MILAN — With the uncertainty surrounding the European and North American markets, currently in the grips of the coronavirus pandemic, Pietro Negra, president and chief executive officer of Pinko, is looking at the Far East to continue the growth of his contemporary label, which operates 256 stores globally and in 2019 posted revenues of 220 million euros.
“Asia already plays a key role for our business, accounting for between 20 and 25 percent of our sales, and now more than ever it’s getting crucial to invest there,” said Negra, who praised the strict measures put in place by the Chinese and South Korean governments to contain the epidemic. “They were definitely more equipped than us to face the crisis; they trust authorities more and have a deeper sense of discipline.”
Negra said that, while in February business in China dropped 95 percent because of the lockdown, in March he saw signs of improvement. “The decrease rate slowed down, we closed the month 50 percent down, regaining 45 percentage points compared to the month before,” he said, adding that last week was actually more positive than the same week last year. “These small signs definitely help to keep the mood up.”
“There are two main factors making me feel positive about a fast resumption of the Chinese market: first of all, customers are young, dynamic and highly digitalized, and second, the national government is able to guide people’s consumption habits. Having closed their exchanges with Hong Kong, they are now pushing domestic shopping,” he added.
Pinko operates about 72 stores in China and five openings are scheduled and “confirmed,” according to Negra, for this year. At the same time, at the end of January, Pinko made its first foray into the South Korean market, opening a store, in collaboration with local patterns Mitsui & Co. Italia and La Pace, at Seoul’s prestigious Shilla Duty Free Downtown Store. This unit was followed in February by the inauguration of another store at the South Korean capital’s Hyundai Department Store Duty Free Dongdaemun.
Pinko plans to open two additional stores in South Korea by the end of 2020 and to reach 14 boutiques, six in department stores and eight at Duty Free units, by 2023.
Even if Negra admitted that it’s extremely hard to make forecasts for 2020 — “many colleagues expect a 30 percent loss this year” — he is fully aware that this difficult moment will lead companies to rethink their strategies and their operations.
“I think we are all realizing that the former business model was not sustainable anymore,” said Negra, revealing that starting from the upcoming pre-fall collection, Pinko lineups will be “smaller” and “we will further put the focus on quality and value.”
While he said saving part of the current spring 2020 collection for 2021, as suggested by many, seems logic and fair, Negra believes that it’s not realistic. “This strategy works if you have a full control on the markets, which is almost impossible nowadays. Look at the e-commerce sites, they have already started doing markdowns on summer collections.”
The fashion entrepreneur said concrete measures can be taken on the fall 2020 collections. “We are definitely producing less products than the orders we received,” he said. “While we will manufacture all the orders collected in China, we will cut those coming from the other markets. This is something complicated and delicate to do, but we are analyzing each single market and each single category.”