Italy, from a luxury powerhouse to third party manufacturer (part 2)
Luxury is exclusivity, quality, durability, innovation, lifestyle. But is this definition the main drive behind the unstoppable quest of the world for the major Italian luxury fashion brands? Unfortunately, not for the Italian brands (regardless of ownership), but more for French, Italian, American or British brands.
Take for instance Mayfair’s Bruton St, Mount St and Brook St – London’s most hip and sought after luxury fashion shopping destination. No Italian luxury fashion house is present with an outlet but Italian made luxury handbags and shoes dominate the luxury stores in the area at Vivienne Westwood, Alfred Dunhill, Nicholas Kirkwood, Harrys of London, Oscar de la Renta, Christian Louboutin, Balenciaga, Sonia Rykiel, Lanvin etc.
Instead, Italian fashion houses are crowding New and Old Bond Street, each muscling in among giants such as Chanel (recently opened – second largest in the world), Louis Vuitton (Maison status store), Burberry and Ralph Lauren – each almost twice the size of any of the stores of Italian luxury brands such as Gucci, Ferragamo, Missoni, Corneliani or Cesare Paciotti. With its recent opening of its men’s tailoring store, Dolce & Gabbana joins the likes of counterparts Prada, Armani and Zegna which have larger stores.
Back at The Savoy, upon entering my Thames view suite, a vintage Pathé footage, playing on the TV caught my attention entitled ‘Dior Circus Come to Town’, a show hosted at The Savoy in 1950. An anchor from the BBC with a musky voice was commenting ‘Christian Dior, French creator of the new look, valued at 30.000 pounds 30 dresses go on parade… It’s all for show and look only - to buy, you must go to Paris’. Isn’t this, afterall, what luxury should have always been about? Why would luxury fashion brands nowadays compete with each other in number and size of stores (of course, larger and larger)?
I wonder if this obssessive quest to produce hundreds of thousands of bags and shoes will, in the near future turn into a waste of Miuccia Prada’s unique talent to produce the most innovative apparel and accessories, with the most surprising catwalk shows or fashion installation… Gucci’s outstanding quality leather goods will become obsolete with more and more predictable designs…and Armani’s legendary and timeless elegance will soon be a matter of the past in between the hundreds of Jeans, Exchange, Emporio – all labels predominantly made in Asia.
That is why, I find Dolce & Gabbana‘s recent London store opening as a powerful statement, bringing their Italian ‘savoir faire’ in men’s tailoring with the goal of ‘turning British men into Latin lovers’ (interview in The Times). They did not open on Saville Row, the quintessence of British tailoring, but carved out a realistic positioning for their men’s tailoring collection, with a classic luxury store on New Bond Street, a subtle blend between their Italian roots and British touches.
I cannot help but wonder what is the actual long term strategic vision on luxury positioning of Prada, Ferragamo, Armani or Gucci opening hundreds of stores in the past 3 years in both mature and emerging markets around the world, from Asia, Europe to the U.S. and South/LatinAmerica? And their stores look identical (same interior design by the same architect) and the exact same product selection.
Is it proximity to consumers or a hunger to cash in on nouveaux riches who prefer to buy locally given the hassle of taking a visa, the lack of travel culture and lifestyle or simply because this is the best and most evident way to show off among their piers? As all above brands make more than half of their sales from accessories (bags and shoes), the focus on volume is evident. More Koreans, Indonesians or Russians will find themselves wearing the very same Prada bag or Ferragamo pair of shoes…
In the case of men’s brands such as Zegna or Canali which operate hundreds of stores worldwide, proximity is justified by their Made to Measure (Su Misura) service but also the fact that they address a completely different consumer target (successful men in different walks of society, whose aim is not to show of).
And this ‘conquer’ the world retail strategy is not new to Italian luxury fashion brands. One of the early ‘masters’ of retail expansion, with hundreds of franchised stores worldwide has been Max Mara. Although family owned, Max Mara has been gradually losing its luxury positioning, for several reasons – the lack of adapting to nowadays communications tools (Max Mara launched their first ever site less than 4 years ago) not to mention the confusing mix between 5 different labels under the Max Mara umbrella, some at low price points, adding confusion and lack of differentiation.
The Max Mara owner family might have the backing of their financial investments (they own major stakes in one of Italy’s largest banks) does not seem to make up for lost ground in terms of positioning, identity and inconsistency – especially in retail. Even in London, one of the most important luxury shopping hubs of the world, the Max Mara flagship on Bond Street features a strikingly different (old) retail concept, which is unrecognizable to a store featuring the new retail concept, in Milan or Shanghai. Is Max Mara’s notable absence from India a sign that identifying local franchise partners has become much more challenging and not necessarily because of market conditions but the lack of wareness of the brand and an uncertain future.
French giant Louis Vuitton has probably best understood the danger of over-exposure and excessive visibility and has been quick to react in adapting in retail development strategy – open less stores and focus on opening large Maison stores, in the biggest cities in the world, each with a distinct architecture and strongly enganged with the local lifestyle and culture (each Maison store of Vuitton features art exhibition spaces promoting local artists).
The offering and service in Maison stores is also upgraded from a regular store, with Personalization and Bespoke service exclusively available at this type of stores. Opening (recently) permanent in-house Ateliers such as the one at the Vuitton store in Soho NY is also a major departure from the travelling or pop up exhibitions. This way, consumers can have a first hand experience and understanding craftsmanship. Vuitton’s resistance to open within airports is also showing huge benefits in terms of differentiation (there is only one Vuitton store in an airport - at Seoul’s Incheon, but it is more a shopping mall within an airport. The absence of Vuitton products at outlet shopping centres which are mushrooming in Europe is also a major differentiating factors.
But Italian luxury brands cand learn from Italian luxury brands too. It is the case of Valentino, taken over since last year by a Qatar investment fund, which under the leadership of Stefano Sassi has been concentrating on directly operated stores, limiting francising and wholesale. Most importantly, the recent renovation and complete redesign of Valentino’s Paris flagship and the annoucement of the upcoming 2.000 sqm store opening on New York’s Fifth Avenue reflects Sassi’s sensible strategy to open fewer but larger stores, only in the major cities. This way, the brand will be able to preserve and even enhance exclusivity.
Another Italian luxury brand which may stand as a reference for the big players of Italian luxury is Loro Piana. The family owned group has made no compromise in terms of store sizes and has focused on relevance, more than proximity when it comes to retail expansion. Given its exceptional sports products, Loro Piana is opening temporary stores in major upscale holiday destinations such as St Moritz or Gstaad for winter sports; Capri, Portofino and Porto Cervo for summer yachting collections and St Tropez and Forte dei Marmi for summer lifestyle.
‘Diffusion’ or ’second lines’ are also a means of avoiding the risks of dilution of luxury positioning, unless the lines have a specific, well define target and concept such as in the case of Moncler
Oliver Petcu in London