by MILAN – The wave of consolidation in the Italian supply chain shows no signs of slowing.
At a time of uncertainty and volatility marked by the rapid decline in luxury consumption seen from the last quarter of 2023, smaller suppliers at the downstream end of the fashion manufacturing pipeline are at risk of losing ground.
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Most of the 62,000 Italian fashion firms, according to Confindustria Moda, are small and medium-sized companies, which are the backbone of Made in Italy production, which entrepreneurs are willing to protect more through M&A activity, partnerships and deals to achieve common goals out.
The trend, which emerged in the immediate post-pandemic years, changed the country’s pipeline landscape. It is now less dependent on tiny family-owned businesses with limited management and financial resources to deal with luxury juggernauts, their primary clients, as well as to meet the challenges ahead, including mandates policy makers in improving fashion sustainability practices and. textile sectors.
“Supply chain control exercised by large groups — when handled transparently — is a strong advantage because it tends to eliminate sometimes entrenched bad practices. [in the industry],” said Luca Sburlati, chief executive officer of Pattern, an Italian manufacturing outpost. “Clients and major brands should consider fair remuneration from the manufacturing pipeline and [better] profit allocation to avoid the ‘price war’ in the supply chain which harms quality.”
Last month in its latest M&A activity, publicly listed Pattern, which operates in the prototyping and production of fashion collections for a range of luxury brands, bought knitwear specialist Umbria Verde Mattioli for 20 million euros, expanding its division in the that amount. product category, which already includes the companies SMT, Zanni and Nuova Nicolo.
A pattern connects with other players active in the same space. In more ways than one, the Italian fashion system has proven to be inventive, with conglomerates that group supplier companies under one umbrella being established over the past 10 years.
In addition to Pattern, other examples include Gruppo Florence, a 670-million-euro group that currently has 26 manufacturers, and Holding Industriale, founded by Claudio Rovere in 2008 with a 12-enterprise portfolio and sales of 350 million euros in 2023.
MinervaHub, founded by Matteo Marzotto in 2021, includes more than 10 companies operating in the luxury fashion manufacturing space for the design, sportswear, cosmetics, jewelry and automotive sectors. In April last year, investment holding San Quirico SpA acquired a 75 percent stake in MinervaHub, with Marzotto still a minority stakeholder and retaining his role as president.
Smaller-scale players are also rushing to protect their suppliers so they don’t lose know-how and skills. For example, Nice Footwear – a Padua, Italy-based company specializing in the design, development, production and distribution of leisure and sports footwear – has been such an aggregator since 2021. 80 percent of Favaro Manifattura Calzaturiera and He has received Emmegi. Srl, both footwear producers, and currently generate sales of 46.9 million euros.
“Our ambition is to continue our M&A goals to create a luxury pole, Made in Italy. Our goal is to be the aggregator of small workshops of excellence,” said CEO Bruno Conterno, pointing out that the founders have always been involved in the management, operations and ownership of the company. “We like to describe [the deals] as partnerships, because we believe in the strength of networking with other enterprises.”
In the vicinity of Treviso, Italy, Eurmoda Group, which produces and supplies accessories for high-end fashion brands, acquired last year 100 percent of Macuz Srl, a popular Florentine company active in the production of high-quality metal accessories. In October 2019, the private equity firm Mindful Capital Partners took control of Eurmoda, creating the holding company Margot SpA, with the aim of building a platform of excellence in the sector throughout Italy.
Over in Como, silk specialists Ratti and Mantero teamed up in May to acquire a 20 percent stake in dyeing and finishing company Color Como for an undisclosed sum. Commenting on the deal, Franco Mantero, president of the unnamed company, said he was “happy to be able to sign the agreement with Ratti, because some topics are important to everyone regardless of the competition.”
Polled by WWD, a number of entrepreneurs behind the deals revealed how progress in ESG, a driving factor in today’s competitive landscape, is being strongly encouraged within manufacturing poles.
“As majority stakeholders our goal is to value the skills of artisans, providing a range of services that small companies could not offer on their own,” said Conterno, citing technological advances, sustainability and digitization, among other issues that the group tackles on behalf of the group. his businesses. Ultimately, he said, partnerships are aimed at improving competitiveness.
Through its business configuration, Pattern — like many other conglomerates — created vertically integrated local pipelines made up of companies based within a few miles of each other. This is in line with an ongoing trend of close or reworked production capacity across players in the premium and luxury fashion spaces.
To that end, clothing interlinings manufacturer Chargeurs PCC – part of France-based Chargeurs, a holding company publicly listed on the Paris Stock Exchange – has signed a binding offer for two strategic business units of the Swiss company Cilander. These are his shirt-oriented textile business, including the brands Alumo, Eugster & Huber, Swiss Ghutra and Brennet, and a factory located in Lützelflüh, Switzerland, specializing in high-end textile finishing processes.
“We are becoming more structured with an organization focused on local occupation and emergency [manufacturing]…. This allows us to have maximum control over the supply chain, providing customized services to our clients without relying on a single chain. [geographic] manufacturing hub, which we saw could lead to production stoppages due to geopolitical difficulties,” said Gianluca Tanzi, CEO and president of Chargeur PCC.
The consensus is that opening up to industrial or private equity investments is increasingly encouraging for success.
According to Lincoln Germanetti, chairman of Filatura di Tollegno 1900, which in 2022 sold its wool spinning businesses in Italy and Poland to Indorama Ventures Public Company Ltd., a global sustainable chemical company, “the choice we made has been solid and supported by giving us, allowing us to continue our journey of innovation with confidence. In addition, the partnership opened up new growth perspectives and allowed us to revise our development strategies based on new shared paradigms.”
So believes Fabio Campana, CEO of Lanificio dell’Olivo, which is part of the Filidarte Group of the holding company Ethica Global Investments, founded in 2020 to promote the excellence and know-how of the Italian spinning industry. The venture includes Manifattura Sesia, whose classic luxury offering is complementary to that of Lanificio dell’Olivo.
Fashion brands are also taking bigger stakes in their suppliers – for example, Brunello Cucinelli and Chanel have teamed up on a deal to acquire a minority stake in yarn maker Cariaggi, while Ermenegildo Zegna Group and Prada Group have teamed up twice to share get a majority. in Filati Biagioli Modesto SpA in 2021, and in 2023 to buy a 15 percent stake each in knitwear and fine yarns, Luigi Fedeli e Figlio Srl, which celebrated its 90th anniversary at Pitti Uomo this month.
Earlier this year, Missoni took over Tricotex Srl, a leading high-end textile manufacturer specializing in Raschel knit fabrics – Missoni’s signature – located in Gallarate, on the outskirts of Milan.
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