In a matter of 10 years, what once were considered ingredients necessary to building luxury brands have transformed into a recipe that could damage them.
Only recently could a well-funded designer aspiring to break into the atmosphere of Gucci, Prada and Louis Vuitton do so by following their example: taking direct control of licenses, opening their own stores at fashionable addresses around the globe and expressing a singular vision on everything from retail design to their choice in paper clips. But the changing landscape of fashion also means changing rules and those old ideas now resonate as “boring.”
This is something that Diego Della Valle, the chairman and chief executive officer of Tod’s SpA, fears has escaped the attention of many design houses, which may succeed in the short term by clinging to yesterday’s examples of luxury design, but could ultimately be damaging their brands in the long term.
“Now we need to change the direction,” said Della Valle, as he offered his outline for a new luxury strategy during a keynote address. “It’s not possible to have, anymore, only two collections each year. It’s not possible to have the same face around the world. [The new direction] is more difficult and more expensive. But now we need to be big and at the same time, with the artisan mentality — we need to make a collection every two to three months, to have different products at each flagship around the world. This is what the market wants.”
Looking at his own experience, Della Valle acknowledged that Tod’s was guilty of some of the same maneuverings he now complains about in other brands. But he feels the company’s unusual approach to building its future, along with a steadfast resistance to the constant pressures of shareholders to meet short-term goals, ultimately will prove to be a new model upon which luxury brands can be based.
Tod’s is an interesting case study in luxury brands in that its history parallels many Italian fashion houses that started as small artisanal shops before exploding to worldwide renown based upon the success of an iconic product — in this case, the pebble-soled driving shoe. Yet during the highly acquisitive period of the Nineties, Tod’s did not acquire a grand stable of brands, but rather only one, the fabled French footwear brand Roger Vivier, of which Della Valle bought the trademarks in 2000. Tod’s did follow the example of other luxury labels by opening flagships around the world, but at a much slower pace, and while building stronger ties with its wholesale accounts. And Tod’s similarly bucked conventional business thinking by refusing to build volume by adding new product categories such as fragrances, or even ties, saying that neither made sense for a house whose identity was built on leather.
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Della Valle, who is 50, noted his own background was not so unusual, but that working alongside his father had instilled in him a sense of the business. After studying law, Della Valle joined the family firm in 1975, and three years later, introduced the famous driving shoe that became popularized on the feet of Italian industrialist Gianni Agnelli, and turned it into a real business when Della Valle hit upon the idea of naming his brand J.P. Tod’s, the preppiest-sounding name he could pull from the Boston phone directory.
“My story is the typical story that many families have in this business,” Della Valle said, noting that he still consults closely on business strategy with his family, which now controls about 65 percent of the Tod’s Group since its 2000 initial public offering. Going public, a move Tod’s made in tandem with a number of luxury houses, has been an experience that Della Valle reacted to with frustrations similar to those of other luxury brands — while the investment enabled the company to achieve its goals of expansion, it also has come with the cost of shareholder demands.
“There is the market that controls us every day, unfortunately,” Della Valle said. “But at the same time, we don’t change our focus. Our focus is the product. The product for us is our secret. What we are today is one group that, in the luxury business, is maybe the smaller group…but our company has a very strong power to grow quickly, but with a consistency and not only to make turnover.”
Tod’s is ready to develop its brands — the J.P. Tod’s mark and its family of Hogan and Fey, as well as Roger Vivier — around the world, he noted, but stressed that such growth would have to come through long-term programs. Licenses and product extensions make little sense for Tod’s, he said, but suggested Roger Vivier could be a different case, noting that a cosmetics line under the label could be a possibility within the next year.
“We don’t want to make mistakes,” he said. “We take more time to grow with the good sense of consistency. We give one strong message to our customers that, please, if you trust in us, we make for you as you want. It’s not easy.”
It’s never as easy as it sounds. But Della Valle had several suggestions:
- Controlling every step of production, from buying leather to owning its own stores, is critical.
- Luxury alone is not enough. He defined Tod’s as “contemporary luxury,” meaning each item is infused with a sense of style, as well as functionality. “We don’t forget we need to have useful product,” he said.
- For Italian makers, the “Made in Italy” label can function as much as a distinction of luxury as the actual brand name.
- Licenses and secondary lines may be an opportunity to grow sales fast, but they bring the risk of betraying the consumer.
- A balance between directly owned retail and strong wholesale accounts helps to guarantee the image of a brand in the consumer’s eye, and also offers a testing ground for items that could be greater hits at broader distribution.
- A singular identity at retail is no longer interesting to consumers, who are now seeking more individual looks for themselves as well as in their shopping destinations.
“If I am in New York, London, Paris or Milan, what do we see?” Della Valle asked. “In the same important street or avenue, there are the same brands, with the same stores, the same furniture, the same windows in the same moment around the world. This was a powerful sign about a brand 10 years ago, but today, my opinion is that it is a mistake. It’s boring.”
Even for Tod’s, addressing these issues is a company-wide process. Considering Tod’s has more than 4,000 employees, it’s no small feat to ascribe the image of a small artisan without changing the quality of production.
“But this is the only way for the future. We need to completely change our mentality,” Della Valle said. “I hope by the end of 2005, we will completely change our machine. I understand the need, because I, too, am the consumer, and I think it’s boring — if I were a woman, especially. I don’t want to see the same product for two months in the same stores.”