Building a retail network remains a top priority for Italian fashion brands gearing up for Milan Fashion Week, running Sept. 21 to 26.
Eager to capitalize on brisk tourism and an ongoing thirst for luxury goods, executives are looking forward with renewed optimism, boosted by strong sales in the first six months of the year.
Despite challenges facing the Eurozone, the instability of financial markets, pricy raw materials, high unemployment and political turmoil in North Africa and the Middle East, designer powerhouses in Milan continue to grow, benefiting from buoyant sales in emerging as well as established markets. Case in point: Europe and Italy itself, which have shown strong increases this year.
“We are pleased with the robust growth we achieved in the first part of the year, with a 14 percent increase in Western Europe supported both by local clients and tourists, especially from China. Italy is absolutely in line with this regional trend,” said Patrizio di Marco, Gucci’s chief executive officer.
In August, the company renovated its Via Montenapoleone store in Milan and its Florence boutique on Via Tornabuoni, according to creative director Frida Giannini’s blueprint. The first will reopen with a special event on Sept. 21, during Milan Fashion Week. At the end of the week, Gucci, which is celebrating its 90th anniversary this year, will reopen its Florence flagship and unveil the new Gucci museum in that city.
“The positive momentum the brand is now experiencing is, I believe, a direct result of the successful fine-tuning of our business strategy over the last two years,” continued di Marco. “This has reflected a continuous focus and respect for Gucci’s heritage and icons, giving new life to evergreen products and an ongoing emphasis on quality, with an increased attention to the most precious materials and special finishes.”
Michele Norsa, ceo of Salvatore Ferragamo, said the company, which went public on the Milan Stock Exchange at the end of June, saw “an extraordinary growth in Europe, which is even more surprising than gains in Asia and China, which were expected.”
He said sales in Italy rose 30 percent in the first half, lifted by a flow of tourists “from all over the world,” which he doesn’t expect to slow down. Ferragamo, said Norsa, has continued to invest in its own stores, restructuring where needed, as with the men’s wear boutique on Via Montenapoleone, which reopens today, or opening new banners around the world.
Norsa said Ferragamo has “the advantage of being a big brand with international visibility,” but that the Florence-based firm has “worked intensely on the product over the past 18 months,” also referring to the expanded duties of Massimiliano Giornetti, former men’s wear designer for the brand, who was promoted to creative director with the fall 2010 collection.
“The year 2011 was a positive one for us, and we saw a 40.1 percent increase in revenues in the first six months. We are tied to the stock market, but July and August went well,” said Norsa. At press time, Ferragamo shares had grown more than 26 percent from their debut on June 29. “Our listing has been welcomed warmly, and I think it can set an example and be of comfort to others that are considering an IPO.”
The company will also present its first line of high-end jewelry in collaboration with Gianni Bulgari in Milan on Sept. 21. In a rare category expansion for Ferragamo, the Florentine house has partnered with a member of the famous family of Roman jewelers who founded his own jewelry company, Enigma, in 1989 after spearheading Bulgari’s international expansion in the Seventies and early Eighties.
Vittorio Missoni, chairman of the family-owned Missoni firm, concurred that his brand closed “an excellent summer,” with company stores performing “extremely well,” especially in tourist locations ranging from Portofino, Capri and Positano to Venice and Rome.
“Sales were above our budgets, up 20 percent compared with summer 2010,” said Missoni, noting that it’s not necessarily the number of tourists that has grown but the quality of visitors. “We are seeing more qualified tourists now.”
Despite the increased costs of raw materials, the Italian company did not raise its prices. “We’ve paid more attention to costs and avoided hiking our tags,” he said.
Missoni was especially concerned, however, about the reverberations caused by financial market instability.
“When there’s news that shakes the Bourse, as happened in August, there are fluctuations in consumer spending that are mainly caused by psychological issues,” he said. “I just hope the Bourse does not hold too great an influence, given that the season started off well and that there are positive prospects for the future.”
Missoni explained that “Germany is doing very well, the Middle East is stable — wars notwithstanding — both Russia and the U.S. are strong, but it’s difficult today to make forecasts in the long term.”
As for China, he noted that “bigger groups” have an advantage to expand in that area, as smaller companies don’t have strong structures to easily support extensive development there.
Adding to the upbeat reports, Aeffe chairman Massimo Ferretti noted, “We believe we can close the second part of 2011 with growth, considering our orders for fall 2011 posted double-digit gains and that our retail division also continues to perform well.”
Aeffe produces collections for Alberta Ferretti, Moschino, Jean Paul Gaultier and Cacharel.
Roberto Cavalli ceo Gianluca Brozzetti also yearned for more stable markets, adding that the economy hasn’t stopped the company from investing in its retail network, buying back franchisees in Rome and Venice, renewing its Florence store and, most recently, opening its first flagship in Tokyo.
“We are still a relatively small company, and we see huge potential to enter markets where we are not present yet,” said Brozzetti. Cavalli is also expanding its product offer with new categories, from shoes to perfumes, which allow “greater visibility,” he said, and new, reformatted stores are designed to better display this more extensive range. While remaining cautious about the Eurozone, Brozzetti described his mood as “optimistic, with a dose of realism.”
For Versace, 2011 was a “great year,” according to ceo Gian Giacomo Ferraris.
“We’ve recharged the company and we foresee a return to profit by the end of the year, despite the economy,” said Ferraris, who was tapped in 2009 to turn the company around.
Next year will be even more satisfying, he projected, as the strategies he has set in motion are due to generate growth in 2012, from the creation of the Young Versace line to bringing back production of the Versus line in-house.
“These were costs in 2011, but we will reap the rewards in 2012,” he said. This season, both the signature line and Versus will show at the company’s historical Via Gesù headquarters in Milan. Ferraris was also pleased with results at retail. As of Sept. 6, daily retail revenues at Versace stores in Italy were up 16 percent on a same-store basis and 20 percent globally. In the second half, the company is set to open shops in cities including Kuala Lumpur, Singapore and Manila, and four more units in China.
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