It’s apparently fashion week in Milan which gets us a fun article on Italian textile makers (In Italy’s Mills, a New Spin Emerges, Wall Street Journal, Feb 25). There have been some interesting changes in the apparel industry in the last decade or so. Cheap now truly rules. Indeed, some argue that fast fashion retailers have become so adept at mimicking high-end designs that the market for counterfeit designer goods has suffered (see Cheap used to be cheerful, but it is out of fashion, The Times, Feb 15). Focusing on costs has led to moving the assembly of garments and the production of materials to low wage countries.
So what is an old-school fabric producer like Italy’s Lanificio Egidio Ferla SpA to do? Take the high road:
“We are not afraid of making special qualities, special colors,” says Paolo Ferla, grandson of the firm’s founder. … Like other textile makers in the region, Mr. Ferla can’t devalue the strong euro, which makes Europe’s exports expensive, or compete with China’s relatively cheap labor. But he can offer small quantities, special colors, new weaves and patterns, and even new fibers. A decade ago, Mr. Ferla innovated the use of baby alpaca, which is softer than cashmere. He comes out each season with new variations on tweed-like fabrics thrust through with various colors of thread. Italian textile makers have also created techniques such as extra twist in the thread that offers more stretch, new methods of combing bouclé to make it soft, or spinning tiny threads together to make extraordinarily soft wools.
Yet factories in China are proving as adept at copying fabrics as films and handbags, which is pressuring the Italians.
While worried, Mr. Ferla is relying on his quality-focused business strategy. “It’s never more important for us to maintain the quality and the innovation of production,” he says. Then he quotes Dostoevsky: “Beauty will save the world.”
This is an interesting example of how a firm can build (and hopefully maintain) a strategic position based on its operating capabilities. Ferla will never be able to match China on cost, so it has to cede them the mass market. The real question is how long it will take for Chinese manufacturers to take aim at the high end. What seems to be supporting Ferla and its Italian brethren is that designers value the variety and quality they produce. It doesn’t seem that they value their Italian-ness. Designers need novel fabrics to produce novel products. I suspect that they are indifferent about where those inputs come from. Find a Chinese or Thai mill that has a distinct, wonderful fabric, and I would think that designers would be lining up to use it. At the moment, the Italians have a leg up in quality and variety. It may, however, only be a matter of time before upstarts are nipping at their heals.
