MILAN — Italian denim brands are looking East to boost their businesses, as the sheer number of potential customers and China’s appetite for all things Italian lure established and new labels alike.
The prospects in the area are so promising that “it’s difficult to make forecasts and define the market’s potential, as business could even grow much more than estimated,” said Matteo Sinigaglia, chief executive officer of Replay.
Replay’s parent company, Fashion Box, is capitalizing on Sinigaglia’s experience in Asia, as the executive has lived in Hong Kong for 18 years, and is investing in retail expansion there. In December, Replay signed a joint venture with Alan Fang’s Toppy Group. Since the beginning of the year, the brand has opened 27 stores in China and expects to have 70 units in two years.
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Sinigaglia said “evolution there is very rapid, the economy is favorable and there are valid infrastructures,” which all contribute to fuel growth. While he underscored how consumers are “more and more educated,” Sinigaglia conceded it is somewhat more difficult to make “premium denim acceptable.”
However, given that the population travels globally and taps into social media and the Internet, the Chinese are informed and open to new brands. Sinigaglia said companies that are well prepared are poised to grow more in the area, also considering the different fits required there. In addition, “because the development is so rapid, it’s important to set up locally” to be more present on a daily basis.
Diesel founder and president Renzo Rosso noted that “visibility is fundamental” to grow in China, as is brand awareness.“
A strong brand is a must. If you don’t have it, you don’t go anywhere,” he said.
Demand in China is increasing rapidly and the country’s gross domestic product is growing, which make investments in the region a priority for Diesel. However, Rosso said he is also looking at developing the Russian, Brazilian and Indian markets without neglecting a more established market like the U.S.
“We are aiming at tripling our sales there [in the U.S., up from the current $220 million],” said Rosso, who last year invested in a 20,000-square-foot flagship on New York’s Fifth Avenue and returned to Macy’s with the brand starting with the spring collection.
Giovanni Petrin, general director of Veneto-based Martelli Lavorazioni Tessili SpA, one of Italy’s top wash houses, which treats denim for brands such as Diesel, Gucci, Giorgio Armani and Dolce & Gabbana, said: “In China, customers are looking for famous brands that will help them show how successful they are.”
Petrin urged Italian brands not to lower their production standards and to invest in the next generation of craftspeople.
“The economy has pushed some manufacturers to pay less attention to details and delocalize in an attempt to cut costs, but niche and quality products are still selling,” said Petrin.
Precious materials, such as a blend of denim and cashmere; novelty details including silver buttons and rivets, and exclusive packaging are some of the elements Jacob Cohen’s management plans to export to new markets. Launched in 2003 by Nicola Bardelle, the company, based in Italy’s Veneto region, is only just now exploring China, said commercial director Marco Tiburzi. He compared Japanese consumers, widely respected as denim connoisseurs and exacting customers, to the Chinese, who are only now starting to appreciate the less visible qualities of denim and asking for more personalized pieces.
“They generally turn to fashion designers for jeans, but this is changing, as they are looking for more content,” said Tiburzi.
Filippo Zucchelli, who founded and launched the Get Lost label with his wife, Serena Rimacci, in spring 2009, said building a brand in the home market is a must.
“Consumers in China look for known labels, and if you are well known in Italy, doors open automatically,” said Zucchelli. “They look to Italy as a reference point; the country is famous for its fashion and they check to see what happens here.” Rimacci, who described the line as “shabby chic,” said the company uses antique looms from the 1700s and invests in special treatments and washes, which “sometimes cost more than the fabrics.”
Produced and distributed by Velmar, a manufacturing firm controlled by Alberta Ferretti’s and Moschino’s parent company, Aeffe, Zucchelli is set on building the Get Lost brand in Europe while edging into China, India and the Middle East.
According to Italian fashion and textile consortium SMI Sistema Moda Italia, exports of men’s and women’s jeans to Hong Kong in the January-to-July period jumped 89.4 percent, compared with the same period the previous year. Exports to the U.S. rose 24.2 percent.
Martelli’s Petrin said Brazil is also emerging as a promising country, with a new middle-income customer appearing on the scene.
“Brazil is like China 20 or 30 years ago. There is an economic boom, with more wealth, more people who own houses, cars, phones, and even just the size of the population is a great potential,” said Petrin of the South American country’s population of about 201 million.
“South America is booming, showing growth and positive developments despite the high taxes there,” Tiburzi said.