Luxury powerhouse Gucci brings craftsmanship in-house
Reuters - Jun 12th 2018, 14:51
Kering’s fashion powerhouse Gucci is bringing more manufacturing in-house as luxury firms step up efforts to meet demand from Chinese shoppers with slicker operations.
Gucci, which says it could one day overtake LVMH’s Louis Vuitton as the world’s top luxury brand by sales, also outlined plans at its strategy update to almost halve its reliance on independent leather goods suppliers.
The step comes as labels including Britain’s Burberry and France’s Vuitton begin to levy greater control over their production or invest in speeding up internal processes to ride a rebound in luxury goods sales.
Gucci, one of the fastest-growing fashion brands in 2017 after a flamboyant design makeover, plans to cut its use of independent suppliers to 40% of leather goods production over the long term, from 75% now.
The Italian brand aims to halve the turnaround time between a product’s conception and delivery in store as a result, CEO Marco Bizzarri said, as well as secure the production capacity it needs to match its punchy sales ambitions.
"We want to reduce the lead time, and it’s not possible if you’re too scattered with small suppliers," Bizzarri told reporters at Gucci’s new "ArtLab" site outside Florence, where it will do prototypes of bag and shoe designs.
"We also need to make sure other brands are not stealing supply. Because of the growth we’re having we need to protect our artisans," Bizzarri added.
Italian brands have traditionally worked with an external network of dozens of local artisans on items such as handbags, while French peers Hermes and Vuitton almost exclusively use their own workshops.
Gucci has bought out 10 local suppliers and said it was closing in on another 10, though the shift to what the brand considers internal production will mostly involve creating joint ventures with external workshops or giving them exclusive contracts.
Even that can help stabilise production when some manufacturers in Italy are vulnerable.
Some are "tiny, almost family-like workshops which have know-how but where there are often questions over whether they are sustainable, or regarding succession," said Olivier Salomon, MD at consultancy Alix Partners in Paris.
Other brands with a big focus on leather goods like Milan-based Prada are grappling with these issues too as they consider taking more production in-house, partly to nurture new generations of skilled workers.
"One of the problems with outsourcing is one of quality. You need artisans ... and the problem with craftsmanship is one of training. You can’t find these kinds of people everywhere," Prada chairman Carlo Mazzi told Reuters, as the label inaugurated a new industrial site in eastern Tuscany last week.
While traditional skills are in demand, fashion brands are also seeking to build up internal expertise at a time of radical innovations in the materials used in fashion.
Gucci’s Bizzarri cited leather grown in laboratories as one potential industry game changer, albeit a far-off one. Part of Gucci’s ArtLab remit is research and development, as the brand seeks to perfect production methods new and old.
At the site, workers buffed python skins dyed orange and blue for use in samples; elsewhere, a robot stress-tested sneakers, rhythmically bending the shoes back and forth.
"If you internalise production you are able to experiment much more in terms of innovation," Bizzarri said.BusinessDay
Massmart appoints new CEO, but shares fall on warning earnings will halve
24/05/2019 - 08:39
Shares in Massmart, which owns the Game and Makro chains, fell 12.5% to R68.24 in early trade on Thursday after the retailer said earnings in the six months to June could more than halve.
South Africans are spending less on their weekly shopping trip
23/05/2019 - 09:44
Tiger Brands, which carries brands including Koo canned foods, All Gold, and Tastic rice, said that revenue from continuing operations fell 2% to R15.4 billion in the interim period.
Bidcorp expects higher food inflation in SA
23/05/2019 - 09:16
Global food-services group Bidcorp expects rising food price inflation in SA, where food producers and retailers are grappling with higher costs and low selling price increases.
Pick n Pay's partner Velokhaya expands to include feeding scheme for 200 children daily
21/05/2019 - 15:50
Almost 500 Pick n Pay Head Office employees – in partnership with Mellon Educate – volunteered their time and skills to build a kitchen and dining area at Velokhaya Life Cycling Academy in Khayelitsha last week. With this new facility, Velokhaya will launch a daily feeding scheme for around 200 children.
Nike and Adidas join 173 US shoe retailers in call to avoid ‘catastrophic’ tariffs
21/05/2019 - 12:23
Nike, Adidas, and other footwear giants urged President Donald Trump to reconsider his tariffs on shoes made in China, saying the policy would be “catastrophic for our consumers, our companies and the American economy as a whole”.