THE GREAT REDO
NEW LOOKS ARE JUMP-STARTING DEPARTMENT STORES.
Byline: Robert Galbraith
MILAN — Italian department stores are sprucing up.
They’ve launched extensive renovation programs and are adding high fashion labels to try to woo back customers who have been defecting to fast-spreading shopping malls, hypermarkets and speciality chains.
For example, La Rinascente, Italy’s leading department-store chain, now sells merchandise from such designers as Gianni Versace, Missoni, Gianfranco Ferre and Zegna at its downtown outlets here and in Florence and Rome.
Coin, the family-owned apparel retailer from the Venice region, has created a trendy minimalist look, like Gucci, Prada and Calvin Klein, for its new Koan line. Launched in March 1996 and targeting 24-to-40-year-olds, the line was originally planned for freestanding stores. But Coin found that it sold better through in-store shops in existing department stores and has since adapted the strategy accordingly.
Coin was the first of the big chains to respond to the changing market and has made the most progress to date. The group introduced a comprehensive reengineering program called “Can Do” in February 1995. It redefined the group’s strategy, primarily in its approach to customers, by adapting its stores to changing habits in Italy.
“We are very encouraged by the initial positive results coming from the restructuring,” said Sergio Bianchi, Coin’s general manager. “Coin is moving away from a department-store philosophy toward one aimed at creating the perfect shopping piazza, in which a variety of select stores can be established.”
The Coin philosophy has been encapsulated in its new shopping mall, LeBarche, in Mestre, near Venice. The mall comprises 24 independent stores, including Max & Co., Nike and Swatch, plus a Coin department store and rooftop restaurant.
Coin studied shopping malls in the U.S. and northern Europe before starting the Mestre development. Le Barche is the latest in a series of innovative retail ventures that Coin has initiated in Italy. The company transformed an old brewery in Rome into a chic sales point and built a store in Bologna around an ancient Roman theater. The National Retail Federation in the U.S. voted Piergiorgio Coin, chairman, its 1996 International Retailer of the Year for his group’s innovative merchandising techniques.
“This prestigious honor was given to our chairman in recognition of Coin’s capacity to revive Italy’s historic city centers,” said Bianchi.
“Italy’s history is a unique legacy, which provides us with great opportunities for innovative store sites. But they need to be handled with great care if they are not to detract from their surroundings.”
La Rinascente has also implemented an extensive overhaul program. The renovation at its flagship in Piazza Duomo, here, has resulted in a significant increase in sales, according to the company. The group is seeking to exploit Italy’s position as a popular tourist destination by expanding its presence to all major cities throughout the country.
La Rinascente also owns Upim, a mass-to-mid-range chain, which it intends to reposition to improve its performance. The company is replacing Upim outlets with renovated La Rinascente stores on prime city-center sites. One new store opened last fall in Florence and is an example of the new strategy.
Standa, the variety chain owned by media mogul Silvio Berlusconi, started presenting a new look in selected stores in Italy this year. The chain has faced problems similar to Upim’s, and the restructuring is designed to curb several years of losses. Sources estimate that sales at Standa stores were down by 2 percent in the first half of 1996. Standa’s strategy is to provide better value for money to its customers, not necessarily to try to be more upscale. The stores will focus on added-value products, and the presentation will be designed to encourage browsing and impulse-buying.
Umberto Nazzari, head of Standa’s department store strategy and development, said the company is also developing concept retailing.
“Each part of the store will be designed to encourage customers to tour the whole area,” he said. “The different areas will be developed according to the merchandise mix. The presentation will be very important, allowing shoppers to see and touch the merchandise before purchasing it.”
Standa launched its new look in Budapest, with a 3,500-square-meter franchised store in a 51,000-square-meter shopping mall. This is the model for restructuring stores in Italy.
“The interior of Standa stores is being designed to reflect the town, city or quarter where they are located,” said Nazzari. “In Milan, for example, the decor can represent typical areas of the city, like the canals of the Naviglio quarter. The important thing is that each store will have its own image, its own individuality.”