>> hello and welcome "inside fendi." over the next 30 minutes bloomberg brings you behind the scenes of one of the most iconic italian fashion houses, fendi, meet the c.e.o. in 1925, two italians opened a fur and leather shop in rome. their names, eduardo and adeli fendi. the maptle passed to their five daughters and it's there the fendi story really begins. under their watch, the company grew into a multinational luxury brand, although they had some help from this man, karl

lagerfeld. in 1965, as a young designer, he joined fendi, stripping the lining of its iconic furs and slimming them down with new, innovative techniques. his collaboration with the company continues to this day. but it took a fendi to create the planned's most successful product, created in 1997 and bought by the millions, the beget bag was designed by celia fendi. four years later the biggest change at fendi in its history. frenching luxury powerhouse bought a 90% stake in the company. it's now run by a c.e.o., celia fendi is still creative creator of accessories and men's wear. with the younger generation in the ranks thinks the company is very much a family affair and its heritage strong. like all luxury brands fendi's heritage is crucial to its appeal.

modern day consumers are interested in buying not just a product but part of a story. a sign of authenticity. luckily, history is something fendi has an abundance and the c.e.o., peter bicari treasures. >> the luxury brand, the difference from other brands is the way you tell stories, the customer doesn't want us to buy a product. >> they want history and heritage and a lot of customers want this made in italy. tell us the story of fendi. >> it's a particular brand because it was born by the genius of adalia fendi in 1925, a very courageous woman that started a luxury company by working on fur and then from 1925-1938 we started doing bags and then from this small daughters of fe -- five daughters of fendi. it's a brand started with a

woman and continued by women. they take over from the mother and are the revolution idea involving a young designer, at the time, very young, karl lagerfeld was just a very, let's say he had the symbol quite heavy, around the display of luxury and karl was coming with crazy ideas and these five geniuses, we call them as they are, were presenting to him everything you could imagine. he was's coming with ideas and they were making these crazy ideas possible and real to their genius. >> it's amazing because you basically have the daughters of the founder who is also a woman and the five sisters are craft women. >> each of them, there was a vocation one and the fur expert they creative one, and

were co-creating with karl. >> let's go back in time and explain to me the relationship karl lagerfeld had with the five sisters, they'd love it say i want to wear this or do this and he said yes or no? >> to give you an example, he was blending, i need a picture of the fields in winter because i like to have these effect for the new fur on the new season which is just a picture. >> this is one of the sisters? >> this is karl and he gave the picture to the sister and the sister, they had two weeks before an event, something that looked like the fields from new and they invented a technique and everything was a huge success and this is an example to tell you he was coming with provocation and ideas and they were making these crazy ideas possible and real to their genius.

>> of course it's not just about heritage, you need products. fendi's two biggest sellers are its furs and bags. one bag in particular stands out from the crowd, the beget. >> created in 1997 quickly became its biggest seller and i spoke to the creator, a member of the fendi family, about how she came up with the idea. >> everybody was crazy about that special bag and was kind of a fever. i am the creative director of fendi and also the granddaughter of adede fendi who was the founder of fendi in 1925. silvia. i invented the fendi beget and it was needed at this time and it was called beget because it has a short strap.

you wear your bag under your arm like the french bread. there are many versions and i think today with its more than 1,000 versions of baguette. i was so happy when i saw the baguette on the side of jessica parker doing "sex in the city." and of course everybody was crazy about that special bag and it was kind of a fever. for the 15th anniversary last year, we added beautiful books with many of them an iconic baguette and so people now are really in demand of some iconic and vintage baguette. which we are seeing now. >> coming up -- >> the f.s. is not for fendi? >> a fun fur was something invented by karl in 1965. baccari takes me on a

tour in the flagship. >> like it's the first time. >> living legends and more as we go "inside fendi."

