Thursday, 16 April 2009

Luxury Fashion Executive Domenico De Sole: 'Stay the Course with the Brand'

(Click link to read the artical)
Published April 15, 2009 in Knowledge@Wharton, this is an interview with Domencio De Sole, the chairman of Tom Ford International, and the person believed responsible for the turnaround of Gucci in the 80s.

A fascinating discourse on brand management. Some excerpts.

Knowledge@Wharton: What kind of strategy would you suggest a luxury goods company follow?
De Sole: The strategy for all luxury goods -- and I think excellent managers understand this strategy -- should be the traditional set of managing for cash in difficult times. Watch your costs very aggressively. But, at the time same, stay the course with the brand. Discounting prices really doesn't make a lot of sense. At the end of the day, it is imperative for luxury companies to deliver good value. It doesn't mean the price has to be lower. Just make sure that whatever is delivered is a good value -- great quality, great fashion, great brand.... The savviest people know that the number one [strategy] is to stay the course.

Knowledge@Wharton: In what ways do you think that the financial downturn has changed consumers? You started out talking about this, about how consumers are now pushing back on price. They are much more sale and discount conscious. Will this be a long-term change or, as you touched on earlier, might they revert back to their old ways once the recession is over?

De Sole: Again, nobody knows the real answer. But my instinct tells me that this difficult time is going to last. It's not going to be fixed in a few months. I think that people obviously are very concerned. But my experience is that at the end of the day, the consumer forgets. People love luxury brands. Historically, if you think about it, during the Stone Age, people were buying bracelets and earrings made of stone. So it's something that's part of human nature. My sense is that things will get back to being good. The real issue is, that it's going to last some time. I think that it's going to be a year, or two, or three. But nobody knows.

ritu and venkat

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