What’s Next for Independent Fashion Retailers?

MILAN — Italy’s peculiar role in the fashion industry is not limited to its marquee brands or high-end manufacturing supply chain.

The country has traditionally had one of the strongest representations of independent luxury and fashion retailers that over the years have been instrumental in launching and supporting hot labels and up-and-comers.

Scattered throughout the country’s second-tier cities are retailers that have grasped the fashion taste and sensibility of local consumers, forging strong ties with luxury brands and acting like closet curators with select product and brand mixes.

As consumer confidence feels the pinch of economic instability and geopolitical unrest, the reality check for local retailers has been hard to digest.

The performance of e-commerce operations has been sluggish. Luxury brands’ direct retail strategies have reduced independent stores’ access to marquee names. The discount policies of online retailers have come at the detriment of small — and often brick-and-mortar — entrepreneurship.

How can the multibrand retail formula forge ahead?

The topic was discussed Monday at the “Re-Retail: Technology, Market and Consumers in the Fashion Retail World” summit, the first one organized by Camera Buyer Italia, the country’s association gathering about 100 fashion and luxury retailers in the country boasting 500 doors overall.

The consensus pointed to a return to basics, as in retailers rediscovering their unique selling proposition, hinged on offering a one-of-a-kind curation tailored to their customer base, as well as building a universe around the transaction that can lure big spenders in-store.

“Our recipe at times of uncertainty has always been ‘back to basics,’ homing in on what we do best which is listening to our clients and defining our offering based on their current needs while also trying to forecast their future ones,” said Luis Sans, chief executive officer of the Barcelona-based Santa Eulalia luxury boutique.

Santa Eulalia is one of the first global retailers to join the Camera Fashion Retailer. Promoted by Camera Buyer Italia’s president Maura Basili, the international organization aimed at grouping international players, has already drawn Mitchells from the U.S., Germany’s Emerson Renaldi and Benesch, and Antwerp-based Verso, in addition to the Spanish store and the Camera Buyer Italia associates.

Sans introduced the elephant in the room — the gray market — which has fueled revenues for independent retailers for the past 10 years.

That was before global brands — especially the most in-demand with annual sales of more than 1 billion euros — started to scale back as they increasingly embraced a direct-to-consumer strategy.

“A lot of us were doped in these past years by easy sales via e-commerce and thanks to a certain easiness in sourcing brands,” Sans said.

Roberta Banaglia, CEO of investment firm Style Capital, which in 2021 acquired a 40 percent stake in online and physical retailer LuisaViaRoma, echoed that sentiment.

While acknowledging the importance of direct retail for big-scale brands, she believes those strategies are leaving some customers unserved.

“I believe that in the long-term, the total absence of marquee brands at multiband retailers will impact their accessibility to a certain client who is curious and trendy,” but might avoid monobrand stores altogether, she explained.

“Multibrand stores need to survive. They are such a richness for end consumers as a hotbed for emerging talents,” Benaglia said, adding that this strategy could help offset the negative impact of marquee brands increasingly reducing the margins left to wholesale players.

According to a study conducted by HeyLight, a Compass Bank’s payment service, interviewing about 90 luxury and fashion retailers that are part of Camera Buyer Italia, innovation starts from buying.

About 64 percent of respondents expressed a stronger focus on up-and-coming brands that ensure a more appealing and emotional assortment, while 36 percent of retailers said they have continued to tap more decidedly into established brands to guarantee high sell-throughs.

Independent retailers agreed that, despite the current headwinds, brick-and-mortar retail needs to be preserved for customers adamant about shopping in-store.

“I think every luxury customer, if you ask them today, ‘do they want to shop in a number of monobrand stores, or would they rather go to one store, and have it all curated for them?’ I would say 100 percent of the customers would rather shop in a multibrand environment,” said Bob Mitchell, co-CEO of Connecticut-based luxury retail conglomerate Mitchells, which encompasses eight stores under the Mitchells, Richards, Marios and Wilkes Bashford banners with units in San Francisco, Seattle, Portland, Ore., Palo Alto, Calif., and Greenwich, Conn., among others.

“We’re very committed to being a multibrand retailer, which is in the wholesale business. I’m adamant that we’re not doing any concessions. I believe that concessions are in the real estate business instead of the retail business,” he said.

According to Claudio Antonioli, the mastermind behind the namesake store and e-commerce platform, as well as the founder of Dreamers Factory, currently an incubator for emerging brands, today’s biggest challenge for retailers is the analysis and optimization of market requests, as well as building a universe that’s not only transactional: the modern concept store.

“It was a service before but today, we talk about hospitality,” echoed Mitchell. “We’re committed to creating an environment in the stores that customers want to be in, whether it’s with food, with drinks and by having great professionals [sales associates],” he said.

“We think it’s our moment to shine….I think the customer still wants that multibrand experience in a great store with great sales associates. And it all starts with remembering that the stores are the center of our universe,” he added.

“Our interlocutors, our clients are more demanding than ever. They look for style and culture,” said Beppe Angiolini, CEO of Sugar, the Arezzo-based multibrand store.

Long-term profitability is key to ensure survival, as well as investments to fuel continued innovation in retail.

“It’s really a seismic change, a true challenge as almost all points of reference have changed,” said philosopher and sociologist Gilles Lipovetsky. “Multibrand retail can’t help but renew itself and innovate. It’s not some marketing whim, it’s a vital necessity.”