The choice: become ever stronger where you are already strong. Marketing will follow.

In Italy in the 1960s there was a TV programme called “Non è mai troppo tardi”, It Is Never Too Late. Its host was a teacher, Alberto Manzi, and it taught adults who had missed school to read and write. It aired from 1960 to 1968, almost five hundred episodes, in the early evening, when people came home from the fields or the factories. It changed Italy, or at least helped to: never too late to learn was much more than a slogan.

Talking with family luxury companies, I often think the opposite. It is never too early to choose your own road. Too early does not really exist. What exists is the time spent not deciding, which later turns out to have been too late.

Fedeli started in 1934 in Monza, as a small business making felt hats. Today it is a knitwear maker specialised in cashmere that sells under its own name in sixteen shops across Italy, France, Switzerland, Korea and the Emirates, plus about three hundred and fifty multi brand points of sale worldwide. It has turnover of thirty million euro, double what it was ten years ago, when it stood at fifteen, it has over a hundred employees, and it is still led by the family: Gigi Fedeli, third generation, in charge since 2008, with his son Niccolò, fourth generation, who joined in 2016. In 2023 Prada and Zegna each took fifteen per cent of the capital, to protect, as they wrote in the official press release, the know how and tradition of an Italian excellence in fine yarns. The Fedeli family kept seventy per cent and the command. It is not a billion euro group. It is a family SME of real size, which made exactly the journey I want to talk about, and that is why it is worth more than a front page case.

Many family SMEs that work for the big houses ask themselves the same question sooner or later: why keep making someone else’s product, when we could sell it under our own name? It is a legitimate question, and Fedeli shows the answer can be yes. The point is not ambition, which is almost always there. It is that almost all the companies that try skip steps, do them in the wrong order, or think there is only one way to grow the business, when there are several, each with a different price to pay. They treat an industrial transition as if it were opening a bar, which takes money from day one. It is not. It is closer to planting a vineyard: the first good harvest comes only after years, and meanwhile the vine must be tended, not left to grow by itself. There is a precise sequence to follow, and inside that sequence a choice to make with open eyes, and these matter more than talent or the simple availability of capital.

The typical attempt always follows the same script. A shop is opened under the company’s own name, downtown or in a luxury outlet, before anyone knows whether the collection holds up: the shop costs rent and staff, and if the product is no different from what others already make, it stays empty. An advertising campaign is launched, a photo shoot, a few trade fairs, in the belief that the problem is being known: but communicating a product that nobody has yet validated only means spending first, not selling later. A famous name is hired as creative director, hoping that the signature will buy the credibility the company has not yet built by itself: it rarely works, because in luxury credibility shows in the product, not in the CV of the person who signs it. And the company tries to enter the big international department stores at once, skipping the pilot phase, taking orders that production then struggles to deliver while staying loyal, at the same time, to contract manufacturing. The basic mistake is always the same: the birth of the brand is treated as a marketing choice, a shop, a campaign, a name, instead of an industrial sequence, which starts from the product and from real demand, not from its staging. Behind that mistake there is a deeper one: not having patient capital, willing to wait without demanding an immediate return. Whoever lacks it chases quick results, and quick results almost always cost a compromise: on the collection, on the price, on the channel, on who signs it. That compromise, not the quality of the product, is the true premise of failure.

The first step is to recognise whether you are really a credible candidate. Not everyone who does their job well is. You are if you already work in the highest tier of your segment, to the point of being a name that two big houses are willing to finance rather than lose, as happened with Fedeli. You are if you already have, even hidden inside the production department, a team able to propose a garment from scratch, not just to execute someone else’s sketch well. You are if you do not depend on a single client for most of your turnover, because a brand that is born blackmailable by whoever feeds it starts out weak. You are if you have healthy margins on contract work, not razor thin, because the brand is financed at the start with the surplus that existing production generates. And you need, inside the company, someone willing to move from a risk they know well, delivering on time what the client ordered, to one they have never managed, guessing what the market will buy before producing it.

The second step is to know your scale, honestly. To sustain contract work and brand investment in parallel, without one weakening the other, realistic turnover sits between eight and twenty million euro, with the most solid point around ten to fifteen. Fedeli, with thirty million and a hundred employees, is already at the high end of this range, not beyond it. The same goes for Gallo, which in 2024 had the same turnover, thirty million, but with a bigger structure, over two hundred employees. Below the threshold, three things are almost always missing together: the surplus to reinvest continuously, the organisation to support a real product team, and the production capacity to serve several important clients without depending on one. Above thirty or forty million, the company has usually already taken other roads, such as the direct acquisition I discuss further on.

The third step is the most delicate: deciding how to finance the transition without losing what you have built. But before getting there, the product choices must already be clear, because only a company that knows what it wants to sell, and to whom, becomes interesting to those who bring capital. That done, the honest thing to say is that there is no single right way to finance the transition. There are several: I describe three, chosen because behind each there is a real and verifiable case, not because they are the only possible ones. None of the three is objectively better than the others. It becomes so only according to what the family is not willing to lose.

