Ferrari Opening a Theme Park in North America “Eventually”
It's a part of becoming a proper luxury brand. Somehow.
Bloomberg reports that Ferrari is planning a theme park in North America “eventually,” part of the carmaker’s non-automotive efforts to leverage the value of the 69-year-old brand to create long-term revenue streams. If it were to happen in the near future it would be Ferrari’s fourth theme park after Ferrari World in Abu Dhabi, Ferrari Land opening in Spain this year, and a third just announced last month in China in partnership with Chinese state-run automaker Beijing Automotive Group.
Ferrari admitted as much in its IPO filing last year, writing, “In the long-term we aim to open one theme park in each of the main geographic areas where we operate, including North America.” We shouldn’t be surprised if we get a more detailed announcement soon, though. Ferrari signed the agreement to open the park in Spain in 2014, two years later it’s nearly here, while the China deal came quickly after the IPO reveal.
More importantly, Ferrari is keen to plump up licensing revenue with just these kinds tie-ups; Ferrari posted record car sales in 2015 with total profit up nine percent, its SEC filing said 15.5 percent of total revenue came from “Sponsorship, Commercial, and Brand.” However, Bloomberg figures pure licensing fees separate from the Formula 1 team’s sponsorship and commercial deals to be less than one percent of that revenue.
That’s considered a problem because its entire spin-off from Chrysler was cast as a chance to position itself as a luxury-goods company that happened to make cars. The first six months have been a challenge. Company president Sergio Marchionne installed a new branding chief in September. The stock closed at $55 on its first day of listing October 15, 2015, that dropped to $43.97 on April 15. Marchionne admitted last week that some of the licensed goods in its own stores “are not what I call a luxury brand extension.”
In July last year analysts gushed, “[Ferrari] should trade at a premium to most car makers, given its strong brand and licensing revenue.” Eleven months later the quotes are, “Ferrari has an identity crisis. They told the world they are a luxury-good company so they should start behaving like Hermes…. It’s not about selling T-shirts or caps.” The carmaker’s first shareholder meeting as a standalone company is being used to revamp the board with the appointment of luxury sages like Delphine Arnault of LVMH and Adam Keswick of the Mandarin Oriental Hotel Group’s parent company. After just six months, Bloomberg says there’s “pressure on the new board to reset strategy” at the same time traditional luxury-goods makers are being squeezed by the slowdown in China and European security fears keeping big spenders away.
There are hurdles, but we have a feeling Ferrari will get it right – “eventually.” It is increasing car production, which will lead to more revenue, Ferrari World is a success, voted the Middle East’s leading tourist attraction in 2015, and six months isn’t enough time to start an online store much organize a global fashion brand. So let’s have some funnel cakes and grab a ride on the Formula Rossa roller coaster while we wait.
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