MILAN — Only a week ago, Brioni unveiled a capsule collection designed in collaboration with Brad Pitt, but much less glitzy news was made public on Tuesday.
Reflecting the struggles faced by the formal men’s wear segment, accelerated by the impact of the COVID-19 pandemic, Brioni presented an industrial plan for the 2021 to 2025 period, which involves personnel cuts across several of its production sites.
“Brioni has been forced to adopt a long-term policy of intervention which cannot be delayed,” said the company in a statement on Tuesday evening, following a meeting held at the Ministry of Economic Development, in the presence of representatives from the Ministry of Labor, the regions of Lombardy and Abruzzo, where Brioni is headquartered, and the National and Territorial Secretariats of the trade unions represented within the company.
In the period until 2025, Brioni estimated it will let go of up to a maximum of around 320 workers, directly and indirectly employed in production, rationalizing costs and scaling back production sites in the towns of Penne (Pescara), Montebello di Bertona (Pescara), and Civitella Casanova (Pescara), which are staffed by more than 1,000 employees. The goal, said Brioni, is “to implement all necessary actions to relaunch and develop the brand.”
However, to reduce the social impact as much as possible, Brioni is working with the unions to find measures for reemployment, use wage support connected to the COVID-19 period, the Extraordinary Redundancy Fund, all available social safety nets, early retirement and forms of incentives and economic compensation, and reallocation within the group.
Brioni is controlled by the French Kering Group, which acquired the label in 2011, when it was known as PPR, from the descendants of the company’s founders, Nazareno Fonticoli and Gaetano Savini. Brioni pointed to Kering’s ongoing “strong support.”
As per the new plan, the men’s wear specialist will focus on developing accessories and new product categories, “concentrating on high-end leisurewear” in order to expand its customer base, while retaining production in Italy.
The company is also set to rationalize fixed overhead costs, optimize investments in communication and distribution channels, and reorganize its “production matrix in order to return Brioni to levels of efficiency and profitability that are sustainable over the long term.”
In an interview with WWD, Riccardo Colletti of Italy’s Filctem CGIL trade union, expressed his surprise at Brioni quantifying the number of job cuts. “We ended the meeting at the ministry avoiding to put a number on the potential cuts,” he remarked. “It does not make sense to present a development plan, which includes the expansion into other categories, by shedding employees.”
He also said the unions had long been asking for changes that would help the company be more in tune with the times, but they had largely gone unheard.
To his knowledge Kering has been supporting Brioni financially and “has every intention to contain the crisis through relaunch plans.”
Colletti said it was “undeniable there is a crisis and that COVID-19 has set back formalwear, so we must rethink the market, which moves in a different way and we must be proactive in developing job training, interventions on the operations and distribution. For example, we understand there are a number of stores that do not bring added value or visibility to the brand, so they must be revisited in a more functional way.”
Colletti said the unions will verify details of the plan over the next few months to understand how Brioni wants to proceed and what activities it wants to let go of.
Brioni is led by chief executive officer Mehdi Benabadji, who in 2019 succeeded Fabrizio Malverdi. Benabadji was previously chief operating officer of Kering, in charge of the group’s logistics and industrial activities.
The brand is designed by creative director Norbert Stumpfl. He succeeded Nina-Maria Nitsche, who left Brioni in 2018 after only one year, and who had been the third creative director in less than three years. That included Justin O’Shea, who had been handpicked by former CEO Gianluca Flore, and left after only six months in 2016 in the wake of changes that were seen as too sharp a departure from the style of the brand, such as signing the members of Metallica to front its communication.
Explaining the reasoning behind its plan, Brioni said the dramatic changes in the high-end men’s wear sector in the past few years, in addition to the impact of the pandemic “has led to an ongoing excess in productive capacity for all players in the sector, together with unsustainably disproportionate industrial costs. In light of all these factors, therefore, the protection of Brioni and its future in Italy depends on the ability to give more permanent flexibility to its structure, while still fully respecting its outstanding quality of production, which represents Italian excellence on a worldwide scale.”
Brioni admitted this was a “painful decision,” and said it would proceed in a “constructive dialogue” with the unions, “with a view to implementing all actions required to defend and strengthen the market it represents, and must continue to represent in showing the pride of Italian craftsmanship to the world.”
Colletti cited Corneliani and Pal Zileri as other men’s wear brands that are going through similar difficulties and said the “fashion table” with the ministry is meant to support the industrial activities, helping to gain access to specific funds from Italy and Europe. “Made in Italy is at the center of it all, its traditional manufacturing, very specific, hand-made craftsmanship and skills, and to throw it all to the wind, I think is wrong.” He said there would be more clarity regarding the future of Brioni at the end of the year, and that it was “wrong and premature” to provide any specific number in terms of job cuts now.
As reported, last month, Bahrain-based investment fund Investcorp agreed to create a NewCo that will invest 7 million euros in the Mantua, Italy-based men’s wear brand Corneliani. If Investcorp complies with the agreement, Corneliani will also receive a 10 million euro investment from the Italian government through the Ministry for Economic Development as part of the “Re-Launch” Decree developed last summer by the Italian government to support the restart of the country after the global pandemic.
Last summer, Corneliani decided to submit an application for admission to the composition with creditors procedure, following a decision in November 2019 to cut 130 jobs in its headquarters.
Pal Zileri has also been severely impacted by the pandemic and, at the end of last year, Forall Confezioni SpA, which produces the storied men’s wear brand, informed trade unions that it planned to cease the operations of its manufacturing plant in Quinto Vicentino, outside the Italian town of Vicenza. This means laying off 250 employees working at the plant, but the number can reach 400, including employees in offices and sales assistants in stores around the world.
Ceasing operations would allow Forall’s employees to be paid through the state’s extraordinary wage fund, or CIGS, and allow the brand to continue to exist, while the owner, Mayhoola, will try to find an industrial partner for the plant.