And now LVMH brands are going to simplify production to not stock

And now LVMH brands are going to simplify production to not stock

Luxury Phase 2 is at a slow pace. LVMH brands are simplifying production, and it could not be  any different. After a lockdown quarter, when shops were closed condemning a collection to remain practically unsold, the French conglomerate cannot afford to further accumulate goods in their warehouses. Toni Belloni, general manager of the group, explains this to L’Economia, supplement of Il Corriere della Sera.

LVMH brands simplify production

“We have decided to simplify the rhythm of the seasons in order to manage production effectively – are Belloni’s words – and to avoid the accumulation of inventories along the entire supply chain. Of course, all this without giving up on having fresh and desirable products for customers”. For LVMH, which boasts brands such as Louis Vuitton, Fendi and Dior in its wallet, the Coronavirus emergency has marked a season of difficulty: “Closings of the stores in various markets, for almost a quarter, have reduced the exposure of products launched at the beginning of the year”. The same goes for the supply chain: “While being careful to safety, it is necessary to reactivate the supply chain, to be ready for the progressive reopening of the markets”.

The supply chain, Italy

“In addition to the eight maisons, of which we are very proud, and legendary hotels – Belloni boasts -, we have almost 11,000 employees in Italy. A workforce that has doubled in the past five to six years, accompanied by hundreds of millions in investments”. For LVMH, roots in Italy are fundamental: “The luxury chains are a real competitive advantage for Italy. It is no coincidence that we have 30 production sites, from accessories to leather goods, from footwear to jewellery. Each is rooted within those unique ecosystems that are the Italian districts”. Precisely for this reason Belloni knows how important it is that brands share with their suppliers: “We have a privileged angle of observation, and we understand very well the problems of both suppliers and retailers – he concludes -. Attention is particularly important in Italy, where many players in our supply chains are small and medium-sized companies, often family-run”.

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