Value Creation

When Emanuela Frattini Magnusson started her design firm, EFM, in 1991, she dreamed up an umbrella stand, picture frames, and some leather goods and started taking orders at a trade show—at which point she ran right into quicksand. The pieces she had conceived were simple on their own, but en masse, they were a nightmare of operational complexity. Like so many designers, she had launched a commercial venture yet knew nothing of business. “I was like Forrest Gump,” Frattini Magnusson says, recalling her naïveté.

Despite a successful career that has included such iconic designs as the sky-filled umbrella she created with the late Tibor Kalman for the Museum of Modern Art, the Italian-born, New York–based designer knew that she was missing something. It certainly wasn’t a sterling design pedigree: she is the daughter of the Italian architect Gianfranco Frattini, the wife of the former Knoll design director Carl Magnusson, and an accomplished architect in her own right, with an extraordinary range of professional experience. Instead of adhering to the custom of her adopted country and specializing narrowly, she has followed the Italian tradition of designing at a variety of scales, from buildings to billfolds. Even so, she didn’t know how to calculate overhead or properly price her time. She didn’t even really understand the difference between a stock and a bond. “I always felt I needed a business education,” she says.

So three years ago, at the age of 48, she enrolled in the Executive MBA program at New York University—where, thanks to her photo in the program’s print ads, she became quite literally the poster child for midcareer pros going back to school. She graduated a year ago, and now, in the teeth of a biting recession, she and a classmate have started their own luxury-leather-goods business. Only this time around, she didn’t just blithely dream up some products and hope for the best. “I have a much better understanding of the process of value creation,” she says.

She is putting that understanding to work at Manù, her new venture, which dispenses with high-priced stores—and their hefty markups—to offer carefully designed high-end leather goods directly to consumers at Manumanu.com. Its debut collection launches this month. Manù, by the way, is short for “Emanuela.” She also likes it because it suggests “handmade” (as in manual), while the M echoes Kalman’s M&Co. and the first name of her partner, Marco Barcella, who is Manù’s chief financial officer and cochief executive.

Designers start little firms all the time. What’s interesting about this one is the way the consciousness-raising experience of business school helped shape it. In school, Frattini Magnusson and Barcella analyzed luxury-goods companies for an assignment, and once they decided to go into business together, they did things few designers do: conducted market research and drew up a full-blown business plan for themselves and the investors they hoped to attract. Since the partners have no outside funding—and undercapitalization is a leading cause of business mortality—Manù was structured so that it could function without much capital. The partners keep a small stock of just a few standard items in basic colors ready to ship immediately. By working with both Spinneybeck, a leading supplier of Italian leather that boasts some two million square feet of inventory, and an outside fulfillment company, Manù is able to offer a high degree of customization—including a palette of bright modern colors—and turn around orders in six weeks. (Frattini Magnusson and Spinneybeck were hardly strangers, the former having designed the latter’s headquarters near Buffalo, New York.)

The goods themselves are classic looking, functional, and leavened by wit. For $450 you can get a nicely proportioned market basket done in hairy cowhide, with sexy hardware expropriated from the legendary Porsche 356 convertible. There are also wallets, bracelets, handbags, and carry-on satchels, all handmade by New England craftsmen. The goal, the partners say, is to pour into product resources what might otherwise have gone into retail markups, inventory, or administrative expenses. “The idea behind Manù’s products,” says Barcella, “is that they synthesize quality and essential design and combine it with a lean and strategic business model that allows us to offer them for a lower price point.”

As was typical in her day, Frattini Magnusson learned nothing of business as an architecture student—a tradition that, for better or worse, is changing as design schools increasingly incorporate business courses (see “It’s Not Business as Usual,” May 2008). Gail Zauder, a veteran luxury-industry investment banker who is now the managing partner at Elixir Advisors, says she’s not so sure business education is essential for designers. What matters is that someone in the firm—the designer or a strong partner who has been involved from the outset—understands how business works. “The ones that succeed,” Zauder says, “have a right brain and a left brain.”

Manù seems to have both. But Frattini Magnusson very much believes that business savvy is something designers shouldn’t merely hire or associate with. “Nothing happens in life unless there is this ability to make it financially viable,” she says. “Resources are not infinite.”

Categories: Uncategorized

Comments

comments