MILAN — Renzo Rosso is providing C.A.S.H. to a group of Italian small and medium-sized companies. On Wednesday, Rosso, head of OTB SpA, which controls firms including Staff International and Diesel, presented a new initiative called C.A.S.H., which stands for Credito Agevolato [facilitated credit] — Suppliers Help. The Italian entrepreneur has signed an agreement with Ifitalia, of BNP Paribas Group, that allows Staff International suppliers easier and speedier access to credit, for a total value of 50 million euros, or $66 million at current exchange, at interest rates in line with those provided to OTB.
“This is a fantastic project. It’s close to my heart, as it concretely helps to finance Made in Italy production,” said Rosso during a press conference held at the headquarters of the Italian Chamber of Fashion, which he’s recently been more involved in. “There’s so much talking around this concept, but not much is actually done. Small and medium-sized companies often don’t have contractual power with banks, and they have to pay interest rates up to 18 percent, while through us they will pay between 2 and 5 percent,” he explained.
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Staff International ceo Ubaldo Minelli said the pipeline is “a crucial asset” for the company’s success and noted that many of its suppliers “are suffering” in this economy, struggling with the credit crunch. “We are concerned about their future. They either have to downsize or they are forced to close,” said Minelli of the suppliers, which are not exclusive to Staff International.
The line of credit is obtained by Staff, which in turn is making it available to suppliers of the entire pipeline, from those that provide raw materials and fabrics to those contributing production accessories or end products, and laboratories — dyers or washers, for example.
The credit is handed out on the basis of a Staff International evaluation system. “We rate our suppliers through objective and transparent criteria, so that this stimulates them to improve their performance and become increasingly global,” said Rosso. The rating will be updated every six months.
With this initiative, the company not only helps its most deserving partners, but also contributes to improving the processes and the performance of the companies within the pipeline, said Minelli, adding that 96 percent of Staff International production is made in Italy. The Veneto, Italy-based firm counts six licenses for 50 collections for Maison Martin Margiela, Viktor & Rolf, DSquared2, Vivienne Westwood, Marc Jacobs and Just Cavalli.
Rosso said there are 455 companies supplying Staff International and that 40 percent of these had already passed the rating test. The rating is based on quality of fabrics; reliability in terms of timing, production and deliveries, and partnerships — technical assistance, certificates on tolerance and communication, among others.
“We are able to cut the red tape, and the money can be provided in a week,” said Rosso, adding that he hopes to eventually double the credit’s amount of 50 million euros. He also said he plans to extend this project to other OTB brands, including Marni, for example, once it is “more structured and managerial.”
Similarly, in January, Gucci partnered with Banca CR Firenze, part of the Intesa Sanpaolo Group, to offer companies that are part of the Italian luxury firm’s finished leather goods supply chain — a network of more than 600 firms — easier access to credit from banks. The bank and Gucci share information to support suppliers and sub-suppliers providing readily available customized benefits and competitive interest rates. Gucci’s supplier evaluations are factored into decisions.