Italian emporium aims to open a store in every capital for its luxury food experiences
Eataly, the Italian food emporium, is planning to list shares on the stock exchange in Milan as early as next year as the group ramps up its expansion in the US.
A mix of an upmarket supermarket, restaurant and food theme park where customers can see mozzarella being made, Eataly is on target to raise revenue by a quarter in 2017, according to Andrea Guerra, its executive chairman. Speaking after returning from the opening of Eataly’s first store on the US west coast in Los Angeles, Mr Guerra said Eataly was on target to post sales of €470m in 2017, up from €380m a year earlier. Earnings before interest, tax, depreciation and amortisation are expected to be about €22m this year.
US sales almost doubled in a year after Eataly increased its stores from two to five in the country, he said. It has two stores in New York, and one each in Chicago, LA and Boston. “We think we can continue to open stores for the next 10 years. We are really scratching the surface. We think we can have a store in every world capital,” said Mr Guerra, who was formerly chief executive of Luxottica, the eyewear maker. He estimated Eataly would reach annual sales of €1bn to €1.5bn in the “short to mid term”. Mr Guerra did not provide net profit forecasts. Eataly made a net loss in 2016.
Eataly was founded by white goods entrepreneur Oscar Farinetti, who still owns the majority of the company. Mr Guerra owns a stake of less than 5 per cent. Tamburi, a Milan-based family office-turned-private equity investor, bought a fifth of Eataly for €100m in 2014. The next move would be to bring in new capital over the next 12 to 18 months “and the obvious road is an IPO”, Mr Guerra said. IPOs in Italy have surged this year as family led small- and mid-sized firms have sought access to new capital as lending has been squeezed during a banking crisis.
The Italian government’s introduction of new tax-efficient savings plans for individuals, known as PIR, aimed at incentivising savers to put their money into Italian equities has also encouraged investment. In the next 24 months, Eataly has plans to open sites in Las Vegas, San Francisco, Stockholm, Paris, Toronto, Verona and, then, London in 2020. Along with the Los Angeles store, Eataly opened last month a 100,000 sq m food “theme park” outside Bologna.
Mr Guerra describes Eataly as a “food experience”. Bain analysts have classed luxury food experiences as one of the fastest growing segments in personal luxury goods. The chairman said Eataly’s most popular event among consumers in Milan and New York is to watch bread being made at 5am, and leaving at 8am with a fresh loaf. “I think the only thing that will get the consumer to take out $50 from their wallet and spend it is emotion,” he said. Mr Guerra spent a sabbatical year in 2016 working as an adviser to former Italian prime minister Matteo Renzi after his decade-long stint running Luxottica. “I never worked in a start-up before. You have to do the strategy and know how to fix the tables in the restaurants as well. It is mentally — and physically — a huge challenge,” he said.