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“Let’s not be afraid to grow. We have no choice but to keep running.“ |
Eraldo Poletto CEO Furla |
From 30 travel retail doors four years ago, fashion brand Furla will have 200 in the coming months. The scale of expansion underlines the story of success at the Italian house, which sits in a sweet spot for fashion today: the affordable luxury category.
Chief Executive Eraldo Poletto tells The Moodie Report: “As a company we are experiencing a ‘magic moment’ as a result of the investment we’ve made in recent years. Our turnover in the first half rose by +30% compared to last year. This comes from every region and channel, which is positive.”
He notes that the “affordable premium luxury segment” today is “highly strategic” and an area of the business that will drive “big numbers”.
Poletto adds: “There is a trading down from luxury and a trading up from many middle classes around the world, especially in Asia. Not only that, but we have a unique position as the only “˜made in Italy’ accessory brand in that segment. The idea is to borrow from luxury what is good about luxury – design, craftsmanship, creativity, quality, store environments, customer service – while surprising the customer with a great price and an honest and fair proposition.”
Importantly, Furla is looking at the world through the eyes of “˜the globe shopper’, across domestic and travel retail markets.
“You need to be in Japan to get closer to the visiting Chinese customers,” says Poletto. “We use the concept of the “˜silk route’. That means being present in London, Paris, Milan, Florence, Rome, Dubai, Singapore, Hong Kong, Singapore and Beijing. Those locations together are 35-40% of our business. If I connect in these cities and at their airports, then I am getting closer to that globe shopper.”
The “˜silk route’ concept explains the role that some of the brand’s new flagship city stores will play. In the coming months it will have opened boutiques at the elegant Mira Mall in Hong Kong, at Marina Bay Sands in Singapore, in Tokyo’s upmarket Ginza district, close to the Spanish Steps in Rome, on Fifth Avenue in New York and also in Shanghai. “These openings will complete the map of flagship stores at key cities around the world,” says Poletto.
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Fast fashion: Furla has continued its global travel retail expansion recently with new shop openings at Beijing Capital International Airport (above) and Warsaw Chopin Airport (below) |  |
New technology and systems will help the brand better understand who the main shoppers are at these locations too.
“It’s about getting closer to the customer. That’s why we are developing a very sophisticated CRM, to recognise the Japanese shopper from Ginza who is travelling through Frankfurt and shopping again in Milan. That is the goal.”
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“Generic is the old model, personalised is the new.“ |
Gerry Munday Global Travel Retail Director Furla |
In doing this, digital is becoming a vital tool.
“Digital is very important for us. I strongly believe in technology because it’s the easiest way to compete with the bigger brands. Even the way we do it is quite cool, through bloggers or via Instagram or other platforms. It’s amazing the influence that bloggers have; it means you are not only fighting the marketing battle with money, you are influencing people with your use of technology and being connected to a social global community.”
And then there’s travel retail, described by Poletto as “absolutely essential” to the brand’s expansion.
“I love travel retail, maybe because I travel like a maniac,” he laughs. “I actually don’t see a barrier between domestic and travel retail; the airports are now moving to become shopping malls and experience hubs. We directly operate at places like Rome Fiumicino, Milan Malpensa and Linate and we will do so in Hong Kong because in each place we have the infrastructure. But in other places the key is to be able to still give a customer experience that is consistent with domestic.
“We need that measure of control over our brand. It is important to offer exclusivity and a proper experience at the airport. We need to have dedicated space to do that, so we’re not only showing a bag on a shelf. It’s about displaying the brand in the fullest sense. That’s not about our ego, it’s about a clear message and statement to the customer.”
Global Travel Retail Director Gerry Munday, who has been instrumental in driving the brand’s growth in the channel, says that consistency is critical, but isn’t always easy to achieve.
“Generic is the old model, personalised is the new. That is key: between now and next July I will be closing 30 locations because the adjacencies don’t fit with the brand strategy, and part of that is the message that we cannot go personalised. That in turn is about following the vision of the company. It’s about entering the next level and Furla is doing that. You have to be consistent to the client. You cannot be one thing in duty free and another in domestic.”
As the portfolio fills out to hit the major target cities, what regions are left to exploit in travel retail?
Munday says: “Where we need to grow is in the Americas as we are strong in the other regions. We are starting slowly and we need a bigger presence in the USA in particular. We’re talking to some potential new partners about personalised stores there.”
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From domestic to travel retail, Furla aims to present a consistent offer and service to consumers; pictured is the new Auckland downtown store with DFS (above), Helsinki Airport (below) and Zurich (bottom) |
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And while the company says that “fashion & accessories is now established as a core category for the first time,” do the economics still stack up for luxury in the channel today? It’s a subject on which Munday has long been outspoken.
She says: “There should be a true Trinity. We all have to make money but it’s the airport that wins every time. With the conditions around MAGs and rentals, the retailer gets squeezed and then the brand gets squeezed. There should be a new model.
“Now people have choices they never had before about who they fly with and where they fly to. People are now more discerning and that is where commercial comes in; passenger numbers are up worldwide but duty free sales are down. So that is an opportunity. Half of the people don’t buy so how do we convert them? It’s about working together, and in fashion terms insisting on the right adjacencies between brands, in ensuring the right mix is there for the right customer and being present at the right airport. It’s about location, location, location.
“Airports want to be like Regent Street [in London] but there is still a big gap in how brands are serviced and it doesn’t happen often enough in the environment. Brands are becoming more particular and rightly so.”
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Madrid Barajas T1: Furla’s second opening in Spain this year |
Poletto adds that third party retailers and distribution partners need to better recognise the role that each category plays, and treat fashion in particular differently to other merchandise.
“This is about the customer and having respect for the brand. We are a retail company and we approach wholesale with a retail mindset. That needs to be taken into account by the retail partner. Moving from operating cigarettes or liquor that are pick-up items to goods that not pick-up items is very different. Retailers need to treat categories in a very different way. If I buy a bottle of water I have a different motivation to when I’m buying a luxury bag. It’s about the service and the experience.”
In delivering that experience, there is no more important element than ensuring staff are superbly trained and attuned to customer needs. Furla is addressing that requirement with heavy investment, says the company.
Poletto says: “This is why are putting our own people into airports, investing in our own people to give people the full experience. We have no choice. If you cannot offer the full experience you are better to walk away.”
With store and staff investment being ramped up, and new locations coming into play worldwide, Furla aims to prolong its “˜magic moment’.
Poletto says: “We launched men’s shoes this year so that is a huge investment and opportunity, notably in Asia. It could be a good addition to duty free too.
“Our major opportunity now is to not be afraid to grow. We have no choice but to keep running. One challenge is to find the right people to help us grow as skilled, trained, motivated people make all the difference.”
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Making a statement: Furla’s Spring/Summer 2016 line features bright colours and multi-purpose bags |
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