Business profile: Librerie Feltrinelli

Business profile: Librerie Feltrinelli

Italy has never been an easy book market with its distinct north-south divide and a notoriously disengaged readership outside of its larger cities. The Euro crisis has added further pressure, hitting the books market extremely hard. According to the latest figures by the Italian PA, Associazione Italiana Editori (AIE) sales were down 4.6% in 2011 to €3.3bn (£2.7bn), and down a further 8.7% in the first nine months of 2012. Figures over the holiday season are still to come, but benefit cuts, tax hikes and rising unemployment have put a massive dampener on the festive spirit of many Italians.

Librerie Feltrinelli, one of the largest Italian booksellers (and a major music retailer as well) has also been hit by the weak market. Sales fell 5.4% across the board during the first half of 2012, with books down 3.9% year on year, according to spokesperson Paolo Soraci. But despite disappointing sales, the mood at the company’s HQ on Milan’s Via Tucidide is still remarkably upbeat, in marked contrast to other major European book chains.

The family-owned business has stayed clear of hitting the panic button and introducing drastic cost-saving measures. Instead, the Feltrinelli family—led by German-born president Inge Feltrinelli and her c.e.o. son Carlo—are sticking to their guns and continuing a strategy of carefully orchestrated expansion. A total of 16 new bookshops have been opened in the last two years, a period which also saw Feltrinelli enter the franchise and catering industry for the first time.

Taking risks
While Feltrinelli’s roots are in publishing, the first bookshop opened as early as 1957, only two years after Giangiacomo Feltrinelli Editore was founded. In 2011, Librerie Feltrinelli recorded sales of €357.2m and claimed a market share of approximately 17%. To end December 2012, the business consisted of 119 stores, trading from almost 61,000 square metres, as well as a thriving online business. It is by far the largest single contributor to the Feltrinelli Group, the family holding which reported total sales of €449.2m (£367m) in 2011.

Feltrinelli is a traditional bookseller which embraced non-book products like music, games and stationery early on. Music especially has become a major source of income since Feltrinelli took over the Ricordi music shops from Bertelsmann in 1995. Each store carries, on average, 35,000 different titles—but this can be more than 65,000 books and 35,000 DVDs in the larger stores.

The company’s approach to bookselling is unique in more ways than one. Not only is the family known for taking (calculated) risks—“you have to be prepared to take chances if you want to catch the big fish”, Inge Feltrinelli once famously said—there is arguably no other bookseller around that serves its market with so many different tailor-made formats.
Still fiercely independent, this versatility is both the secret of Librerie Feltrinelli’s success and its trademark. The family and managing director Stefano Sardo leave nothing to chance when it comes to bringing books and customers together: including the online outlet feltrinelli.it, they have the market extensively covered by a total of nine different sales channels. Close to 50 million people have visited the shops in 2011 which employ a total of 1,600 staff. Over three million Italians own Feltrinelli’s own loyalty card, making Carta Più one of the most popular loyalty cards in the country.  

Red rooms
The latest addition to the Feltrinelli stable is called RED, an acronym that stands for “Read Eat Dream”, and one which handily references the trademark colour of all Feltrinelli bookstores. It is the family’s most ambitious project yet, combining a bookstore, an upmarket culinary marketplace and a restaurant under one roof, as well as linking offline and online services. Wi-Fi is installed throughout and there are iPads available both in the sitting areas and at restaurant tables for customers to browse Feltrinelli’s catalogue, order books online or study the daily menu in a relaxed atmosphere.

RED is run in conjunction with the catering company Antica Focacceria San Francesco in which Feltrinelli holds a 49% interest. The first RED opened in Rome in July on 650 square metres in a prime location in Via del Corso.

While critics and customers have heaped praise on the concept as such, Rome has also become a cause of major concern for the Feltrinellis: in mid-October, the historic building had to be temporarily closed because of structural problems. No date has been set yet for the premises to open again for business, but re-open they will, says Soraci. In the meantime, planning is in the advanced stages for a second RED to open in Milan in the spring, with more locations to follow later in 2013.

LIBRERIE FELTRINELLI’S CHANNELS

La Librerie Feltrinelli

Founded in 1957, it is the company’s core business, currently comprising 32 traditional bookstores averaging 450 square metres in top locations in large and medium-size cities. In addition to books, the stores carry stationery and a small collection of music. The latest store was opened in December in Parma.

La Feltrinelli International
Three bookstores specialising in foreign-language publications with an average size of 428 square metres (founded in 1985).

La Feltrinelli Libri e Musica
Twenty-nine large stores covering between 1,000 and 1,500 square metres and carrying an extensive product mix of books, music, home video, games, stationery and, usually, a café. Founded in 2001.

La Feltrinelli Village
Twenty-eight branches in shopping malls with a book range specialising mainly in bestsellers and fast-moving titles (founded in 2001).

La Feltrinelli Express
The specialist format for travellers in railway stations and airports was successfully introduced in 2007, and now spans 12 locations. The company’s pride and joy are the “Grande Stazioni”, state-of-the-art bookshops in major stations that serve the neighbourhood as well as the traveller. The most recent La Feltrinelli Express was opened in Verona shortly before Christmas, with Bari following suit early in 2013.  

Ricordi MediaStores
Most of the branches have been converted into La Feltrinelli Libri e Musica; the remaining two shops sell mostly music and games, with only a very small range of books.

La Feltrinelli Point
While all the other formats are owned and managed by Feltrinelli, this is the new franchise concept that was introduced in January 2011 and now consists of 12 stores, with many more in the pipeline. Franchisees, who are mostly former independent booksellers, work on their own account but have access to all of Feltrinelli’s services, including price promotions, Carta Più and extensive marketing activities.

Giangiacomo Feltrinelli Editore
Founded by Giangiacomo Feltrinelli in 1955, GFE soon became Italy’s foremost literary house. Feltrinelli was both an enthusiastic publisher and a left-wing political activist turned terrorist. He died in 1972 in Segrate near Milan at the age of 45, apparently killed by his own explosives while on a terrorist operation. Rumours circulate to this day that his death was not an accident. As a publisher, Feltrinelli always promoted the avant-garde and supported new literary voices. He discovered Doctor Zhivago by Boris Pasternak and published it in 1957, despite strong opposition from the Soviet government. In 1958 he landed another coup with the publication of The Leopard by Giuseppe Tomasi di Lampedusa. Today, Milan-based GFE is the leading light among the few remaining independent publishers in Italy, with a list that comprises both classic and modern Italian and international authors, among them Michael Ignatieff, Henry Miller, Katherine Mansfield, Michael Morpurgo and Anna Funder.