Tod’s weighs shift in collections sales strategy
Italian luxury leather goods group Tod’s is weighing up plans to scrap its six-monthly collections and instead release new products more frequently in the latest sign of the internet’s impact on the luxury sector.
Diego Della Valle, billionaire owner and chief executive of the Italian group, made the comments as Tod’s unveiled the completion of the first stage of a €25m restoration of Rome’s Colosseum, funded by the tycoon and his family, at the weekend.
Mr Della Valle said he expected the €250bn luxury sector to experience “another year of uncertainty”. Bain has predicted the industry will grow just 1 per cent amid plummeting sales to Chinese consumers and slower global tourist flows, due to geopolitical tensions and economic pessimism.
“Every brand needs to change the way in which it is thinking. We are thinking about instead of a collection every six months, to have new products every month or two months,” Mr Della Valle added.
Tod’s review of its sales strategy follows moves by big brands Burberry and Gucci to offer one-off, online-only, capsule collections, as well as instant catwalk sales available to buy online. The changes are in response consumers’ demand for swifter accessibility to luxury products as the internet fuels a taste for “buy now, wear now”.
Mr Della Valle described Tod’s as taking a “pit stop” 20 years after listing on Milan’s stock exchange to ready itself for the next 20 years.
He said he expected all of Tod’s brands, which also include Roger Vivier, Fay and Hogan, to be “growing again by the end of the year”. Tod’s, which makes 93 per cent of its revenues from leather goods, saw like-for-like sales fall 12 per cent with overall sales falling 3 per cent to €250m in the first three months of this year.
Mr Della Valle said did not envisage any long-term negative impact from the Brexit vote. Tourism to London could be hit “for three months”, he said, but added that London “is a global city, tourists will come back”.
Part of the transformation under way in the luxury industry, as it grapples with changing consumer sentiment, has involved a wider embrace for sustainability and philanthropy.
A recent report from consultants BCG for Italian luxury industry lobby group Altagamma showed that sustainability is particularly important among sought after 25- to 35-year-old consumers.
Mr Della Valle is one of Italy’s best-known business leaders who also owns Fiorentina football club and a stake in national newspaper Corriere della Sera. His company’s Colosseum donation, which has funded the restoration of 31 arches and 110,000 square feet of Travertine marble returned to a creamy white, paved the way for a wider trend in the “Made in Italy” luxury industry.
The Ferragamo family have since gifted almost €1m to the Uffizi Museum. The Zegna family behind luxury group Ermenegildo Zegna recently undertook a massive clean up of the Cinque Terre on the Italian Riviera. Brunello Cucinelli donated €1bn towards the restoration an Etruscan arch in Perugia.
“There is a real cultural change,” said Mr Della Valle of both the private funding push and the demand for ethical business practices, particularly from younger consumers.
But he argued the onus on business to give back to has become more urgent amid rising populism in Europe, including Italy, and anti-establishment sentiment.
“The real message here is: It is time to ask everyone in the business world to give a hand. It is not only about practical help but an overall help for the credibility of the country,” he said. “Today is a time to stop talking and get stuff done.”