ITALY - UK PARTNERS

BUSINESS WORLD | 07 www.italchamind.eu the causes was the weakening of US dollar and GBP against EUR. Other Italian brands, now belonging to foreign companies, had outstanding performances confirming the strength of the luxury sector. Within LVMH, for instance, there are Bulgari, Fendi, Loro Piana, Emilio Pucci, Berluti and Acqua di Parma; while Kering includes Gucci, Bottega Veneta, Brioni and Pomellato. Among the companies that lost a single digit percentage in sales, Dolce & Gabbana and Tod’s. Overall, the composite net profit margin for the entirety of Italian company was 7.2%, below the Top 100 average but up by 0.01% compared to 2016. UK The United Kingdom also imposed itself in the Top 100 with 10 companies, and a good growth performance (7.4%). British companies were the ones with the highest composite net profit margin of all, at 14.2%. Three companies contributed to the successful figure and to 86.3% of the British luxury goods sales: Chanel Limited, Michael Kors (now Capri Holdings) and Burberry. Chanel Limited saw a strong consumer demand, which led to revenues for $9.6bn, with a growth of 11.5%, particularly in the Asia Pacific region (16.5%). Michael Kors, instead, grew by 5% and made 12.5% net profit margin (which is also due to the acquisition of Jimmy Choo in November 2017). Burberry, instead, was the only British company to lose sales by 1.2%, because of the reductions in wholesale revenues. Double digit sales growths were registered for Graff Diamonds (21.6%), Charles Tyrwhitt (12.2%) and Ted Baker (11.4%). FASTEST 20 Deloitte’s “Fastest 20” chart instead shows those companies that registered extraordinary growth levels. Furla (#3 Fastest 20, #61 Top 100) and Moncler (#10 Fastest 20; #44 Top 100) are the two companies representing Italy in the global industry (down from six in 2018). The first one had a 21.5% growth thanks to the consolidated presence in Asia. Moncler instead was the top performer thanks to the expansion of the mono-brand stores and a growth of 16.4%. The United Kingdom was also represented by two company, J Barbour & Sons Ltd (#15 Fastest 20, #88 Top 100) and Ted Baker (#16 Fastest 20, #54 Top 100). The latest registered impressive online sales figure: 35% of the whole sales. FUTURE TRENDS Brands are now focusing on the next consumer class, the so-called High Earners Not Rich Yet (HENRY). HENRY are usually 43 years-old, with $136,000 income average and they mainly shop online, using credit or debit cards with rewards. Studying their habits, luxury companies discovered that they are looking for an individualised relationship with the brand. In order to stimulate their and Millennials’ interest, brands started using more social media to engage and influence them, building a long-standing relationship to keep them loyal in the long term. Consumers are also more interested in ethics and moral values, in purchasing from brands that have a positive impact on the world. For this reason, Burberry started investing in recycling programmes, the Kering Group began using raw materials and investing in tackling violence against women, and Prada became more involved in sustainability and ecology. Finally, brands are creating engaging content for the younger clients, collaborating with streetwear firms remaining modern and contemporary. Gucci, for instance, introduced a service to personalise their handbags, while Burberry allowed customers to choose their accessories’ style, colour and fabric. Artificial intelligence will also be more involved in the clients’ experience, both in the chatbot (like the one introduced by Ted Baker) and in the e-commerce development. · The full report is available at www.deloitte.com.