The rise of affluence in Asia has brought on a wave of demand for luxury goods. Feeding that wave is a small town outside of Florence, bustling with activity to create “Made in Italy,” luxury goods. Matthew Dalton reports for The Wall Street Journal:
SCANDICCI, Italy—This district of drab industrial buildings outside Florence is getting crowded as high-end fashion houses jostle for an edge in one of the industry’s most important products: the expensive leather handbag.
Luxury giants from Prada to Burberry are snapping up workshops, expanding their own factories and building new ones around Scandicci, the hub of Italian leather-goods production, where artisans churn out Made-in-Italy handbags, wallets, shoes and other accessories for shoppers from New York to Beijing.
With the global appetite for high-end leather products only getting stronger, brands feel they need to take control of their supply chains to make sure they can produce enough goods—and bring new products to market faster to satisfy the fickle tastes of shoppers.
While ready-to-wear clothes showcased on the runway dominate fashion headlines, accessories generate a third of all revenue from personal luxury goods. Handbags in particular boast some of the industry’s biggest profit margins since they are expensive but take up little space in boutiques. And unlike shoes, they don’t need to come in different sizes.
Italy’s high-end leather supply chain has for decades been dominated by small, family-owned workshops producing under contract for the big luxury brands. Now, the brands are concluding they need to modernize to compete. Many have embarked on a shopping spree, buying up their subcontractors, building their own factories and training their own workers in the craft.
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