Italian Brands Forecast Growth in 2014

Soaring business in the U.S. helped the Italian men’s wear industry weather a stagnant local economy and a slowdown in Asia in 2013.

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Men'sWeek issue 01/02/2014

MILAN — Thank you, Uncle Sam.

This story first appeared in the January 2, 2014 issue of WWD.  Subscribe Today.

Soaring business in the U.S. helped the Italian men’s wear industry weather a stagnant local economy and a slowdown in Asia in 2013, and executives are generally hopeful about prospects for 2014.

“The U.S. is the market that is showing the biggest growth, with constant double-digit gains in all categories,” said Versace chief executive officer Gian Giacomo Ferraris, noting that the brand’s iconic prints, leather products and shoes are hot selling items in the region. The Milan-based firm is also banking on the potential of Japan and Korea, where there is “strong” demand for Versace’s men’s wear, said Ferraris, adding that there are plans to open dedicated stores in these countries in 2014.

But Ferraris is especially optimistic about next year’s debut of Versace bespoke men’s designs. “We are strengthening our [tailored offering],” said Ferraris.

The brand’s men’s category accounts for 46 percent of total sales, which last year reached 408.7 million euros, or $523.1 million at average exchange, up 20 percent from 2011.

This trend toward more formal looks is exemplified by Brunello Cucinelli, which at Pitti Uomo will double the space of its booth to present its first collection of suits. The move follows Cucinelli’s acquisition of d’Avenza Fashion SpA for 3.5 million euros, or $4.7 million at current exchange. The Italian luxury firm also purchased the company’s property in Avenza, near Tuscany’s Carrara, where the business is headquartered and will continue to be based. The Carrara area specializes in men’s suits.

The men’s division accounts for 36 percent of Cucinelli’s sales, which last year hit 279 million euros, or $357.1 million at average exchange.

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Although Brunello Cucinelli continues to believe in the draw of luxury sportswear as well, the entrepreneur is banking heavily on the suit, which he thinks “young men in their late Twenties or early Thirties do not own, unless they are used to dressing formally” on a regular basis. Cucinelli said the brand’s suits will be “more contemporary, with a fit closer to the body, in line with modern taste.”

Cucinelli also highlighted the brand’s performance in the U.S., which registered a 25 percent jump in sales in 2013. The entrepreneur said this year was a “particularly good one for absolute luxury, Made in Italy and real craftsmanship,” and concluded that 2014 is equally “looking bright.”

Stefano Canali, general director of the family-owned Canali, touted the “undisputed strength of the American market,” which accounted for 38 percent of sales in 2013, compared with 33.5 percent the previous year.

Strong brand awareness and established history in the U.S. rewards brands that “have value in the eyes of consumers,” he said, noting a renewed “optimism” in the country, with increased tourist traffic, including more visitors from China.

Canali, which has seven stores in the U.S., including a New York City flagship that opened in April, will continue to invest in directly operated stores there. Plans call for a new unit in Atlanta next year, and the company is searching for a location in Chicago.

Canali defined 2013 in general as a “roller coaster/inconsistent year, yet one with encouraging signs.” This comes despite weakness in Mainland China, and a relatively flat business in Europe, the Middle East and Africa, or EMEA. The EMEA region accounted for 30 percent of sales, compared with 31 percent the previous year; Asia-Pacific for 23.5 percent, compared with 20 percent in 2012, and Italy for about 12 percent, in line with the previous year.

The company will unveil a new store concept “with a richer, more modern and exclusive look” in the Chinese city of Chengdu in the first quarter of 2014, and another unit in Hong Kong’s Pacific Place next year, Canali said.

Like other Italian brands, Canali noted increased demand for suits and made-to-measure clothing, as well as more “desire for softness, comfort and personalized service.”

Tom Kalenderian, executive vice president, general merchandise manager, men’s and Chelsea Passage at Barneys New York, said, “2013 was a significant year, as the 90th year for Barneys Men’s,” and “a strategic focus” on this division benefited from a “comprehensive strategy.” He cited a major renovation of the 20-year-old New York flagship, as well as an enhanced marketing program (via the “Man Up” campaign) that included a 50 percent larger fashion mailer, greater marketing presence on Barneys.com, a Madison Avenue store event and inserts in Departures, Robb Report and WSJ magazine. “The results were impressive, benefiting the business areas which received this special focus, such as shoes, accessories, luxury and designer apparel,” said Kalenderian.

Renovations in men’s wear in key flagships will be completed in 2014. “These improvements in combination with a continued focus on shoes and accessories will contribute to growth,” he said.

Among best-selling items, he cited designer sneakers, which are “experiencing record growth with strong colors and materials leading the trend. The leather goods trends are impressive in designer bags and small leather goods. Pop colors and fabric diversification have had “positive results.” In addition, watches “were strong with a trend toward vintage watches leading the sales. Outerwear performed very well, with higher full-price sell-throughs.”

Kalenderian said the brands leading growth are a combination of luxury labels as well as designer, such as Ermenegildo Zegna, Isaia, Brioni, Kiton, Givenchy, Prada, Saint Laurent Paris and Christian Louboutin.

Francesco Pesci, ceo of Brioni, highlighted a rebirth of formalwear that is younger and with more fitted silhouettes. The brand, under the ownership of the French Kering group, is working on a “strong and directional brand identity,” and the development of its retail chain. “In general, we saw a growth in 2013 compared with 2011 and 2012, which closed with a moderate and less impetuous performance,” said Pesci, adding that until the end of July, growth was “very strong,” followed by a weaker August. He cited a slowdown in Asia and China in the second half of 2013. Pesci said he had faith that 2014 would be a positive year, reaping the rewards of Brioni’s retail expansion started in 2013. “I expect a 2014 of robust growth and stronger than 2013,” he noted.

