Italian Luxury Brands Seek to Enhance Their Homegrown Appeal

Italian Luxury Fashion Groups Collaborate to Safeguard Supply Chains and Preserve Italian Heritage
Italian Luxury Brands Seek to Enhance Their Homegrown Appeal

Italy’s luxury fashion groups are shifting towards collaboration to protect their supply chains and the Italian heritage of smaller companies. The control of the supply chain has become crucial for luxury brands to ensure timely delivery of products and avoid reputational risks associated with raw material sourcing and labor conditions. Italy’s diverse network of specialist artisan workshops and family-owned labels presents an attractive opportunity for larger companies to solidify relationships through investment.

Prada and Ermenegildo Zegna, two renowned Italian fashion brands, recently acquired a minority stake in Luigi Fedeli e Figlio, a knitwear company based in Monza. Founded in 1934, Luigi Fedeli e Figlio specializes in cashmere and jumpers and is distributed in 13 own-brand boutiques and around 400 multi-brand stores worldwide. This investment follows Prada and Zegna’s joint acquisition of a majority stake in Filati Biagioli Modesto, a supplier specializing in the production of cashmere and luxury yarns.

Patrizio Bertelli, leading shareholder and chairman of Prada Group, stated that the investment in Biagioli aimed to revive a struggling company, while the investment in Fedeli aimed to support its growth. He emphasized that smaller Italian companies have faced complex challenges in recent years, including generational handovers and expanding into new markets. Bertelli believes that Italian brands have clung to independence for too long and are now realizing the importance of collaboration.

Italy is home to thousands of small manufacturers that account for 50% to 55% of global production in luxury clothing and leather goods, according to consultancy firm Bain. Gildo Zegna, chairman and CEO of Ermenegildo Zegna, highlighted the importance of preserving “made in Italy” and strengthening the Italian supply chain, both directly and indirectly. Italian luxury groups face competition from French giants like LVMH and Kering, which have also acquired suppliers in Italy, particularly in the leather industry.

In May, LVMH announced its majority stake in Nuti Ivo Group, an Italian company specializing in leather products since 1955. Private equity firms have also recognized the investment potential and started consolidating suppliers into larger entities. Jean-Francois Palus, managing director of Kering, stated that the luxury group is increasingly bringing production in-house to ensure traceability, quality, sourcing of materials, shorter lead times, and competition for skilled artisans.

The collaboration between luxury fashion groups in Italy reflects a new era of cooperation to protect the country’s supply chain and heritage. By joining forces, these brands aim to strengthen the “made in Italy” identity and preserve the know-how within the country. As the industry evolves, collaboration becomes essential for sustained success and growth in the global luxury market.