>> for many, milan springs to mind as home of italian fashion. for fendi, it is rome.

it was here almost 90 years ago, eduardo and adele fendi set up their small workshop making furs and it's rome where the company plans to stay. it's not just a home for fendi, the italian capital is a source of inspiration. >> we're home with these monuments and beauty you know rome as i do, it's unbelievable and you discover a new piece you didn't think exists. it's richness is transmitted to the creative people living here and this city gives us so much. >> rome is very important for fendi and rome can be considered a source of inspiration for my work and for and if you're a creative person, rome gives you inspiration in every corner. every day when i walk from the house to here, i notice

something i didn't notice before and every rome has a story. >> it is visited by millions every year so to say we're from rome, it's a part of italian lifestyle and is a marketing restored something -- >> lodce vita. >> one of the most visited monuments in the world, we restored the fountain to give back to the city which gave us so much inspiration, to state the link good rome and fendi. >> we like to think fendi is linked to rome and are proud to be rome and when we heard something was falling from the fountain, we had to do something. >> we forget fashion because of the heritage and because of the

fendi mission is very closed basically to its cultural roots, is that right? it's have responsibility, a responsibility for what we do because people look at that as we are very visible. and to help when you can your whole city to be better to the eyes of the people that come and visit worldwide, i believe it is powerful, the strategy. we are lucky enough we can afford it. >> with so much invested here, it's probably not a surprise that rome is where fendi has its flagship store. inside, the fendi design philosophy extends further. i found out when the c.e.o. pietro beccar isks took me on a guided tour. so this is where it all happens. >> it is very good and cool for

young and in becoming people, it is very good. >> we talk about brick-and-mortar online but this is essential for the look and feel of your brand and for example is one of the things that appeals to the young. >> absolutely. bed bag, at we call a a name you attach to your beautiful fendi bag. >> we have to have a look look at the baguette, it's an iconic bag. >> it's the first bag and it's still there and its beautiful lor range still one of our bestseller. >> this is a baguette because i can wear it like bread. >> the ff stands for? >> fun fur, something invented by karl lager in 1965. the beauty of the story that -- an give,

[inaudible] all this is sewn by hand. all this has been sewn by hand. all that gives the effect. >> how long would that take? >> all day. three days, four days. women ay we shop, more buy themselves because they earn more? >> i think so. because they are independent and choose what they like. >> you heard the heritage, you've seen the store but fendi has something even more important, a relationship that has lasted 50 years with one of the most famous men in fashion,

karl lagerfeld. >> with karl we work together many years. he's been working with my family for six years and every time it's like the first time. >> the ff stands for fun fur, karl lagerfeld coming on board in 1965 and turned it into a fun object. >> he loved to work at night, maybe because in the morning he wants to be by himself thinking. he's a genius. he's someone that is full of interest. maybe that's why -- that's how i learned to be curious about life. he knows everything. he has a great knowledge. he's one of the most cultivated persons i've ever met in my life. but what i most like of him is that he has a great sense of humor. >> when karl was coming,, i just tell you a little episode,

he was like a party, and they would dress up like comedians and they would do theater. there are films about it, images you can see if you want and basically to celebrate his birthday, they would create a comedy and act on a stage for him. so they would train for weeks in secret, you know, to make him happy. he was really, and he is still today, when he comes, he is a party. >> he comes with images and he comes with ideas and he gives you challenges. and at that time he was on the plane coming from paris to rome and he saw all these fields. >> he said, i like to have this effect on the new furs for the new season which is just a picture. then he gave the picture to the sisters and the sisters had two weeks before the event to invent something that looked like the fields that he saw from above and they did. in fact, they invented a new technique. >> that's how the shaped fur

was born. now today it's something normal but it was just because he took a polaroid from the airplane. >> when they hired him, there was a very filmlike episode that i would like to tell you. they went, all five, to paris to make -- sign a contract and sign to fendi in 1965. they were invited to his apartment and he wasn't at home and they sat on the stairs of this beautiful apartment in paris. and the lights every five minutes went off so one of the sisters sitting, all three or five on the stairs would stand up, turn on the light and then sit down again. they waited for him for hours. and karla fendi told me again, we should have understood our destiny was to wait for this man. karl is always late. >> coming up, the markets that matter. >> i would be lying if i told you the chinese are not important for us.

the chinese are a very important clientele for any brand. >> and the changes hitting the fashion industry. >> i believe the interest brought a lot of transparency into the way a brand is looked at. you cannot lie anymore. >> more, "inside fendi" next. ♪

