MILAN — How are luxury goods companies reacting to the crisis and what are their long-term strategies for survival?
A panel with some of the industry’s top players offered solutions here this month during a meeting organized by luxury goods consultant Carlo Pambianco.
"There is a dose of excessive nervousness now — even companies that have had a long history are being asked to prove themselves in a very short term," said Diego Della Valle, chief executive of Tod’s.
Lamenting an exaggerated concentration on mergers and acquisitions over the past few years, Della Valle noted that the current crisis has shifted priorities. "Fortunately, the focus is once again on product and customer," he said.
Della Valle added that Tod’s would not slow its strategic development in 2003, and reiterated that he doesn’t plan to expand its product offering. Meanwhile, referring to potential retail and structural expansions, the executive called this "a moment of great opportunities." Like most of the panel, he said he believed an economic rebound would not happen until the end of 2003 or beginning of 2004.
Michele Norsa, ceo of Valentino, said one of the most detrimental mistakes a company could make is to cut back on marketing and communications. "Big brands are built on communication — it’s intrinsic," said Norsa, adding that Valentino, though still in the red, would stick to its 2002 advertising budget for the upcoming year. But he also urged the media to offer a more positive spin about the economic state of the fashion industry.
"The sector is strong and we are capable of dealing with this crisis," he said.
And while everybody at the conference pointed to China as the industry’swhite knight, Norsa was wary: "Let’s not forget that China is still a very male-oriented community and it will take a very long time to reach women consumers there. We don’t necessarily have to sell to China to thrive."
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