Despite increasing economic and political uncertainty worldwide, Italian designers are sticking with their retail and product expansion plans for spring.
When the going gets tough, the tough get going.
That’s the mantra amongst Italian fashion houses, which are taking a ready, steady, go approach to the marathon week of back-to-back designer shows and presentations that opened here Monday.
In fashion terms, it’s business as usual, with designers working into the wee hours to style their shows, celebrities getting ready to grace the front rows and agencies furiously booking the bevy of long-legged models in town — for instance, Gisele Bündchen is breezing in exclusively for Dolce & Gabbana and Missoni. But these preparations are being made in the face of a deep gloom that comes from a depressed economy worldwide, stock markets that are swinging like yo-yos and winds of war in Iraq that blow stronger each day.
According to Sistema Moda Italia, the association for Italian apparel and textiles, apparel production dropped 4.6 percent in the first five months of the year; textile output fell 7.3 percent and knitwear lost 11.5 percent, against the same period of last year.
To make matters worse, the strong euro-dollar exchange rate has further crippled exports to the U.S. and already down-in-the-dumps consumer spending. Exports of Italian apparel to the U.S., excluding knitwear, dropped 23.2 percent in the first five months, according to Sistema Moda Italia data.
"Long term, I’m very confident that the markets will pick up and I’m very positive as far as luxury goods are concerned," said Domenico De Sole, president and chief executive officer of Gucci Group. "But realistically, we must consider the possibility of a war in Iraq and the depressed stock markets in the U.S. and Europe. That said, we are blessed that we don’t have debts, but lots of cash, and we are continuing what we have carefully planned: retail growth, the expansion of Gucci and the relaunch of our smaller brands."
Marco Gobbetti, chief executive officer at Moschino, painted a similar picture. "In general, I’m not optimistic because the winds of war, the next-to-zero economic growth in Europe and the low-performing stock markets reflect a climate of uncertainty," he said.Giancarlo Di Risio, chief executive officer at Fendi, believes that the first signs of recovery will only be noticeable in the first half of 2003. "And that is only if the risk of a war, and its inevitable consequences, is avoided," he specified.
The scenario is so precarious that, according to Ferruccio Ferragamo, chief executive officer at the Florentine luxury goods house, even a minor event would hurt the convalescing economy. "It’s not difficult to bring back the state of alarm and fear that still fills the markets, and we can’t forget that the purchase of a luxury good is dictated by inspiration, motivation and thought," said Ferragamo.
Italian fashion houses are naturally being cautious about the business scenario worldwide. At the same time, the big picture doesn’t seem to be affecting their performance that much at the moment, with upbeat executives reporting brisk prespring sales. For example, sales for Giorgio Armani’s pre-spring collection rose 17 percent; Moschino Cheap & Chic leaped 60 percent, Moschino sales rose 30 percent, Dolce & Gabbana reported a 40 percent hike and Missoni’s sales increased 15 percent.
Gobbetti attributed Cheap & Chic’s double-digit growth to broader pre-collections and the rise at Moschino to a palatable product. "We went from 60 to 100 styles, all delivered in advance since many retailers have shifted their budgets to precollections," explained Gobbetti.
Prada Group’s chief, Patrizio Bertelli, said that by the end of July, all group brands had raked in as much as 80 percent of the season’s budget. "By now we have fine-tuned our deliveries because, for the industry, it’s the earlier the better," he said. "It took us years, but we got there."
Versace also is banking on pre-collections. "They have become a greater part of our total business and each season they contribute a greater percentage of our total sales in all categories," said a Versace spokesman.
A happy customer is now, more than ever, the priority at Armani. Robert Triefus, corporate vice president of worldwide communications at the design house, conceded that supporting customers’ demands and diversifying the product range — from Emporio Armani jewelry to Armani Casa’s new homewear line — are high on the company’s agenda."You don’t expand for the sake of making more noise, but to help grow the business on different fronts," he said.
Added Gobbetti, "Obviously, whichever the strategy, it has to be supported by a strong product with individuality because that’s what first-line consumers are willing to pay for. Nobody needs another black jacket."
Some might argue that after 9/11, when consumer spending and psychological confidence hit rock bottom, putting a bit of wind back into the fashion sails shouldn’t be that arduous. But as Cristiana Ruella, director of general affairs at Dolce & Gabbana put it, "It’s a challenging and competitive market that can’t be undervalued."
Designers admit they have to run tight ships and are acting on many fronts: retail expansion, delivering consumer-friendly products, trimming overheads, aiming at even earlier delivery dates, keeping a lid on price increases and streamlining inefficient operations, especially production facilities.
By the end of the year, for instance, Gucci Group will have opened or refurbished a total of 70 stores between all of its brands, investing $195 million in all of its retail operations this year.
On Thursday, Gucci’s Bottega Veneta unit will cut the ribbon on its 3,200-square-foot flagship on the tony Via Montenapoleone, followed by a cocktail party. The store, which features handcrafted windows, door handles sheathed in leather and muted matte neutrals, was designed by Bottega Veneta’s creative director Tomas Meier and architect William Sofield and is the latest of Bottega Veneta’s worldwide flagships after similar openings in Paris, London and Beverly Hills.
