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Why Vetements is Moving to Zürich

The cult fashion collective is leaving Paris for a ‘clean slate’ — and a favourable tax regime — in Switzerland’s largest city.
Historic Zurich city center | Source: Shutterstock
  • Chantal Fernandez

ZÜRICH, Switzerland — Three years after launch, Vetements is leaving Paris for Zürich. Chief executive Guram Gvasalia told BoF that his brother Demna Gvasalia, creative director at Vetements and artistic director of Balenciaga, sees the city as a "clean slate."

"Paris kills creativity. Its environment with the 'bling bling' is destructive. I'm done with the whole showing-off in fashion and the superficial glamour," Guram Gvasalia explained in the Swiss newspaper Tages-Anzeiger (TA).

In February, TA reported that 40 of Vetements’ employees had already made the move from their former bases in Paris and Dusseldorf to Zurich’s Binz district; that the designer himself had found a new home on Lake Zürich in nearby Küsnacht; and that the rest of the team would follow by the end of the summer. The new Vetements headquarters are housed in a four-storey building, complete with atelier and archive.

Switzerland has long been a haven for multinational companies, including fashion businesses, because of its favourable tax regime where corporations with foreign operations get preferential treatment. In 2010, the Gucci Group (then owned by PPR, now Kering) transferred its headquarters from London to Cadempino, in the Italian-speaking section of Switzerland, and, today, senior Gucci executives have Swiss email addresses. Philipp Plein, Zegna, Hugo Boss and Guess have also established administrative and supply chain hubs in the southern Swiss canton of Ticino.

“In Switzerland, there is always the tax reason,” said Yannick Aellen, director of Mode Suisse. “In most countries you end up paying on income, but in Switzerland, some cantons get deals with foreign residents and they pay sometimes on [how much they spend per year],” explained Ronen Palan, professor of International Political Economy at the City University London. What’s more, while Switzerland’s federal taxes are more favourable than elsewhere in Europe, the country’s powerful cantons can often negotiate “tailor-made” tax agreements with individuals that are rarely publicised.

“Taxes are obviously another reason for the move,” Guram Gvasalia told TA. “But not the most important one — otherwise we would have moved to Zug.” Palan said Zürich has historically struggled to complete with Zug, a neighboring canton, for special tax agreements. “Zürich is not a cheap place,” he said. What’s more, the appreciation of the Swiss Franc relative to the Euro, which is declining in value due to Brexit and other factors, poses potential drawbacks. It is also said to be part of the reason why Armani relocated its offices from Ticino back to Milan in 2016.

Yet Gvasalia confirmed to TA that Vetements will pay fewer taxes in Zürich than in Paris, though there are additional reasons for the move. The city is also home to small but vibrant fashion, architectural and graphic design communities, but not far from Paris. “You’re kind of cut off from the regular expected fashion industry, but you can be there very, very quickly — it’s a four hour train ride or a very short flight,” said Aellen. “Switzerland is in a very comfortable position — it is wealthy, it’s kind of politically independent, so we are still doing quite well here.”

The country is also more open to immigrants than France. “It takes 9 months to transfer a new employee to France,” Guram Gvasalia told TA. Vetements, which started as an anonymous collective of designers and remains wholly owned by the two Gvasalia brothers, who are originally from the post-Soviet state of Georgia, employs staff from all around the world. “In Paris, we couldn’t grow any further.”

Editor's NoteThis article was revised on 18th March 2017. An earlier version of this article misstated that Cadempino was located in the Italian-speaking section of Italy. This is incorrect. Cadempino is in Switzerland.

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