MILAN — Specialization and centralization will likely edge out “managers from the world of finance and M&A” helming fashion brands. According to Giovanna Brambilla, partner at Milan-based executive search firm Value Search, a shift is taking place in the fashion industry, leading to increased focus and convergence at the decision-making level.
Following the changes in organization last month at Kering, which shuffled top management in a bid to accelerate growth of its fashion and “hard” luxury brands, Brambilla shared her thoughts with WWD on the strategies she sees taking shape in the industry.
WWD: What are your views on the changing landscape?
Giovanna Brambilla: “Bigger brands are meeting greater difficulties and are strengthening their efforts to bring home those profitability results that had been promised, while smaller brands within large groups are performing very well. Consumers are changing their tastes and requests, showing increased selectiveness. Brands feel the need to differentiate themselves because consumers are looking for a distinctiveness that is more in line with the European model — one that does not uniform itself to the masses. For this reason, there is more attention to niche brands with a more selective strategy. I believe this is one factor that has led to a change in the organization of groups such as Kering, with an increased focus. The change is dictated from a consumer that is increasingly more evolved and sophisticated. Niche is more and more niche.”
WWD: How would you define the steps that are being taken in fashion?
G.B.: “The strategy is to zoom in on smaller brands, to centralize decisions and create more specialized poles, such as watches and jewelry separated from ready-to-wear, which lead to a different focus depending on the product category — a must in luxury. This specialization helps to tackle different and new markets. Take the venture between Kering and Yoox, for example, which leverages synergies in distribution.”
WWD: How does this specialization physically translate?
G.B.: “It is interesting to note the relevance of Italian managers now and, in particular, how [Marco] Bizzarri [president and chief executive officer of Bottega Veneta, who is to become ceo of Kering’s new luxury couture and leather goods division] doesn’t come from finance and M&A or from other sectors. His specific expertise and knowledge of the sector is privileged. The same with [Albert] Bensoussan [former Louis Vuitton executive, who is to join Kering as ceo of its new luxury watches and jewelry division].
The era of finance men is over; now there is a need for people who know the products, the business and the markets. Also, managers are more international compared with years ago, which comes from the fact that groups have created important structures in different regions and managers have had different experiences, also because of the dimension of the brands. Big groups have created a pool of expert managers that have grown within. It’s a beautiful message, to let managers grow without leaving the group. Specialization has become a priority for fashion groups, which are defining their strategic assets for the future.”