The executive said the company works in a medium-range, three-year period, avoiding a change of plans every quarter. At the moment, the challenge is to maintain a like-for-like growth, limiting the risk of overexposure, he added. In 2013, Brioni opened boutiques in the U.S. in Costa Mesa, Calif., Chicago and Palm Beach, Fla.; in Vienna, and in Frankfurt, and also reacquired five franchised stores in China (three in Beijing, one in Shanghai and one in Hangzhou). In 2014, Brioni intends to maintain this pace, in a mix between new venues and relocations, added Pesci.

Kiton ceo Antonio De Matteis characterized 2013 as “an excellent year” globally, with the U.S. showing the most growth, and was hopeful for 2014. De Matteis said he saw a significant gap between mature countries, with a customer that is less formal, and emerging countries, where there is a desire for more formal suits.

The Neapolitan tailoring company will inaugurate on Jan. 12, during Milan men’s fashion week, its new showroom and commercial offices in the more-than-47,000-square-foot building on Via Pontaccio it acquired in November, which previously housed the Gianfranco Ferré label for 14 years. The first floor will host a tailor’s shop and a boutique that is expected to open within two years.

Tiziana Cardini, fashion director for La Rinascente, said, “Men’s wear closed 2013 with very, very good results, posting a double-digit growth,” and said the Italian department store was optimistic about 2014. “The men’s fashion consumer spending is expanding, with new markets and new consumers that are open to novelties and edgier offers. There is a desire for fashion and style, and often the more difficult, stronger or more interesting offers are the most stimulating and the ones that sell the most,” said Cardini.

She attributed the success to La Rinascente’s “very comprehensive and strong assortment, from trendy looks to more classic ones. It’s a well-tuned selection that caters to both a local and an international customer base.” She said shoes and accessories have been “enormously successful,” and sales of these categories for men have been approaching women’s levels. La Rinascente will unveil its revamped men’s footwear floor in February. The floor is entirely managed by the store, and the offerings span from more classic shoes made by hand to designer brands.

Boglioli ceo Giovanni Mannucci said the company in 2013 initiated a turnaround and renovated its design office. He expects to see the first results of this strategy next year.

“We forecast a slight growth of between 5 and 7 percent in 2014,” said Mannucci. Sales in 2013 will be in line with those of the previous year, when they totaled 28 million euros, or $45.8 million.

Boglioli, which will present its collection in Milan on Jan. 12, has upped “creativity applied to classics and invested in textiles, design and communication, with an eye on our past history of unstructured and relaxed looks,” said Mannucci.

Asked to pinpoint the main successful trends, Rosi Biffi, owner of the Biffi and Banner boutiques in Milan, said “a beautiful surprise, fortunately identified in time, was knitwear moved onto outerwear.” Biffi cited the Montgomery duffle coat and double-breasted jackets with very updated fits as key hits. “Really a good result,” she said. “For 2014, we expect renewals in all sectors, but the main factor will be: fashionable prices!”

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Raffaello Napoleone, ceo of Pitti Immagine, Pitti Uomo’s organizing body, echoed the upbeat mood, based on “objective signals,” such as the closing reports of fashion trade show Moda Prima that wound down at the end of November “with extraordinary and unexpected results,” which bode well for Pitti Uomo. “There was a 30 percent increase in visitors from 50 countries,” he said, “and the growth of Italians, 30 percent more buyers and 28 percent more companies.”

“We must be concrete, the mood is recessive and consumer spending has not picked up here, but the mood is more positive. Florence is dynamic, brimming with initiatives and scouting young talents,” said Napoleone, adding that, according to a study by Milan-based consultancy Pambianco, in 2012, men’s tailored clothing was up 5.1 percent compared with the previous year and that, for the first time, exports outside Europe were greater than those within Europe.

“Men’s wear continues to be considered the luxury area with the greatest growth potential. While the [casualwear] segment continues to boom, including accessories and outerwear, a strong interest for sartorial jackets is returning,” said Umberto Angeloni, ceo of Caruso.

Angeloni logged what he refers to as “a very intense” 2013. He took total control of the company, delisted it and inked an agreement with an investment fund managed by Fosun International Ltd., which took a 35 percent stake in the high-end Italian men’s wear label in the fall.

In 2014, Angeloni will be investing in the “Fabbrica Sartoriale Italiana,” the new name of the company in Italy’s Soragna town, where the production area will be expanded by 25 percent in the section dedicated to handmade and custom suits, all integrated sustainably. The current production, with 2,000 models a season and 1,000 made-to-order pieces a month, will be increased — engaging more than 600 workers and reaching up to 120,000 jackets and coats a year.

“I expect increased press and buyers at Pitti because it is the most important window of Made in Italy. At Pitti, we will represent a concept, that of ‘Manufacturing Renaissance,’” said Angeloni, who indicated that quality manufacturing is central to the success of Italian products.

At Pitti, Caruso will present a corporate pop-up book, titled “Manufacturing Renaissance by Umberto Angeloni,” a look at the history of the company from tailor Raffaele Caruso, who moved from Naples to Soragna in 1958, and will examine the sartorial know-how, creativity and technology of the company, which has been boosted by Angeloni’s expertise as a men’s wear entrepreneur.

Next year, Caruso’s first flagship will open in Milan, followed by units in New York, Shanghai and Tokyo. “The main obstacles are the same — Italy’s clammy bureaucracy, a high cost of work and energy, fiscal pressure and a negative image of the country,” said Angeloni. “But there are favorable trends, because of a mature, affluent consumer that recognizes the excellence of Italian manufacture and design.”


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