Fashion

Fashion

Increasingly integrated supply chains, attention to “made-in” for high-end products and delocalization strategies for low-pricing products have driven the fashion industry towards complex company structures and innovative distribution models.

The overwhelming rise of fast fashion players in the last years, together with the acceleration in the change of consumer preferences, lured major fashion designers closer to just in time delivery approaches. As an effect, traditional fashion seasons are progressively disappearing, vis-à-vis the emergence of special packages and capsule collections.

The progressive choice of the wholesale channel, aimed at improving the control on the distribution chain, together with the improvement of profit margins and cash flows drove the fashion Industry to invest heavily in the development of the retail network. Stores have been opened in cities representing a world fashion showcases (Milan, Paris, London, New York), as well as in key emerging markets (China, Brazil, Russia). At the same time, company partnerships and franchise channels have been strengthened.

These business dynamics created a series of challenges to be met by fashion houses – be they on the stock market or not – related to:

 

  • Organisational models, business plans and marketing strategies; 
  • Fiscal aspects (assessment of transfer prices, benchmark analysis and management of fiscal rulings); 
  • Management of intangible assets (brands and licences, IP companies, impairment tests and damage valuation);
  • Continuous monitoring of the consumer (market research and customer experience) 

 

Valdani Vicari & Associati (VVA) has developed through the years specific expertise in the fashion industry, and currently manages several projects in the Business Consulting, Transfer Pricing and Market Research practice areas.

In particular, the Transfer Pricing area of VVA, in partnership with the legal advisors of Bonelli Erede Pappalardo, works since several years with the key players of the fashion industry to manage the following issues:

 

  • Economic support in the definition of fiscal ruling agreements, both unilateral and multilateral, with financial administrations, focused on operations on brand licences, product transfers and provisions of services; 
  • Benchmark analysis to determine intra-group transfer pricing, to be used in the preparation of the financial statement; 
  • Economic analyses and quantification of the risk originated from intra-group operations, extraordinary operations and international corporate reorganizations; 
  • Support to the preparation of the transfer pricing documentation (as disposed by “Provvedimento del Direttore dell’Agenzia delle Entrate protocollo n. 2010/137654”); 
  • Support in the management of fiscal litigations with national and international financial administrations; 

 

The Business Consulting practice of VVA offers tailor-made support to the fashion industry on the following aspects:

 

  • Definition of the strategic plan, which enables the company to take decisions based on the foreseen industry trends, by selecting opportunities, identifying priorities and planning focused investments; 
  • Design and management of customer experience: existing and prospect customers get in touch with the company and its brand through different touchpoints. It is thus vital to ensure coordination and synergy of these elements, in order not to waste efforts and to present a unique brand identity; 
  • Development of the business plan of new initiatives, enabling the management to verify the economic feasibility and the financial sustainability. Moreover, the business plan represents a tool to present and communicate the project to potential investors and business partners, which can be backed up by additional business consulting support. 

 

The Market Research practice has elaborated customised solutions for key players of the fashion industry, in order to:

 

  • Perform “systemic” evaluations of brand equity and of its touchpoints, through ad-hoc qualitative and quantitative market research; 
  • Verify the current positioning and the components of the brand identity, both in absolute terms and in comparison with competitors. Brand is evaluated with respect to its distinguishing characteristics, value and by analysing perceptions, consumer insights by distributors and customers, with the objective of identifying suggested strategic paths.
  • Improve shopping and customer experience and gain a thorough understanding of the room for improvement of the offer system. Key assessed dimensions include layout, assortment, atmosphere/mood of stores and quality of service. These are assessed through qualitative and quantitative ethnographic tools, aimed at capturing a snapshot of the interaction between customers and stores through the touchpoints, with the final objective of identifying existing barriers to purchase and the main sources of customer stress.

 

Contacts