LONDON — Firms from fledgling fashion companies to established luxury players gathered to discuss the challenges of protecting their assets, image and brand name at the Luxury Law Summit here.
The event, which was organized by The International New York Times and The Global Legal Post, touched on issues that spanned managing the ever-evolving worlds of technology and social media, nurturing emerging brands and differentiating a label from its competitors.
Gianni Versace SpA’s chief executive officer Gian Giacomo Ferraris, who gave an impassioned speech about protecting and developing the Versace brand, was unequivocal about the importance of guarding a label’s identity. “A company’s brand, especially in the luxury goods industry, is its most important asset, bar none,” he said, relating that when he joined the company in 2009 “brand awareness [of Versace] was extremely high, but its perception was far from being where it should.”
Ferraris charted how by taking steps such as focusing on Versace’s core fashion DNA — centered around Donatella Versace’s vision — along with streamlining business processes, opening boutiques and buying back its Versus license, the label reinvigorated itself. From heading toward losses of 30 million euros, or $41 million, the label, which sold a 20 percent stake to Blackstone Group earlier this year, is now on track to achieve revenues of half a billion euros, or $683 million, in the current year, Ferraris said.
Now, the label is focused on protecting its brand, particularly through thwarting the efforts of counterfeiters. Ferraris said that he viewed the online trade in counterfeited goods “a little like the Wild Wild West,” he said.
“In this virtual, borderless world anyone…is in the position to escape from the traditional monitoring system,” he said.
To counteract the proliferation of counterfeit goods online, the company is now placing a code in its products, which will allow customers to check their authenticity over the Internet. “IP theft, counterfeiting and the like corrode the brand; they reduce brand equity and have the potential to destroy your business, it’s as serious as that,” he said.
Stefano Rosso, ceo of OTB Group, the holding company of brands including Diesel, Maison Martin Margiela and Marni, said that the firm differentiates its identity from that of other luxury groups by investing in relatively small companies, such as Maison Martin Margiela. He said the company strives to support the labels it invests in.
“The biggest mistake is to try and modify a brand’s DNA. We support brands, but maintain their soul and their core,” he said.
He also related that since Nicola Formichetti arrived as artistic director of Diesel last year, the label has embraced social media, with campaigns on Tumblr and Instagram. But he noted that the digital sphere “can’t replicate the physical world.” In light of that, he said the company uses physical stores “mainly as a marketing tool — it’s an investment to have the right people in the right place,” he said.
Navigating social media as a luxury brand was the subject of debate during a panel discussion involving executives including Daniela Cecilio, ceo and founder of the fashion image recognition app ASAP54; David Sadigh, ceo and founder of Digital Luxury Group, and Mary Huang, founder of the 3-D printed fashion company Continuum Fashion.
“No one is able to crack yet if social media is generating brand equity,” said Sadigh. “If I was a luxury brand, I would think about [social media] twice,” he said.
Cecilio questioned why a luxury label that prides itself on its goods not being widely accessible would be active on social media. “The availability of information is there, but the product isn’t,” she said.
Sadigh cautioned against brands relying on social media to build a database of customers, rather than cultivating their own customer databases. “At some point Facebook’s [growth] will slow down, and they will have pressure from investors to make money, and will start monetizing the interactions between brands and consumers,” he said. “The challenge is for a company to build its own database, and leverage on social media to enrich that database.”