The Hip Factories
By Lauren Goldstein
If there is a mantra of modern fashion, it isn't "create" or "invent" or "advance." It's "control." Control the look of your stores, your offices, your packaging, your parties. Control every aspect of the brand that a consumer can see. But there's another realm luxury-goods companies seek to master: production. Control the manufacturing and you control how fast your products get to the stores (the earlier they arrive the more time they have to sell). Control production and you control quality. The benefits seem obvious, the alternative impossible. ("What do you mean, Calvin Klein doesn't make his own underwear?") But the desire to own and operate factories — for clothing, for leather goods, for shoes — is a relatively new one. Hermès, Louis Vuitton, Gucci were founded by families who made the things — luggage, bags, saddles — they sold. The first designer clothing was haute couture, made to individual customer specifications by seamstresses employed by the creator. Those designs were sold to and copied by mass merchants, who reproduced them in local factories and sold them under the names of their own stores. As ready-to-wear designer labels began to emerge in the 1970s, the easy choice for a designer was to sign a licensing agreement with a manufacturer. Who wants the bother of running a factory and employing all those workers when it's so much simpler to sit in an atelier and sketch?
The designer would design, the manufacturer would manufacture. It was a great system in theory, but cracks soon began to show. Some designers signed licensing agreements and focused their attention elsewhere, allowing licensees to design products as they saw fit, diluting the brand image. Some manufacturers signed agreements and then produced cheap products that they sold to second-rate stores, diluting the brand exclusivity. Witness Calvin Klein's 2000 lawsuit against Warnaco, the company that makes the jeans and underwear that bear his name. Companies began to sign licensing deals for everything from chocolates and whiskeys to pencils and playing cards, negating the very nature of a luxury fashion brand. Pierre Cardin is the reigning master, with nearly 1,000 licenses to his name. There was an upside, of course. And the upside was money. The licenses generated huge amounts of cash that would be hard to replace.
It wasn't long before things began to go horribly wrong. Brand names began to suffer. Designers lost prestige. Consumers lost interest. So, in 1987 when Gucci embarked on its legendary turnaround, priority No.1 was buying back the licenses. "At some point the unity had disappeared," said Domenico De Sole, Gucci's CEO. "Someone was designing shoes, someone else was designing lighters." Priority No.2 was making sure the products Gucci did sell were of the best quality. When De Sole became ceo, his initial task was to pay personal visits to his top suppliers — some 300 of them — to reassure them about the company's future. Between 1994 and 1998, Gucci's production of leather goods increased 277%. Since further growth wouldn't be possible using the existing suppliers, Gucci began looking for new ones. But it wasn't alone. Prada was also on the prowl for new factories. So was Giorgio Armani. And more. For luxury goods, Asia isn't an option. The brands needed the quality that only Italian factories can provide. Before long the solution became clear — the brands must buy or build factories themselves. What followed was a spate of acquisitions of little-known Italian companies like Calzaturificio Regain, Zamasport and Genny in order to convert them to big-brand manufacturing. The established designers also drew up plans for new plants. All this made new designers uneasy.
Where could they have their products made if all the factories were turning into single-brand producers? For a lucky few, the answer came in the form of Franco Pene, the ceo of Gibo. The firm acts as the manufacturing and distribution wings for emerging fashion companies, not only making the clothes but selling, shipping and invoicing them. "We take care of the new designers that none of our competitors were interested in," says Pene. So far so good — contracts with Gibo helped launch the careers of Helmut Lang, Alexander McQueen and Hussein Chalayan. The security a factory provides is an advantage that's hard to underestimate, as Domenico Dolce and Stefano Gabbana can attest. When they started, Dolce's father had a manufacturing plant that turned out their early collections. Now they own that plant and several others, and they are looking at producing for other designers too. "Now the factories don't give new people time to grow," says Dolce. "I'm not a genius. I wasn't born a genius. You need time." And a factory.
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