The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
The two Italian houses said Tuesday they will each acquire a 40 percent share in Filati Biagioli Modesto, a cashmere yarn supplier based in the Tuscan province of Pistoia that counts Prada and Zegna, as well as Louis Vuitton, Dior, Chanel, Armani and Moncler, among its customers. The value of the deal was not disclosed.
The Biagioli family will retain a 15 percent stake in the business. The remaining 5 percent will be owned by textile industry veteran Renato Cotto, who is taking on the role of chief executive at the manufacturer.
Zegna Group chief executive Gildo Zegna and Prada group chief executive Patrizio Bertelli will join the company’s board, with Zegna serving as chairman.
Chanel, LVMH, Burberry have all been playing a role in vertical integration in the Italian fashion sector, buying up tanneries and handbag factories. The moves come as Italy’s famously fragmented manufacturing system risks further consolidation amid a downturn in the market and as the ageing leaders of its small, family-owned suppliers struggle to plan for their companies’ next generation. The total number of companies in Italy’s fashion sector have fallen by 20,000 since 2011, according to national fashion chamber CNMI.
The group’s flagship Prada brand grew more slowly but remained resilient in the face of a sector-wide slowdown, with retail sales up 7 percent.
The guidance was issued as the French group released first-quarter sales that confirmed forecasts for a slowdown. Weak demand in China and poor performance at flagship Gucci are weighing on the group.
Consumers face less, not more, choice if handbag brands can't scale up to compete with LVMH, argues Andrea Felsted.
As the French luxury group attempts to get back on track, investors, former insiders and industry observers say the group needs a far more drastic overhaul than it has planned, reports Bloomberg.