Sustainability is a multi-faceted landscape of responsibilities. In such context, a lot of groups from the fashion system must deal with a requirement which is playing an increasingly leading role: to implement effective formulas to support the supply chain. Here are three cases
Environment and more. Although “green is the colour”, the landscape of this processing attitude is extremely broad and multi-faceted. In such scenario, fashion houses, brands and groups are supposed to take responsibility, to an increasing extent, before those players who provide them, as a matter of fact, with quality, which applies to the products they are going to sell. In other words: suppliers and the supply chain along which they network together.
Most of them are small and medium-sized businesses, which are often exposed to various risks owing to financial instability and a general state of economic uncertainty. These companies “must be secured and safeguarded”: that is why even supporting the supply chain has turned into a sustainable input. It applies to these three cases we are going to tell you about in the following paragraphs.
The name of the project is Supply Chain Development. Gucci implemented such plan in 2015 to actively support its own supply chain. Here are some figures: over 5 years, the project has engaged 20,000 suppliers to put into action “over 6 billion euros in terms of jobs”. Just in 2020, over 150 suppliers of the fashion brand could benefit from financing support allocated by Intesa Sanpaolo: loans amounted to over 230 million euros.
Right now (the news dates to July 6th, 2021) Supply Chain Development is raising the stakes as Gucci alongside Intesa Sanpaolo have decided to extend it to social and environmental sustainability targets. In other words, the fashion house’s business partners will be able to get access to specific credit lines through the S-loan formula, based on some ESG parameters (Environmental, Social and Corporate Governance).
As pointed out by Marco Bizzarri, CEO of the fashion brand, this is “the first supply chain agreement, in the fashion industry. It will enable our ecosystem to move forward towards a business sustainable revolution”.
Such are the goals listed in the agreement: among others, energy efficiency and savings, green logistics and mobility projects, energy production from renewable sources.
They are also going to set upcycling projects and some additional plans to support women’s employment and foster gender equality policies and welfare.
The aim is to provide money for these activities. Companies in the Gucci supply chain will be able to call Intesa Sanpaolo for access to specific credit lines.
Diesel makes 30% of its collections in Italy, whereas for the other brands of OTB portfolio (Maison Margiela, Marni, Viktor & Rolf, Amiri), made in Italy production share exceeds 90%. It is no coincidence, then, that the group, led by Renzo Rosso, launched the C.A.S.H. project, in 2013, through Staff International and in partnership with BNP Paribas.
In other words, Credito Agevolato – Suppliers’ Help, which is a system to ensure Italy’s small and medium-sized businesses access to credit. 2020, due to the pandemic outbreak and its heavily detrimental effects, OTB worked a lot towards such direction, even exposing themselves to the danger of using up their own capital funds, to prevent their suppliers, upstream, and selling stores, downstream, from going short. Pratically, they acted “both as a bank and a warehouse” to support their own system, as pointed out by Chief Executive Officer Ubaldo Minelli.
“We knew such strategy would have some repercussions on the group’s financial standing. Yet, we rest a great deal on stability, and we do not have any debts. (…) We are taking care of our manufacturing supply chain, which we consider one of the most important assets in our business model. If the supply chain is not doing well, it is also our problem”.
A 7-million-euro ceiling. Such is the amount provided by Aeffe for the supply chain Italian companies they work with (90% of around 800 in total), by reason of an agreement deal signed with UniCredit.
The group, headquartered in Romagna (which is in control over Alberta Ferretti, Moschino, Philosphy and Pollini), are going to give their suppliers the opportunity to finance current capital assets by getting access to financial liquidity in a simple and immediate way. Aeffe opted for a supply chain finance solution, which takes advantage of the U-Factor Confirming service.
In other words, the business “in charge of the supply chain” makes use of a digital platform to pay its own suppliers, therefore uploading the invoices it is going to pay off when they are due, as per schedule. As for suppliers, they can get access to the platform and view, in real time, the invoices the customer company has recognized and, consequently, is going to settle. The result is the development of a virtuous circle of current assets, which has positive effects and repercussions on the whole supply chain.