To keep it local, Italian luxury groups put aside rivalries

Despite guarding their independence jealously for decades, Italy’s luxury fashion brands have begun teaming up to protect supply chains and the Italian roots of smaller firms.

Displaying a new spirit of collaboration, the luxury brands have shown how important control of the supply chains has become for them. Control of supply chains ensures that brands products get to stores on time and helps them avoid reputational risks linked to labor conditions or the sourcing of raw materials.

Italy’s scattered network of family-owned labels and specialist artisan workshops offers particularly rich opportunities for larger firms with the economic might to cement relationships through investment.

In this collaborative spirit, fashion giants Prada and fellow Italian fashion house Ermenegildo Zegna in June 2023 acquired a minority stake in knitwear firm Luigi Fedeli e Figlio, based in Monza, Italy.

The family-owned fashion house, founded in 1934, focuses on cashmere and jumpers. Luigi Fedeli e Figlio distributes its apparel to 13 own-brand boutiques and nearly 400 multi-brand stores worldwide.

In 2021, Zegna and Prada jointly invested in Filati Biagioli Modesta S.p.A., acquiring a majority stake in one of the brand’s suppliers, which specialized in the production of cashmere and other luxury yarns.

Talking to reporters, leading shareholder and chairman of Prada Group Patrizio Bertelli said that they invested in Biagioli to relaunch a company that was in crisis, while for Fedeli it was a case of helping the firm grow.

In the last two decades, added Bertelli, smaller Italian fashion firms have had to juggle the handover from one familial generation to the next with more intricate challenges such as expanding into new markets.