Pambianco, established consultant in the Italian fashion industry, organized the 27th edition of its Fashion Summit analyzing the role that Italy plays today in the changing global landscape while also turning special attention to growing importance aspects such as digital and sustainability.
Analysing the Italian fashion industry
David Pambianco, CEO, Pambianco, interviewed Carlo Capasa, president of the National Chamber of Italian Fashion, who stressed the importance for brands to work in synergy and in defense of their supply chain and the fashion system to think from a European perspective.
Research by the consulting Pambianco compared Italian luxury ones are on average penalized by slower growth and lower profitability, partly because they are smaller. In the global luxury sector, which in 2021 had a turnover of €141 billion, and with a strong concentration in a few large groups if we consider that the top 10 groups are worth €136 billion out of a total of €141 billion, Italy is represented by four groups in the top ten, but altogether they represent €8 billion.
However, Italy reconfirms itself as the world's leading producer of luxury products thanks to a production fabric of excellence and districts that is unparalleled in the world. Unfortunately, however, the upstream segment in the supply chain, where Italy is the undisputed leader, is also the one with the lowest profitability.
Social and digital are the drivers of the future
Alessandra Di Valentin, Senior Industry Manager Fashion & Luxury at Google Italy, analyzed how the uncertainty that has characterized the macroeconomic scenario in recent years has generated significant changes in consumers' buying habits.
An increasingly social and digital shopping experience will lead to the creation of real micro-trends in the coming years that will alternate on the digital scenario faster and faster.
In addition, increased awareness of environmental issues will make consumers less and less likely to compromise on the sustainability of their purchases.
Laura Milani, head of luxury Made in Italy Hub, Tik Tok explained how the social network represents an increasingly used and appreciated channel for all targets and not only younger consumers. For all the users of this channel, even the content presented by fashion companies is perceived as more appealing and interesting by the consumer, so the collaborations between this social and the fashion and luxury world will increase significantly in the future.
In addition, more and more consumers want to research and learn about the characteristics of sustainable fashion, innovative materials, including organic cotton.
Other speakers described how among the upcoming new social networks, the youngest generations are moslty following there is Bereal, a social through which every member is allowed to do one single post per day whenever the organization decides it. Therefore the resulting posts are spontaneous, make-up free and less studied than it normally happens with other social media.
Erika Andreetta, EMEA Fashion & Luxury Leader Partner PwC Italy, illustrated a survey that presented some of the most popular consumption habits of younger consumers, including the propensity to buy more and more second-hand products.
Reasons for taking choice are economic (46%) and ecological (24% attention to sustainability, 27% fighting waste). Secondhand is useful for getting rid of the unnecessary (56%) but also for reducing waste (43%). Eighty-eight percent of New Generations are concerned about the environment. Out of that figure, 72% of them would be willing to radically change their habits to protect the environment (vs. 88% of Boomers). In addition, four out of ten consumers would be willing to pay a premium price for natural or eco-friendly fashion and accessory products. Thus, the choice of supplies and raw materials is key to deeming a company sustainable.
OTB’s vision and challenges
Renzo Rosso, chairman and founder of OTB Group, spoke, stressing that the group after the pandemic has recovered significantly reaching a turnover of €1.5 billion in 2021, expected to reach €1.8 billion by the end of 2022.
"All brands are doing well. Even Diesel is showing positive signs despite the fact that we sacrificed €400 million in sales by taking it out of lower level distribution to grow it and make it into something that does not yet exist in the market, a luxury casual brand,” explained Rosso.
Speaking about the Italian production fabric, he explained: "We have a fantastic supply chain, a strong bond with the artisans who work for us and to whom we have offered all the support technologically, in sustainability, and also financially. With the C.A.S.H. project we started 15 years ago, we were able to provide loans at 0.8 percent rate when banks, assuming it was okay, were providing loans at 10-12%. Italian craftsmanship produces 80% of all global luxury, and the French want to take it away from us, but we have chosen a different path, tying ourselves to these artisans; we are not interested in buying companies, much better for entrepreneurs to stay in charge of their small businesses and continue to be enthusiastic about their business and help create value,” he added.
Speaking of sustainability, the entrepreneur stressed, "Sustainability is not making a garment from recycled materials and selling it as 'green,' but much more. Sustainability is a 'state of mind' that must pervade the whole company, and it costs a lot of money. We sent our managers to courses at Bocconi University so that every day they address every single topic from the perspective of sustainability."
He also explained how important transparency is, especially for the younger generation: "If you are not sustainable, you lose credibility in the market. That's why we have already started to put traceability codes via RFD on some of our garments, and we are working so that in a few years all our brands can have this traceability."
How responsibility is leading OVS development
Stefano Beraldo, CEO of OVS, an Italian holding company that aims to close 2022 with a €1.5 billion sales, with more than 2,000 stores, between Italy and foreign countries, and more than 7,000 employees, has reached a market share of 9.3 percent, is the leader in Italy in the women's, men's, and children's clothing market, and operates under the Opera brands with Ovs, Upim, Massimo Piombo, Stefanel, Ovs Kids, Blukids, Croff, and Les Copains.
In 2022 OVS has cultivated cotton for its own use by occupying a surface of land of about 10 hectares and aims to reach 300 hectares in 2023 and further reach 3,000 hectares by 2025.
The company is also involved in developing a specific services through which it can recondition old apparel pieces from old collections. “We are working at a collaboration with the Polytechnic of Bari for a special project for reconditioning unsold apparel pieces that are not too tied to trends, as, for instance, womenswear. After the pandemic, in 2021, I could bring cash flow of €250 million in the company by selling pieces that could not be sold during covid, but we could sell them at full price the following year.”
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