“It’s time to choose”

To grow in an increasingly global and competitive context, companies in the fashion and luxury segment must optimize productivity.The 20th Pambianco Convention titled “Il momento delle scelte” (it’s time to choose), analysed the paths that fashion and luxury companies must follow in order to adapt to the changes in a market that is increasingly competitive and global.Over the past decade, the fashion sector showed unprecedented growth. In the last 5 years alone, demand has increased by 70 billion euros, 30% of the total, which is also due to the opening up of new and wealthy markets (China and emerging markets), price choices and the development of the distribution network, driven primarily by single-brand stores in addition to new channels like outlets, travel retail and online. With the slowing down of network expansion justified by the fact that the increase in store openings now exceeds the increase in demand, growth has moved from new openings (stores and markets) to the optimization of performance and the consequent increase in profitability and cash flow.What emerged at the convention is that the future is rosy for three types of companies: luxury - a longterm growth segment thanks to increased wealth in emerging countries; accessible luxury – also a long-term growth segment because it is becoming the European benchmark (luxury costs too much) and is advantaged by the development in emerging countries of a middlehigh social class with readily available money; retail chains – a long-term growth segment on the wave of the “democratization of beauty” in the retail distribution channel. In addition to these three types are companies with much lower performance levels.But they will have important challenges to face. The first (luxury companies) must invest heavily in retail and real estate and take into account increasingly complicated pricing in various countries, the management of customer relations, digital, and stock management. The accessible luxury companies must increase in size, develop foreign markets and retail, and tackle the increasingly complex and multifaceted management of collections, product categories and articles.The retail chains will have to cope with developing in foreign markets without being able to take advantage of Made in Italy, increasing company size, and the presence of global and local competitors in already consolidated individual countries.The companies that do not belong to these categories must decide on the business model to adopt and the relevant strategies.In conclusion, it can be said that the first categories of companies in the fashion and luxury sector will again find great opportunities for development in the mid-long term. The horizon could be less distinct for the “others” that do not possess the positive characteristics of the first three types of companies.