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Going public – in private

Suzy Bibko is editor of Families in Business.

Marilyn Monroe once said, "A career is born in public, talent in privacy". Interesting words to mull over in the context of family business, where both careers and talent are expected to be born and honed in privacy. But what happens when the family firm goes public?

The term 'going public' was once dismissed, usually outright, by many family firms. After all, they were used to a quiet, private life – for both their family and business dealings. To 'go public' would mean just that – to have their once private lives exposed to the public. And while a little publicity might be good for business, the need to keep their family and family business away from scrutiny far outweighed any benefits they might reap.

However, things seem be changing. Maybe because we all supposedly mellow with age, or more likely because legislation and business growth demand it, but going public seems to be more accepted by family firms around the world – though still approached cautiously.

In this issue of Families in Business, we hear from three family firms in different stages of life who have either done an IPO or are considering one. The Jacobson family of MSC Industrial Supply Company is just a second generation-led company, but has built their business into a multi-billion dollar industry in only 40 years. Their growth was initially funded through debt financing. However, to grow the company beyond $100 million and to expand physically, the family decided that an IPO was the only way forward. Rather than agonise over the decision, which would open them up to public scrutiny, they embraced it and moved the company forward. The result has been a $3 billion business, and the creation of two new investment firms, JFI and Nine Thirty.

For the Lopez Group, a fifth generation Filipino family conglomerate, life has been a constant reinvention due to both political problems and family misfortune. But, as the saying goes, what doesn't kill you only makes you stronger. Today, all of the major Lopez companies are publicly-listed and traded companies. The family certainly seems aware of the potential pitfalls of being public, but they work hard to keep a balance between being a publicly-owned company and a private family-managed company: each company is headed by a Lopez CEO, but led by world-class managers.

Lastly, we come to Ferragamo, one of the world's most iconic fashion houses. Led by the late founder Salvatore's wife Wanda, the company has seen significant growth in the past year. Ferragamo is instensely family oriented, with family managing every division of their luxury goods empire – and they intend to stay in control. But, control may be reached via an IPO in the future, according to Wanda. If they are publicly listed, it would be easier to divide the shares among family-and thus preserve the family holding. So, future generations of Ferragamos could have their careers "born in public" after all. Maybe Marilyn Monroe knew more about business than we give her credit for. After all, she was wearing a pair of Ferragamo's in that famous air vent scene in Some Like It Hot.

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