The first road is to take capital while staying in the majority. This is what Fedeli did: two industrial partners, not pure financial investors, at fifteen per cent each, in exchange for skills and relationships that would have taken years to build alone. It buys time and credibility. It costs a governance to negotiate well from the first contract, because a badly written minority can become, over the years, much less than a minority.

The second road is to sell the majority, but negotiate to stay in operational command. In June 2025 the Colombo family sold seventy per cent of Gallo, the hosiery company from Desenzano del Garda that in 2024 had turnover of thirty million euro, against twenty three in 2014, with over two hundred employees, to Alto Partners, an Italian fund, to finance the international expansion of the brand. Giuseppe Colombo, third generation, kept only thirty per cent, but remains chairman and creative director. This road buys real capital and management capacity that a family alone often lacks, in exchange for ownership of the majority of the company. It is the most exposed of the three to this risk, but the rule holds for all: the result always depends on how well the agreement on the powers that remain with the family is written, not on the road chosen in itself. Della Valle, for example, chose a different road: in 2024 he sold a minority, 36%, keeping 54% and the command of Tod’s, a path closer to Fedeli’s than to Gallo’s. For Gallo, instead, it is still too early to say how it will go: 2025 does not yet have the hindsight that Della Valle’s choice has already matured.

The third road is to let nobody in. Oscalito, the Turin knitwear company of the Casalini family, has remained entirely theirs since 1936, now in its third generation: Dario Casalini has led the company since 2013, according to what Oscalito itself says. No funds, no industrial partners. The numbers, however, do not tell a story of linear growth. In 2014 it had turnover of ten million euro, with ninety employees. Ten years later it has turnover of eight million four hundred thousand, with seventy seven employees: less, not more. In the same decade Oscalito pushed exports from forty to seventy per cent of turnover, and built from scratch a second brand, designed for customers more attentive to sustainability, now sold under the name Natyoural. From the outside one cannot say whether the drop in turnover is the price of this groundwork, a reorganised supply chain, a second brand built rather than bought, or simply a weak phase not yet overcome. What can be seen with certainty is the general price of the third road: a much smaller scale than Fedeli or Gallo, and growth that, when it comes, stays what the surplus of the business alone can generate, nothing faster. Whoever chooses this road buys time and the freedom to decide alone. Guarantees of growth, however, do not exist on any of the three roads: what changes is only who, in the end, decides to run the risk.

Whoever does not want to touch equity in any form has also a fourth option, simpler than the first three: the minibond. Zero dilution, no new partners at the table, just a debt to repay with interest, suited to those who can bear fixed instalments even in a year of weak turnover.

The real risk, whichever road you choose between capital and equity, is never the outsider who comes in. It is the contract signed without reading it to the end. Etro shows it: according to what MilanoFinanza reported, it had kept a minority stake in 2021 and by the end of 2025 no longer had it: the family would have left altogether the house that carries its name.

The fourth step is to accept that times are long, not those of a commercial. In the first one or two years it is a matter of a pilot collection and selective distribution, while most of the turnover stays on contract work. Between the third and the fifth year a real sales network is built. Only between the fifth and the eighth year does the brand begin to generate margins comparable to those of contract work. The capital that almost everyone underestimates is not that of the first collection, usually one hundred and fifty to four hundred thousand euro. It is the stock that accumulates in the following years, one to three million euro cumulatively, because in contract work the risk of unsold goods belongs to the client, while in your own brand it becomes yours.

The fifth step, and it comes last on purpose, is to evaluate acquisitions. For an SME they do not mean buying an international competitor: it is exactly the same logic used, on an enormously larger scale, by Zegna when it bought Thom Browne or by Prada when it bought Jil Sander and Church’s, but applied at a size within reach. Buying a small local distributor or a showroom with active buyers gives access to the market that alone would take years. Buying a historic house of your own territory, in difficulty but with a recognisable legacy and nobody left willing to finance it, gives a story ready to graft onto the production quality you already have. Buying another contractor with a complementary skill, the neighbour who does the finishing or the dyeing that you lack, consolidates the supply chain and increases the value for the client. But doing it before generating a real surplus, and before validating the pilot collection on the market, is a mistake of timing. It is one of the reasons why many companies fail precisely in the project of creating a brand and making it grow, not for lack of quality, but for the wrong timing. The same risk, on an enormously larger scale, Prada narrowly ran too between 1999 and 2001.

The companies that make it, in luxury, always follow the same order: search for excellence, patience, and only at the end, capital. Prada and Zegna entered Fedeli, and Alto Partners entered Gallo, not to finance an idea, but to enter an excellence already built. Oscalito built that excellence alone, without looking for anyone. The real mistake, in luxury, is not choosing one road instead of another. It is looking for capital before deserving it. It is never too early to start, in the right order.