Luxury super-produces relentlessly, designs and opens factories mainly between Italy and France that, says Louis Vuitton CEO (Pietro Beccari), ‘will dominate the high-end for centuries’. Let’s take stock of this unbridled race involving not only the brands but also their subcontractors specialising in footwear and leather goods
For a certain period of time, it was thought that the shoemaker or leather worker should only work with artificial light. Constant illumination would allow the human eye to detect colours better and recognise any nuances between one leather and another. This was much more difficult to do with changing natural light. After decades, theory and practice have changed. One only has to visit companies such as Tod’s (in Casette d’Ete, in the Marche region) or Brunello Cucinelli (in Solomeo, in Umbria) to understand this at once.
Or just enter Fendi Factory, the factory that is the symbol of Italian luxury production, built with massive windows to allow workers to enjoy the view of the surrounding countryside. “We are proud of this. It is a better and more pleasant working environment,‘ says Fendi CEO Serge Brunschwig. An extended introduction to get to the heart of an argument that shows how luxury is a machine without brakes, which continues to increase its production capacity. Hence: to open new factories and workshops in Italy and France. Places, that is, where craftsmanship is a guarantee to the point that, as Pietro Beccari (CEO of Louis Vuitton) says, ‘many generations will still pass before there are any dimensions of luxury that are not Italian or French’.
Luxury is a machine without brakes
Built-in Capannuccia, in the hills of Bagno a Ripoli, in the province of Florence, Fendi Factory cost 50 million euro, the highest investment ever made in Italy by LVMH (its flagship group) for a factory. It currently employs 400 people, a hundred of whom are in production. They will become 700 within three years. They will produce 45% (compared to the current 10%) of the brand’s leather goods. This clearly demonstrates the luxury brand’s commitment to strengthening production capacity to meet growing demand. And Fendi Factory is the tip of the iceberg in investing to secure its production chain: it often does so by building new factories.
The Hermès factories
Even Hermès, which makes scarcity of products on the market its primary strategy, is accelerating the pace at which it opens new workshops. After opening a leather goods factory in Normandy in April, the following month, it officially opened a new factory in the Ardennes, where it created a central production hub. The Sormonne factory is the 22nd Hermès factory in France. It will employ 260 people. Since 2010, Hermès has opened 11 leather goods workshops in France, bringing the number of leather artisans employed to over 4,700. Four other projects are currently under development in Riom (Puy-de-Dôme), L’Isle d’Espagnac (Charente), Loupes (Gironde) and Charleville-Mézières (Ardennes).
More recently, Bottega Veneta opened a new factory in Vigonza (Padua), where it internalised the shoe production chain. In the coming months, Louis Vuitton will open a shoe factory in Civitanova Marche (Macerata), which, when fully operational, will house 500 workers. The same brand has earmarked around 40 million euros for the construction of a new leather goods factory in Pontassieve (Florence), in Le Sieci, which will house 450 workers.
But it does not end here because there are many other luxury brands that have various investments underway. The objective is always the same: to increase production. To meet the increased demand for products, but also to have more control over the supply chain, the quality of the finished product, the regularity of time to market and other advantages that direct production brings. According to experts, it would be difficult for a brand to exceed the 50% threshold of the in-house output: perhaps the wind is changing.
Subcontractors also increase
The strategy of increasing in-house production capacity also involves Italian subcontractors working for the brands. This is the case of Dimar Group, which in June 2022 inaugurated a new 11,000 square metre plant in Campli (Teramo) and is planning another 14,000 square metre plant in Valentano (Viterbo). The aim is to double the number of employees and reach 1,000. The same goes for Desa, a Turkish subcontractor that has decided to open a production site in Poppi (Arezzo), opening in March 2023.
Again: Gab, a leather goods manufacturer controlled by the Hind group through Holding Moda, which in January 2023 opened its new site of almost 20,000 square metres in Capalle (Campi Bisenzio) at the end of a €5 million redevelopment. In these cases, the investments are also aimed at concentrating the supply chain in order to have maximum traceability of production, more homogeneous product quality, and the reduction of dispersion in small external workshops that generate costs for control and transfer of goods.
The ultimate contradiction
How long will this race increase production last? Legitimate question, as there are whispers going around that the warehouses of some designer labels are struggling to unload unsold stock. And after all, doesn’t all this overproduction sound contradictory if François-Henri Pinault, number one of Kering, then comes along and announces that production must decrease in order to meet climate targets?