Oct 17, 2012
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Italian-speaking Switzerland, strategic hub for brands

Oct 17, 2012

"Before, the Italians asked for only a PO box in Ticino. Now they all want to come here! Within the past six, seven years, the movement has accelerated. The number of Italian fashion companies, as well as those from the United States and Germany, which have settled in the canton has increased exponentially," said a Swiss consultant specialising in the fashion industry.

Abercrombie & Fitch, Armani, Guess, Gucci, Hugo Boss, La Martina, Marni, Michael Kors, Prada, Tom Ford, VF Corporation, Zegna ... The list continues. According to the president of the Chamber of Italian Fashion, Mario Boselli, "it is just an incidental phenomenon, which involves the decisions of individual businesses." But up close, it begins to look like an exodus to Switzerland.

"In the wake of multinationals and large brands, it has been some time since the SMEs started arriving," said the sales manager of a company specialising in the construction and leasing of industrial space. The Mendrisio district, located in the southern part of the canton at the Italian border, is now saturated and foreign companies are being forced to move further north. This has been the case for the Gucci Group, which has been present in Switzerland since 1996. Having subsequently opened a store in Bioggio near Lugano in 2003, the company announced in June that it would make an investment of 40 million Swiss francs. This is to be allocated to the construction of a new 320,000 m² logistics centre in Sant'Antonino near Bellinzona, to manage the global shipments of all its brands, including Gucci, Bottega Veneta, Yves Saint Laurent, and others.

Zegna was the first to open a location in Ticino. Photo: Sakis Lalas

Today, the "Fashion Valley," as this Swiss fashion district has been dubbed, employs nearly 4,500 people (of 28 nationalities) and has a total turnover of 10 billion euros, according to the estimations made by Ticino Moda, the association of the 50 industry companies. "The phenomenon began 30 years ago. Italian brands came to Ticino, where the textile industry had a strong presence at the time," said Franco Cavadini, chairman of Ticino Moda. The pioneer was Ermenegildo Zegna, who came to Switzerland in 1976 in order to limit delivery problems caused at the time by repeated strikes and political instability in Italy. Today the luxury menswear brand has an office entirely dedicated to the supply chain and three production sites on the outskirts of Mendrisio, where it makes its bespoke suits and ready-to-wear garments for Gucci, Yves Saint Laurent and Tom Ford.

Zegna production site in Mendrisio. Photo: Sakis Lalas

Aside from Zegna, who mostly employ a highly specialised Italian labor force, very few groups have kept fashion production activities in Ticino. "Today, brands mostly transfer their management and financial logistics, sales, quality control, etc.. to the area," said Franco Cavadini, who dreams of creating a true fashion district between Ticino and Lombardy.

In Switzerland, foreign companies enjoy many benefits, beginning with a much lower tax rate than in Italy. "Here it is around 25%, while the VAT is at 8%," said Franco Cavadini. Special customs warehouses also allow for the transit of products from around the world without being taxed, while customs formalities are kept to a minimum. Generally, entrepreneurs here do not waste time with bureaucracy. Everything is simplified and labor legislation is particularly flexible and very favorable."

The Ticino site of Hugo Boss. Photo Sakis Lalas

Finally, there is the linguistic factor: Italian is the native language, but the possibility of finding quadrilingual staff is also very much appreciated. In recent years, Switzerland has thus transformed into an efficient service provider for brands. Development, procurement, marketing, invoices, catalogs, customer service ... "We have here not just production, but the entire management of the value chain," explained Stefano Rizzi, Director of the Economics Department of the Canton of Ticino.

"In Switzerland, there is undoubtedly greater efficiency at all levels. Located on the outskirts of Milan and Germany, Ticino offers a strategic location for shipments to Italy and Europe. This country's political stability is also its point of strength, and provides an essential safeguard for foreign companies that relocate to the region," said a young manager working in Switzerland for a major Italian label.

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