>> welcome back to "inside fendi." over the past decade, the rise of china has meant big business for luxury brands, especially italian luxury brands. so how much has this influenced fendi's design? >> the brand has a strong personality so you want something you like, something you think is right for the brand and then you want to sell it worldwide. so we are not here to concentrate on the differences but rather on selling something you can find everywhere. so that's a little bit of our side. >> the style is global. >> yes, absolutely. absolutely. so definitely there are some differences and you can respect them but you see the chunk of the message of the creative team wants to give has to be respected worldwide because they think the collection is something and would be fitting that the collection to the store would like designed and not coherent in a way. >> what's the most important market now and what will it be

in six years? >> i think europe is very important, china is very important. the global market is very important to be honest with you and there are areas of growth everywhere. i would be lying if i told you that the chinese are not important for us. the chinese are a very important clientele for any brand, and chinese doesn't just buy in china anymore and do the bigger chunk of sales elsewhere in the mainland. so it's very important to create a stronger feeling in europe, invest in europe in restoring a store and in milan, we moved and we moved up and moved in to be close to chanel and are relocating and investing in strong cities like london and we look for london in the first of may in 2014. it's very important to be strong in europe because the brand originated there and in 10 years understand it very well so when they come to europe and visit the cities, they want to see how powerful

or mighty the brand is. i believe the investment we spoke about before in stores, it is very useful for that. >> and i guess the big difference in the last five years is that a lot more people buy traveling. >> yes, absolutely. there are a lot more people traveling, not only the korean, traveling, hong kong, thai clientele is very important, brazilian clientele is very important, too. lots of people traveling and visiting big cities and bigtime for sure. >> we talked about the history of fendi. how important is the made in italy for the emerging markets. >> very important and something that speaks about the guarantee of the long lastingness of the products or the creation of the product. i believe there are not a lot of companies like fendi who can claim they are proud and the difference in the eye is that every single piece of any product of fendi is done in

italy. so this is very important for us and it will be so in the future because made in italy is a guarantee of quality, a guarantee of our brand as we discussed how important it is. fendi is not only italian but a roman brand and we are in a recent initiative stressing we are from rome. it's very important for a customer to feel they can come to an italian house. >> finally, while fendi may be wrapped in heritage and tradition, no company can avoid looking forward. >> we are working on the three elements that make the company successful, the content of what you see in the store, the container of which we are in the store and the communication is the little bit of magic that makes wings fly, nowadays the company invests a lot of money in the store, in great architects because when you come into a store, you have a feel and a brand is not anymore

a part of us as we said before. >> is it selling a dream or a lifestyle? >> a lifestyle, a dream, your way of seeing your tastes, you want to give them a feel of your tastes. >> so what are you trying to achieve with fendi, what audience are you trying to capture? >> we have a great tradition of clientele and are appealing to a younger type of customer and therefore our range of prices is quite bold and we appeal with accessories and recently we did something called bed bags which are these fury monsters you attach to your bag and this is a type of appeal, very cool and for a young audience. and at the same time, of course , keep and cultivate our clientele with more products and therefore being the climate

and luxury of fendi. >> how do you marry online or technology with luxury? this is something a lot of c.e.o.'s say they struggle with because i need an online presence but if i'm seen too widely, i lose that edge, that aspect luxurious [ >> it is not more of an issue because in the era of instagram, everything is immediately everywhere, it's not a feel we may afford to have any more. i believe the internet brought a lot of transparency into a way fendi is looked at because you cannot lie anymore. you are transparent in what you do and what you've done and to which prices they're sold and the assortment. so i believe this is healthy and in a way brings up the level of competition to even more fierce level. >> so whether it's appealing to a younger audience, or cementing its online presence, fendi is a brand that will continue to look forward while

keeping hold of its very traditional roman roots. thanks for watching. we'll see you next time. ♪

>> from studio 3 in san francisco, welcome to "bloomberg west." every weekend we bring you the best of west, the top interviews of the powerful players in tech and media to our top story, it's one of the biggest events, the mobile world congress in barcelona, spain, among those in attendance, tom wheeler flew to barcelona days after f.c.c.'s decision to subject the internet to more regulation. brad stone caught up with the chairman.