Italy’s luxury fashion industry has traditionally been characterized by independent, family-owned companies that fiercely guarded their autonomy. However, in recent years, these luxury groups have started to collaborate and form partnerships to protect their supply chains and support smaller Italian companies. This shift in mentality reflects the growing importance of supply chain control in the luxury market, as brands strive to ensure timely delivery of their products and avoid any reputational risks associated with raw material sourcing or labor conditions.
One example of this collaboration is the partnership between Prada and Ermenegildo Zegna. In June, they jointly acquired a minority stake in Luigi Fedeli e Figlio, a knitwear company based in Monza. Luigi Fedeli e Figlio, founded in 1934, specializes in cashmere and jumpers and is distributed through its own-brand boutiques and various multi-brand stores worldwide. Prada and Zegna had previously invested together in Filati Biagioli Modesto S.p.A., acquiring a majority stake in the cashmere and luxury yarn producer.
The goal of these investments is multifaceted. On one hand, they aim to revitalize struggling companies and help them grow. On the other hand, they strive to preserve the Italian craftsmanship and know-how that make “made in Italy” products so highly valued globally. The Italian luxury groups face competition from French luxury conglomerates like LVMH and Kering, which have also made investments in Italian suppliers, particularly in the leather industry. LVMH, for instance, recently acquired a majority stake in Nuti Ivo Group, an Italian company specializing in leather goods. Private equity firms have also seized investment opportunities in this sector by consolidating smaller suppliers into larger entities.
In addition to these collaborations with French counterparts, there have been other instances of Franco-Italian cooperation in the luxury industry. Chanel, for example, acquired a stake in cashmere yarn company Cariaggi Lanificio in partnership with Brunello Cucinelli. While Italy may not have a major luxury hub, it has entrepreneurs who possess the ability to cultivate the right relationships at the right time. The approach within the industry has shifted towards greater collaboration in order to tackle more complex challenges.
Prada and Zegna’s decision to invest together in Luigi Fedeli e Figlio was strengthened by their friendship, which grew during the difficult times of the Covid-19 pandemic. The investment was facilitated by their involvement in the Camera Nazionale della Moda, the industry body that played a fundamental role in bringing them together. This collaboration reflects a more confident and outward approach from Italian luxury brands, which have become more organized and managerialized, making them more open to working together.
While these collaborative efforts are indicative of a greater willingness to communicate and cooperate, it does not necessarily mean that major mergers are on the horizon. However, the partnership between Zegna and Bertelli, who now serve on the boards of Fedeli and Biagioli, leaves room for further investments further down the supply chain. If new opportunities arise, they are likely to seize them, whether jointly or individually.
In conclusion, the luxury fashion industry in Italy is witnessing a shift towards collaboration and partnership as brands recognize the importance of protecting supply chains and supporting smaller companies. By teaming up with each other and investing in these companies, Italian luxury groups aim to strengthen the “made in Italy” identity and ensure the preservation of artisanal craftsmanship. While competition from French luxury conglomerates remains, the newfound spirit of collaboration among Italian brands demonstrates a more confident approach and willingness to work together for mutual benefits.
Useful links:
1. Zegna and Prada’s investments in Luigi Fedeli e Figlio
2. The importance of supply chain control in sustainable fashion
