Since Vanguards Group took a majority stake in the company in September 2020, the duo has been gradually scaling up the business.
“These past two years have been intense because we decided to stay involved in the decision-making part not only in terms of creativity but also in terms of management and overall strategy,” said Messina. “It’s been two years in which we have built and destroyed, which is a very interesting thing. The first year we hyper-built, the second year we destroyed and now it’s time for a third year of equilibrium.”
The flexibility in stretching strategies has always proved to be an asset for the brand, which has been a forerunner in Milan in experimenting with collections, presentations and distribution formats. Now the company is tweaking its business model once again, introducing the concept of “master collection,” as the designers put it.
It’s a combination of pre- and main collections that will be unveiled as a whole to buyers on pre-collections timing, meant to offer them an overview of what to expect, as well as ease pressure on the supply chain.
“We wanted to break from our usual scheme of doing hundreds of things and then see what happens,” said Rizzo. “We want this to be a super-focused moment so that buyers can have the collection delivered at the right time and we optimize the supply chain processes.”
“We’re presenting already a part of the collection we’ll show during the fashion week in February,” continued Messina. “We’re leaving out like 15 percent of that collection, that is just the most special and intricate pieces that require a different timing to be manufactured and have different price points. Plus, in the long term we would also like to limit the chances for everyone to even buy them with the goal to keep them exclusive for our key partners or our own channels.”
The “master collection” move will basically replace the pioneering Canvas project Messina and Rizzo launched in 2020 amid the pandemic. That initiative used to stand in for the brand’s pre-collections and to flank the two main lineups Sunnei traditionally unveils via runway shows during Milan Fashion Week in February and September.
Available at a dedicated VR-enhanced platform and aimed at enabling wholesale partners to build their own Sunnei collections through a customization service, Canvas offered retailers the chance to personalize genderless carryover pieces, including ready-to-wear and accessories, by intervening on design aspects of each item (changing the length of sleeves, fabrics, colors and stitches and more) to differentiate their assortment from competitors.
“Canvas for us has represented a way to bypass a complicated moment. We found a way to keep going on in a smart way within that context. It’s not like we want to interrupt it now, just evolve it,” said Messina, underscoring that the service was becoming difficult to handle in terms of production. It will still be offered to key partners for special collaborations, he said.
“As the brand matured a lot, our commercial strategy had to mature as well because the original idea of the Canvas collection was genius and innovative but also came with certain challenges in scaling it up,” confirmed Peter Baldaszti, chief executive officer of Vanguards Group, which also has the Nanushka and Aeron brands in its portfolio. “So with the Sunnei business doubling or tripling every year, we have now to come up with a commercial strategy which is also aligned with the scale of the business.”
Baldaszti defined the new format as a “commercial changer” for the brand, touted that it creates a greater cohesion in the collection and that it helps “wholesale accounts — which are still very important and will be a very important part of the business — build their Sunnei offering more strategically.”
The first iteration of the new approach is being tested this week with a sales campaign running in Paris, a city where Baldaszti believes the “Sunnei energy resonates really well” and one where the brand will become more active.
The group’s plan to amplify the label’s appeal internationally will include community-building, communication and marketing.
“The most important thing is that in 2023 the business is most likely going to turn break-even, which is a critically important milestone in the life of the company,” said Baldaszti.
Without disclosing financial figures, the executive forecasted that by the end of 2023 the Sunnei business would have grown seven- to eightfold since Vanguards Group first invested 6 million euros in the brand.
“Sunnei has been really successful on certain geographies where its strong focus on community and culture, which are the two key pillars of the brand, are resonating really well and kind of found an easy way in. But there are other markets where I think these values resonate as much, we just need to invest more heavily,” noted the CEO, who listed South Korea, Italy and the U.S. as top performing countries.
North America will continue to be a major focus of the strategy for the upcoming 18 months, along with China and the U.K., where executives said its potential remains untapped.
“We’re trying to find the right balance with Peter. Instead of doing exaggerated business plans in the short term, we’re doubling [sales] while trying to be prudent and to preserve the brand’s values as much as possible,” noted Rizzo. “For one, the U.S. is super interesting, there’s excitement but we want to build new models with partners to avoid over-distribution… also because we wouldn’t want to saturate the online channel,” said the designer. He additionally stressed that since Vanguards Group started to back the company, distribution increased “only in qualitative terms, not in quantity.”
“The key not to dilute the brand and not to become just a commercial commodity is to build and have consistency with communities that Sunnei is building across key cities and markets. And of course, that requires a certain local presence as well, so let that be pop-ups or music events or dinners or other activations,” added Baldaszti.
The executive also spotlighted the compelling product offering, particularly stressing the accessories, which “you can’t really compare to anything in the market.” Sunnei has always been strong in footwear, starting from its 1000Chiodi sneakers with rubber studs, but in the past nine months has put a heightened focus on developing bags with the launch of Lacubetto cubic leather bag that doubled the “It” style Labauletto first introduced in 2019.
Baldaszti said that currently the shoe business accounts for around 25 percent of total sales. The executive aims to reach a healthy balance between overall accessories and ready-to-wear, with accessories accounting 40 percent of sales. Those two segments are the drivers of the business, but Sunnei also has eyewear, jewelry and pet wear, as well as the Sunnei Objects lifestyle line launched in 2021.
Right now, 75 percent of total sales are generated from the wholesale channel. The brand is carried at LuisaViaRoma, La Samaritaine, Ssense, GR8, SKP, Rinascente, B1ock Concept Store, Boon The Shop and Dover Street Market in Beijing, among others.
In addition to its e-commerce, Sunnei has a flagship store in Milan’s Via Vela, which originally served as the brand’s headquarters. While Baldaszti said he is a strong believer in the direct-to-consumer model, plans to open other Sunnei stores are “still very much ahead of us.”
“What I think will be very important is to create the right Sunnei pop-up experiences, both d-t-c and with major wholesalers, so that’s something that we’re going to invest in for this year and 2024,” said Baldaszti.
Last year Messina and Rizzo launched an itinerant inflatable pop-up concept developed with design collective Parasite 2.0 and dedicated to its bags. The designers’ vision is to continue to work with architects to create new formats, all rooted in simplicity.
“We’re in a moment in which we are evaluating optimization criteria. A pop-up doesn’t have to be a playground, that concept feels outdated… We want to deliver the simplest and more pragmatic experience as possible and we’re imagining spaces at the service of communities, so that can also adapt to each different city,” said Rizzo.
Communication will follow the same rationalization, as the designer acknowledged there’s been oversharing on the brand’s social media. “We’ve squeezed the digital channels: now we want to focus on quality and coordinate the peaks of communication to coincide with our events,” said Rizzo.
Yet the irony-filled and smart digital presence of the brand is what helped the founders gain a cult following throughout the years and put them on investors’ radar, as well.
“The first time I have come across Sunnei was in mid-2019. I started following them online and I’ve always felt that whatever they do is always a bit different, with a certain angle and a certain clarity, which I think is crucial in this landscape,” recalled Baldaszti, who praised the brand’s strong cultural equity and the “very recognizable and distinctive identity.”
These elements are part of the criteria Baldaszti considers when evaluating suitable brands to expand Vanguards Group’s portfolio.
“The most important aspect is always the creative talent and the creative founders who are building something from nothing, but we’re also very much focused on having a team already in place, where there is also a certain level of business acumen and entrepreneurship,” he said. “The brands of the future have to think like media brands in the way they approach content and build their brand and community. Sunnei is a great example for that,” he said.