By yearend, the Armani Group will have opened 29 stores for its brands and refurbished at least 12 stores, while over the same period Ferragamo will have invested in 40 boutiques between renovations and openings.
The ultimate aim of the store is to continue to raise brand awareness. "People will continue to spend on luxury goods as long as the product is visible and exudes safety," said Vittorio Missoni, financial director at the family-run company. "Why else do people invest in real estate, especially in well-located stores, during uncertain times?"
In addition to its stores, Ferragamo is pouring its resources into maximizing the efficiency of its production cycles for even faster deliveries. It also is streamlining some of its more established divisions to make them less bureaucratic. "You have to be ready and flexible to the changing market needs," said Ferragamo.Graeme Black, the new ready-to-wear designer at the Florentine luxury goods company and a former Armani assistant, said Charles Goldie, an artist from New Zealand, and his paintings of the Maui tribes inspired him. "It’s New Zealand meets New York with muted colors, tattoo-derived prints, lots of airy leathers and clean cuts. It’s for young, fresh and beautiful woman because there’s a big market for them," said Black. Smaller companies may not be as prolific on the retail front, but are still doing their best to weather the storm.
Gianluigi Manzini, commercial director for foreign markets at Swinger International, champions cost efficiency. "If you contain costs, even in moments of market euphoria when it’s easy to get carried away, then you can still make investments and carry on your growth plans," he said.
Last April, Swinger spent $16.8 million to buy Byblos, the once-hot brand, from Prada Group. The Verona-based Swinger will end 2002 with sales of $47 million, up 20 percent against the previous year.
Over at Byblos, the design team of Greg Myler, Stefano Citron and Federico Piaggi, which left Mila Schön to reinject verve into the label, is upbeat. "We dipped into the archives and were most influenced by the period when Gianni Versace designed the line in the late Seventies," said Citron.
The result is that, on the runway, expect to see military-derived ribbons and braiding, a faded eagle print, soft and flowing silks counterbalanced by cotton drills, leotards, high-waisted trousers and knee-grazing skirts.
Byblos, which is poised to compete with designer names such as Dolce & Gabbana and Blumarine by Anna Molinari, is expected to secure 300 sales points worldwide, said Manzini. Spring-summer 2003 sales for Byblos Blu, the brand’s diffusion line, ballooned 50 percent compared to the same season of the previous year, with buyers writing orders for 150,000 pieces.
"Our target is $10 million in sales in the first year. After eight years without a designer identity, we want to reassure our clients because we know they are looking for new lines and stimuli," said Manzini, adding that a flagship is expected to open in Milan by the end of next year.Ermanno Scervino is continuing its steady growth, thanks to collections that fuse basic rtw pieces, sexy cuts and a carnival of decorations. This year the company, which has just signed a licensing agreement for beachwear and lingerie, will post a 30 percent increase in sales. On the agenda for next year are store openings in Moscow and Saint-Tropez.
For the second season, Loro Piana is showing its bag collection, which rounds out the company’s deluxe apparel with a sporty edge. The bags are available in the company’s 58 directly operated stores, as well as Bergdorf Goodman and Neiman Marcus. The "Box Bag," a square shoulder bag cobbled with untreated French calfskin, continues to be a bestseller. Though the company won’t release figures, a few thousand were distributed worldwide this season and sold out immediately, forcing many clients to put in made-to-order requests, a Loro Piana executive said.
And they don’t come cheap: prices range from $630 for a small Bay bag and up to $2,670 for the bigger Box Bag. "The selection of the best hides and top-quality craftsmanship are our priority because we design timeless products that are part of our clients’ style," said company chairman Sergio Loro Piana, describing the bags, which require a day of work to complete.
Sergio Loro Piana’s statement sums up the mood of the Italian houses as the new season approaches. It doesn’t matter whether it is clothes or accessories, high end or the better market, companies are pushing forward with their strategies despite the uncertain times.
As Missoni puts it, "Independently from the general scenario, our will is to continue doing what we know how to do best because people are eager to carry on."
Supermodel @helenachristensen teamed up with longtime friend and designer @camillastaerk on a joint @paredeyewear collaboration. The lineup features three styles and 11 offerings, all of which embody a vintage feel. Get all the details on how they celebrated the collab on WWD.com. #wwdaccessories #wwdeye (📷: @slovekinpics)
“It’s a hard industry to keep motivated, as well, so finding different subjects and people is what makes it worth it – when you’re like, oh, I’ve met great people, I feel like I’ve done something good, and I feel proud of having done this,” said French actress Stacy Martin on being grateful for the variety of roles she’s take on. Read @ktauer’s full interview with Martin on her her latest film “Godard Mon Amour.” #wwdeye (📷: @danieldorsa)
After showing in front of the Eiffel Tower for his last two women’s ready-to-wear collection, it looks like @anthonyvaccarello may be heading to the Big Apple. Sources say the designer will stage his next @ysl show in NYC on June 6. Get all the details on WWD.com. #wwdnews #wwdfashion (📷: @aitorrosasphoto)
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion