Etro aims for €500 million within five years Etro aims for €500 million within five years
It's an intense year ahead for Etro in 2023. While the founding family sold 60% of its capital last year to L Catterton, a private equity fund co-founded by luxury giant LVMH, the Italian luxury house is embarking on an ambitious development plan, which should see it reach half a billion euros within five years, compared to pre-pandemic sales of around 285 million euros.
"It's a challenge but achievable, thanks to the support of the new shareholders, the strength of the brand and the strategic plan put into action," said CEO Fabrizio Cardinali, who detailed his plan at the Milano Fashion Global Summit 2022.
"Etro is a very strong brand, with a very clear personality, easily recognizable," he continued, recalling its vast potential in certain markets, so far little explored, such as China. During the conference organized by the publishing group Class Editori, which was held virtually on Tuesday, October 25, the new head of Etro, who took over at the beginning of 2022, said he wanted to focus his recovery plan on rejuvenating the label and digital communication, explaining why he had chosen Marco De Vincenzo as creative director.
"His ability to work with colors and dialogue with a younger clientele, has allowed us to significantly accelerate the process, especially through his first multicultural communication project Etropia, based on the image and dialogue between body and colors, without products," says the manager. "Marco is also a great expert in accessories (e.n, he was Fendi's leather goods head designer for twenty years, with whom he continues to collaborate as a consultant), a category that we want to strengthen, and he is a lover of fabrics, which is important since Etro was born in 1968 as a textile company."
Etro made its name with its fabrics, whose designs reinterpret the Paisley pattern, the traditional Indian design of the cashmere leaf. The company first supplied big labels, then launched a home line and finally ready-to-wear in the 1990s. Alongside his first collection, which was shown in Milan in September, and whose sales "went very well" with retailers, Marco De Vincenzo, who was appointed last May, selected eleven fabrics from the house's archives to create a small "see now buy now" collection with the German e-tailer Mytheresa, which sold out immediately.
"We want to continue with projects of this size, pragmatic, concrete, measurable. For a company of our size, this is the right approach," says Fabrizio Cardinali, for whom "Etro is not just Paisley, it is much more. The house is at its best, when it skillfully combines color and prints".
In this logic, another project, described by the general manager as "tactical, more than strategic", was a great success. The label participated in March, in the Metaverse Fashion Week on Decentraland with a capsule collection called "Liquid Paisley", which materialized three weeks later with physical products in stores, attracting "young people who had never heard of the brand", while generating great interest on the Web, where "they were many to download the skins of the collection."
Etro's new digital approach does not only involves these types of projects, but is based on four fundamental points: the increase of online sales networks, the launch of a new merchant site in February 2023, a fully omnichannel distribution within eighteen months and a native-digital communication.
In 2022 the foundations were laid, "redefining the strategic plan to continue to grow and draw the new Etro". Management expanded with the arrival of the new CFO Iacopo Martini, and through the creation of the new director of sales and sustainable development position entrusted to Alberto Candellero and work was done mainly on the product, communication channels and ingredients to be conveyed on these channels.
We have also focused on the supply chain, focusing on product quality, the time it takes to get from the raw material to the end consumer, and cost optimization. "We have signed agreements with very important partners as suppliers," says Fabrizio Cardinali, who feels safe from possible criticality or price hikes for raw materials, since the company started sourcing very early in the year.
In 2023, the recovery plan should be in full swing. It will first "push on the renewal of the product in terms of style and manufacturing". The network of physical stores will also be updated with a new concept designed by Marco De Vincenzo. Finally, Etro will continue "to fuel communication by targeting an ever younger population", devoting up to 60% of its investments to this area.
From a geographical point of view, the brand also has an ambitious plan. Although "Etro is known from east to west", as the CEO notes, the brand still has great potential internationally. While it is present in Japan, Europe, North America and Asia, it only has seven stores in China, for example. This country is therefore one of its main objectives, along with "Southeast Asia, where the brand is very popular, the Middle East, where we are going to set up a very important joint venture, and the United States," concludes the manager.
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