The future of luxury also lies in the United States, Japan and Brazil
One way or another, the uniquely distinct markets of the United States, Japan and Brazil are each expected to play a major role in the growth strategies of companies in the luxury sector. Such is the thinking of the sector’s primary players who participated in the “Milano Fashion Global Summit,” held December 4 in Milan under the theme: “The confirmation of the United States, the return of Japan, the promise of Brazil."
As Mario Boselli, president of the National Chamber for Italian Fashion, noted at the event’s outset: "If Bric countries (Brazil, Russia, India and China) are essential for the development of brands, it is in the traditional markets of the North where Italy continues to achieve 90% of its exports.”
In fact, the United States remains a key market for Western companies. “Luxury stores in the U.S. show much better results than in Europe. The United States accounts for almost a third of global luxury sales and is expected to grow another 13% by 2020,” said Lisa Clyde from Bank of America Merrill Lynch.
“The United States is the largest market in luxury for all in absolute terms and especially for us. We have major projects there. We are going to double the square footage of our Chicago store and open stores in San Francisco and Toronto, Canada,” said, Michele Norsa, CEO of Salvatore Ferragamo.
The United States is also an important market for Renzo Rosso’s OTB group (Diesel). It is the company's second largest market in the world with a turnover of 280 million euros (Diesel + other brands), whereas Japan has historically been Diesel’s top market with a total turnover of 300 million euros. “I go there four times a year. The US and London are very exciting in terms of fashion,” said the founder of Diesel.
Franco Pene, the head of the Italian manufacturer Gibo, is more cautious about the recovery of Japan. Gibo belongs to the Japanese group Onward whose brands include Jil Sander. “The country is in a phase of decline. There are structural elements, such as the high rate of aging among the population and energy dependence, which are both reasons to be pessimistic. As for Brazil, it is still a small market and highly protectionist, hardly an incentive for our exports. On the other hand, the number of Brazilian tourists is rapidly growing and their penchant for buying luxury is considerable.”
“Brazil is wonderful, but it is not an easy market, and moreover one with very high trade tariffs,” added Renzo Rosso. “However, the average sale in our stores there is double compared to the rest of the world.” For the CEO of Salvatore Ferragamo, “Brazil is promising, but in the distant future.” He points to the poor infrastructure and lack of security. “However, shopping centers there are at an excellent level, while there is a dynamic for incredible projects. What is important in these emerging markets is to nurture the image of Italy. In this process, e-commerce sites are of strategic importance, not so much for sales but for communicating the brand,” he said.
"The Brazilians are passionate about fashion. But they have their own ‘style life.’ Foreign brands that open up here with us (in Brazil) have to ‘tropicalize.’ Many make the mistake of relying on foreign buyers in Brazil or sellers who do not know their products. To succeed in this country, brands instead must be able to communicate their history and their expertise. If Brazilian customers are not approached with this attitude and with passion, they will not set foot in your stores,” warns Monica Mendes, president of the Brazilian communications agency of the same name, which is specialized in the luxury segment.
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