"Fashion is like energy: it can’t be created or destroyed, only transformed. It used to be that people bought clothes out of necessity; now they do it for the thrill.” With this observation, Juan Carlos Amich, founder of Amichi, kicked off the most recent session of “Family Businesses of the 21st Century: Challenges and Opportunities”, the 11th lecture series organised by ESADE Business & Law School in collaboration with Deloitte. Mr. Amich noted that his company’s history is “the history of the Spanish textile trade over the past 50 years”, before declaring: “Amancio Ortega was our firm’s great teacher. We should be proud to have a businessman like him in our country.”

After working for various companies, Mr. Amich purchased a wholesale textile business in the early 1980s. “It was a ‘cash and carry’ where we replicated the models we had seen in London and Paris,” he explained. “We assumed the risk of accumulating stock. This is what allowed us to go from a 6 million peseta investment to profits of 36 million pesetas in the first year.” Part of the firm’s success, he argued, was due to external factors: “Colour television and the strength of prêt-à-porter, which was wiping out the dressmakers and tailors”. But more importantly, there was an internal factor: “Over a six-month period, we opened ten stores with well-known women as partners. They were as involved as if it was their own business.” But it wasn’t until several years later, after returning from a trip to Italy, that Mr. Amich decided to unify his establishments under a single firm and, in his words, “invent the ‘branch concept’ in Spain”.

Then came the franchise system, although it didn’t work very well in the beginning: “Some franchisees thought that the clothes would sell themselves, but it wasn’t like that. For a clothing store to succeed, the owner has to be at the helm of the business, with passion and enthusiasm.” In contrast, importation was a crucial factor from the outset: “In 1982, we started travelling to Asia. In the beginning, they didn’t know how to manufacture and we didn’t know how to purchase, but even so, the margins were huge.”

From generational turnover to the search for financing for expansion

By the 1990s, Amichi was dealing with a new obstacle: shopping centres. “That’s what finished off the shops in small and medium-sized cities. They couldn’t afford the cost of rent in those places. Negotiations with shopping centres were an all-out war.” And then the second generation of the family came to power in the company. “That’s when we went from buying what the wholesalers offered us to going out to look for what we wanted. The purchasing department, which my daughter had taken over, soon became the design department, and this helped us become an affordable luxury firm,” commented Mr. Amich. The family completed its generational turnover process in 2006.

The next milestone in Amichi’s history was quite recent: “Three years ago, we realised that we needed a partner in order to carry out our plans. For the first time, I had to go out looking for money, and I found it in the Black Toro fund.” In total, the company secured €15 million with which to add 40 new brick-and-mortar stores to its existing total of 150 locations, with the aim of doubling its sales over a three-year period – a firm commitment despite the threat posed by the digital distribution giants. “For a textile business to work, online sales should be complementary, not the core of the business,” commented Mr. Amichi.

Major threats to a family-run business

“Jealousy, envy and arrogance are the three main threats to any family business,” explained Mr. Amich. Companies should counter these threats, he argued, not only through protocols but also by taking into account three fundamental pillars of management: “The leader shouldn’t simply be appointed but rather should gain authority steadily; the next generations should work outside of the company; and in order to be respected, first you have to respect others.” He concluded: “Professionalisation is also essential. In a family business, you can’t have more or fewer governing bodies than in any other company.”

The session also featured the participation of Fernando Ruiz, President of Deloitte, and Pedro Navarro, Deputy Executive Chairman of the ESADE Foundation Board of Trustees.