MILAN — The luxury industry can “coexist with geopolitical tensions.”
So believes Stefano Sassi, chief executive officer of Valentino SpA, who responded to a question about the political situation following the decision by Saudi Arabia, Egypt, Bahrain, United Arab Emirates, Yemen and Libya to cut diplomatic ties with Qatar. The Italian fashion group is controlled by Qatar’s Mayhoola for Investments and Sassi touched on the issue during a discussion about the brand at a meeting held by SMI Sistema Moda Italia — the Italian fashion and textile trade association — on Tuesday.
Sassi underscored how the industry has been dealing with geopolitical frictions for the past few years. In the past, he said, “the reaction was very strong.” Today, everything “is absorbed very quickly. (…) It’s not ideal, but as long as we’re dealing with small- or medium-sized events, I don’t believe they impact consumer spending.”
Sassi emphasized the company’s positive relations with Mayhoola, which has “total respect for the management and creative [team] of our company.” He noted that the Qatari fund has supported Valentino “financially, leaving us [the freedom] to do our job.” In addition to Valentino, Mayhoola owns Balmain, Pal Zileri, a 38 percent stake in Anya Hindmach, 11.3 percent of Tiffany & Co,. and a controlling stake in French department store group Printemps. The Qatari Investment Authority, meanwhile, also owns Harrods.
Sassi expects Valentino will continue to grow, aiming at what he hopes to be “a double-digit increase, even if it’s not easy this year.”
“I do believe that for brands like ours, an increase [in revenues] is essential, we can’t stay flat,” Sassi added. “Considering its positioning, I can’t see Valentino as a 3 billion euro [$3.4 billion] brand right now, but (…) I believe this brand has the potential and features to keep growing.”
In 2016, revenues were up 13 percent, totaling 1.1 billion euros, or $1.21 billion at average exchange. “I’m happy we managed to surpass the billion [benchmark],” said Sassi, explaining how significant numbers are needed to continue competing in the industry.
“Even more important is the product innovation,” he continued, mentioning the “coolness factor” and the ability to be perceived as an “it” brand. In this scenario, digitalization accelerated the process of creating trends and products, which Valentino launches every few months. In particular, Sassi mentioned the efforts made in the accessories category, which accounts for half of the brand’s revenues, and underscored how innovation is crucial also in men’s wear, which is taking a more casual direction.
Former Prime Minister Matteo Renzi made a surprise appearance at the meeting. “I thank you for remembering what we have done for this industry, but the truth is that we have done the minimum,” said Renzi, who also mentioned the Italian minister for economic development Carlo Calenda, vice minister Ivan Scalfarotto and current Prime Minister Paolo Gentiloni for their contributions. “I’m glad that the attention given to fashion was not the caprice of a single man but the strategy of an entire team,” he added.
Renzi revealed how this approach will lead Gentiloni to inaugurate the upcoming edition of Pitti Uomo, running June 13 to 16 in Florence. “The prime ministers will [feel] obliged to take part in Milan fashion week’s activities…because we need to recognize there’s industrial dignity in this [sector],” he added. To support his point, Renzi remembered how last year the textile, fashion and accessories industry generated 88 billion euros of revenues, or $99.2 billion; 55 billion euros in export, or $62 billion, and employed 584,000 people in Italy. “This is a very relevant part of our economy,” he stressed, also referencing the additional values and emotional features of the industry.
SMI Sistema Moda Italia president Claudio Marenzi retraced the developments fashion and textile companies showed since he took the helm of the federation in 2013, growing 4.2 percent, compared with the national GDP, which was up 1.8 percent. In particular, Marenzi thanked Renzi for his efforts in backing the industry and contributing to its growth with institutional recognition. “We have not felt alone, for the first time the government gave dignity to the fashion industry,” said Marenzi.
In particular, in 2016 turnover for SMI’s Italian textile and fashion industries was up 0.9 percent over the previous year, registering 52.8 billion euros, or $59.5 billion. The fashion macro-category increased 1.4 percent while the textile was flat. Exports accounted for 56 percent of total sales.
In the first half of 2017, the positive trend was confirmed with an increase of 2.3 percent in revenues — 2.5 percent growth for textile and 2.1 percent increase for fashion companies.
Projections for the full year see the Italian textile and fashion industries registering revenues of 53.8 billion euros, or $60.6 billion, up 1.8 percent compared to 2016. In addition, the trade balance is expected to climb 1.6 percent and reach 9.1 billion euros, or $10.3 billion.
“We have to look to the future in positive terms,” said Marenzi. “Not letting our ego prevail but working together [as a team],” he concluded, adding that this is the same approach he would like to see applied to the Italian political situation.
Beginning in 2018, SMI and FIAMP — which used to represent the companies working in the accessories industry, including leather goods, eyewear, fur and jewelry — will be merged in Confindustria Moda. Presented last March, the federation will group 67,873 companies operating in the fashion, textile and accessories sectors.
Marenzi will be Confindustria Moda’s first president while Cirillo Marcolin, who holds the post of president of FIAMP, will become Confindustria Moda’s vice president, for two years.