A wave of direct-to-consumer brands relying on Italian factories for production and manufacturing are grappling with what the next few months will bring with coronavirus continuing to spread globally.
It’s a time when companies are doing everything they can — from discounting products to slashing marketing budgets — to stay afloat. With most Italian factories closed, brands that have long relied on those operations are unsure of where the brand’s future lies. Some, like shoe company Thelma, work with groups of manufacturers across Italy. Other DTC brands including M. Gemi, Frances Austen and Bells & Becks rely on Italian artisans and workshops to make their products, which range from shoes to sweaters. Across their homepages, Instagram and other marketing, these companies all promote the fact that they are “Made in Italy” — it’s part of what sets them apart. Pivoting to be a brand that is no longer made in Italy poses big challenges.
Amanda Greeley, founder of Italian-made shoe company Thelma, said that, because her products aren’t seasonal, she feels a bit relieved going into warmer months that she won’t be left with excess inventory from spring. Most Thelma products can be sold year-round because the brand doesn’t focus on special summer colors or prints. Thelma sells a range of loafers, slippers and mules in staple colors like brown and black, some with pops of color.
Not all companies will be that fortunate, said Ronen Lazar, co-founder and CEO of retail software platform Inturn.
“Excess inventory is piling up in closed stores and warehouses, spring items will be pushed to fall and sold at a deep discount. Fall will be delayed creating a new cycle of excess product for brands to sell. And while some stores are continuing their e-commerce operations, many are not fulfilling orders at the current time,” said Lazar.
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Greeley did not specify how much inventory she currently has access to, but said that if these quarantines continue for much longer — and inventory dwindles while production is halted for another two or three weeks — she may need to rethink her business strategy moving forward. Especially if factories become so hard hit that they cannot reopen for business in the near future.
Italy has been under a national quarantine since March 9, with some northern provinces shutting down a day earlier. Recent reports estimate that the country’s quarantine will be in effect until at least April 12.
“You can only operate your business for so long before [this quarantine] financially becomes an issue. Business has slowed noticeably in the last few weeks, but we are still taking some orders,” Greeley said.
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For now, Thelma, like other companies, is shifting focus to upping engagement with customers.
“Across the board, supply chains are being disrupted. It’s a major challenge that we haven’t even seen the full impact of yet, in terms of stock running out. During this time, it’s important for brands to be building a loyal customer base,” said Graham Cooke, co-founder and CEO of personalization technology company Qubit.
Greeley said she has noticed an uptick in emails from customers looking to connect, not with questions about orders but more just to say hello and show support. For now, she is spending time responding to those customers and cultivating closer relationships with her shopper.
While looking to other countries for production is always an option — Portugal and Spain are also known for their shoe making — Greeley said that wouldn’t give her the results she’s used to. Spain’s and Portugal’s quality may be comparable to Italy, but countries are also facing this unprecedented pandemic.
“I’m committed to keep trying to manufacture in Italy, if possible. But in two months, if it seems like they won’t reopen, there is a real possibility that there might not be a solution,” Greeley said.
