Kneeling And Licking The Younger Generation Of Luxury Goods Is Accelerating Fashion, And Eastern Europe Has Become A New Manufacturing Base.

June 25, 2018: in order to lick the fast changing tastes of the younger generation, the luxury industry is accelerating fast fashion, and learning from its Zara, the core global supply chain, has become an essential part of the luxury industry.

At the beginning of this month, Reuters visited Bulgaria, and many local manufacturers who made OEM for luxury brands in France and Italy said that orders for luxury goods are increasing.

In fact, in order to reduce costs, the luxury industry has already made some efforts. T-shirt Non core products such as shoes are handed over to China's low labor market for manufacturing. However, in recent years, China's labor costs continue to rise, and the luxury industry is trying to squeeze out their wallets in order to compete for the strong consumption of their wallets, adopting a more snobbish strategy to speed up supply and quickly generate large quantities of explosive products and sell them before the tastes of young consumers change.

Miglena Hristova, the website's Bulgarian manufacturer MIK-BG boss, Givenchy and Kenzo OEM, said the lower the volume of the more luxurious industries, the higher the profits. She said that more and more orders came from the luxury industry, which led her to invest more in machinery and equipment.

Mihai Tincu Tincu, owner of Rapsodia Conf, one of Bulgaria's largest garment manufacturers, said luxury brands provide raw materials for the plant, and orders from factories are growing. According to him, Italy luxury goods giant Prada SpA (1913.HK) Prada group and OTB SpA's Maison Margiela brand are all customers of the company, while some small factories in the northeast of Bulgaria are also OEM for global luxury giants.

The luxury goods industry has long been known as "Made in France" or "Made in Italy". It has already been punctured. In 2011, when Prada group was listed in Hongkong, it was triggered by a false label.

The prospectus of Prada group shows that the products of Prada "Made in Italy" may actually come from many low-cost countries such as China, Vietnam, India, Turkey and Romania. The group co founder, Miuccia Prada, herself has also said that things in low cost countries will happen sooner or later and praise the benefits made in China. Subsequently, the Chinese media "Economic Observer" issued a deep report. The products of the "Made in Italy" product were made in China and visited the Xingang shoe factory in Dongguan, Italy group, the nine generation Hing Holdings (1836.HK) of the Chinese group in Dongguan. In addition, in the report of Goldman Sachs Investment Bank of Goldman Sachs Group, the well-known investment bank regarded Prada's outsourcing process as a quality risk factor.

In 2017, the famous British media "Guardian" also confirmed that Louis Vuitton Vuitton (hereinafter referred to as "LV") Louis Weedon set up a factory in Romania, which was first reported by the French media in 2014. The guardian visited LV Somarest factory in Cisnadie, Romania town. The manager of the Somarest factory finally agreed to meet with the guardian, claiming that the senior management and raw materials of the factory were from France. The products were then exported to France and Italy to assemble, and signed the "Made in France" or "Made in Italy" sign, which was in line with EU law, and then spanported to countries for sale. The guardian said that compared to other factories in Romania, LV's Somarest factory is even the most respected factory in the area, with overtime pay for workers.

Miglena Hristova Hristova, owner of MIK-BG, a Bulgarian manufacturer, also said that convenience and proximity are only two standard requirements for luxury goods suppliers to choose suppliers. Their basic requirements include quality, stability and respect for the company's code of conduct. Therefore, the company is also investing in gym, bathroom and canteen renovation to improve employee welfare.

Management consulting firm McKinsey McKinsey Global clothing, fashion In an interview with Reuters, Achim Berg, a luxury business executive, said luxury brands needed different suppliers to shorten the delivery cycle and provide large capacity.

McKinsey surveyed 200 luxury industry executives, nearly 80% of them said that the trend of procurement principle is becoming more and more urgent. Achim Berg said that the 4-5% growth in the luxury industry this year is better than that in the overall fashion industry 3.4-4.5%, which is mainly benefited from the convenience of manufacturers in Southeast Europe.

Gucci Gucci announced at the beginning of this month that it had bought 10 leather suppliers and would buy another 10 in the future. The aim is to tighten brand control over the supply chain so as to respond quickly to fashion changes.

Marco Bizzarri Bizzarri, chief executive of luxury goods in Italy, said he hoped to shorten the design concept to half the time of the product's shelves. At the same time, it was necessary to ensure that the production capacity and design would not be stolen by other brands, so the supply of independent leather suppliers was decided to be reduced from 75% to 40%.

The Italy luxury brand Moncler SpA (MONC.MI), known for its down coats and ski wear, is hoping to sell more Moncler based products in June, and achieve new targets every month.

Gucci speeds up the supply chain twice.

Luxury products and more orders placed near the southeast Europe have become a reality, but the industry is still secretive and secretive.

Prada group declined to comment on the issue of Rapsodia Conf subcontracting, while Maison Margiela said that 90% of its products were made in Italy and 10% from international suppliers, including Bulgaria factories.

Versace Versace said that only part of the sub line brands, Versus and Versace Collection, were completed through the Eastern European OEM, including Bulgaria and Luo Maria, while Hugo Boss admitted that there were 6 generations of businesses in Bulgaria.

In 2016, it could directly invest 5 million euros to build factories in Romania.

LVMH Mo t Hennessy Louis Vuitton SE (MC.PA) Lu Wei Ming Xuan refused to comment on its brand Givenchy and Kenzo. Bernard Arnault, the chairman of the group, denied that LV Luo Maria was made, but it was finally confirmed. The French luxury giant set up its first factory in Romania in 2002 to make full use of the local low-cost labor force. By 2004, the company produced 1500 pairs a week. shoes In 2007, the output reached 100 thousand pairs. In 2009, the group built a new factory in Romania to manufacture handbags and suitcase accessories.

In addition to Romania and Bulgaria, Portugal also has a large number of luxury factories in the relatively backward developed countries of southern Europe. Paulo Vaz Vaz, chairman of the Portuguese textile and clothing association, said that although the Portuguese cost of labor was higher than that of Eastern Europe, only half of the luxury brands gathered in France and Italy, and their delivery time could be up to 2-5 weeks.

Even the situation of OEM in Romania and Bulgaria may be changed by the cost of rapid rise, Bulgaria. clothing Radina Bankova, the chairman of the textile producers and Exporters Association, said that the competitiveness of the country's wages is declining, and that the next Bulgaria will probably appear somewhere in Africa.