restricted to the mainland. Melbourne's second Bulgari boutique opened this week at the Crown Entertainment Complex, perfectly positioned to capture Chinese visitors to to the casino.
Stores will be the only area of expansion for the label in the immediate future. Trapani opposes any suggestion Bulgari should follow the lead of its new stablemates and move into ready-to-wear like Louis Vuitton and Celine.
"The focus will remain on our four categories and we will make our position stronger in each product category," he says. "We will remain focused on jewellery, watches, beauty and accessories."
Bulgari will also keep looking to the past as it moves towards the future. Trapani is not interested on emphasising contemporary designs or specific designers.
"Companies are very overexposed on the contemporary," he says. "History and heritage is important. Today you are exposed to the contemporary Bulgari stores, the contemporary pieces, the contemporary campaigns, the contemporary people. This is what we do every single morning.
"We run the opposite risk. We don't spend enough time to really tell the people what we were in the past. What we come from. Where we come from."
Soon Trapani will move further away from his roots when he appoints a new chief executive to Bulgari so he can focus on his new position overseeing Tag Heuer, Zenith and Hublot watches and De Beers and Chaumet jewellery.
Trapani moves into the role confident of what he has brought to the table seating LVMH's top players. "In luxury you have things that are more upscale and less," he says.
"We sell very expensive things. We are adding a bit of upscale and prestige to the family."
