CASE HISTORY 3

LUXURY LEATHER GOODS (RIMINI)
from the book: Interim Manager "A profession  in step with the times"
published by Wolters Kluwer Group Italy (Ipsoa publisher) release July 2011
by Gian Andrea Oberegelsbacher

The business context was that of a company specialized in the production of high-quality bags but dedicated for years to work as a subcontractor on behalf of major Italian brands, depending entirely on the orders of the 4/5 main clients, without having a sales office, much less identity of its own in terms of image and product. The owners' request was to create a new "Brand" with the name of the Family, start a sales and marketing office and start marketing their new products in Italy and abroad, while still maintaining their current business as a subcontractor that at that time was around 5 million Euros. 
The company had about fifty employees, mostly seamstresses and modeling in the Italian headquarters and a hundred in a production facility in Romania, the target they set was to sell  1000/2000 bags in the first year of operation, at an average retail price of 150/200 euros, equal to  400/500 Euro selling price at the end-user, positioning itself in a high end of the market, namely branded luxury. This case history shows how, the intervention of an Interim Manager, can quickly lead company owners towards new markets, new channels, and new business even when the strategy and logistics push them out of their “comfort zone”.
This case history was very operational because it was a real race against time. The mission began on 1 December 2006 and the initial urgent goal was to be able to participate in the MIPEL (industry fair) that took place in March, so I had only 4 months to start operations and launch the product on the market. The objective difficulties were the lack of a commercial office, (indeed, my office was missing..), which was realized under the Christmas holidays by dividing the meeting room!  The initial budget at my disposal was very small, the company organization was minimum as they were used to working as subcontractors, the brand did not exist and had to be launched from scratch, but the product was very nice and distinctive, this convinced me to accept the mission, together with my previous experiences in fashion and especially in the world of leather goods, as CEO of Zippo Fashion Italy and member of the Board of Directors of AIMPES (Italian Association of Leather Manufacturers). 
Last but not least, the psychological qualms of the 2 young entrepreneurs (craftsmen), accustomed to producing for third party, less accustomed to being proactive on the market and not used to have a manager who told them what to do and to press them on actions and investments to be made. These were the things to be set up immediately, all important and all priority so that we could present ourselves well on the market. The product had an intrinsic beauty, a related and distinctive image, in an interesting market segment but challenging concerning competition and not easy for positioning: The  Brand creation/logo - Website creation - Coordinated image, from the brochure, print, up to packaging, labeling, etc. - Startup sales network Italy and abroad, search and selection of agents and distributors - Insertion at the Milan fair, creation and ideation of image stands - Creation of the Commercial & Marketing office, insertion of 1/2 resources to project. 
Oversight of the collection, from No. lines and products, coordinated image, choice of products for the launch and identification of the "must-have" of brands within the collection In December I immediately started the phase of "construction" of the general image and the identification of the collections, to start the production of samples to be shown to the agents concerned and decide the lines to be presented at the fair and then to be produced in different "repetitions" of samples.
In January I started the selection of resources that would support me, starting to find the first agents with important showrooms also on Milan,  as many will know, international buyers hardly move around Italy. In the meantime, I managed to get a very good position at MIPEL and started to reason the stand suitable for the product and conform to the image that we wanted to give to the market, in the meantime I hired a marketing manager that I had already had in a previous company and that gave me a huge hand in supplier scouting and all the operational details, the commercial manager identified at the end of January, would arrive a few weeks from the fair.
In February (3rd month of the mission), we had identified the collection almost definitively, started to produce the samples, decided the final image, and already selected the first agents, some of them abroad, who would preside over the fair and start inviting their customers.
The same the new sales representative started to invite buyers of the most prestigious stores and chains and opinion leaders Italian and foreign, for those who are inside the world of fashion, from Rinascente (Mezzanino,  MI), to Luisa Via Roma - Florence, Penelope- Brescia, Cherry-Moscow Forest, Barneys- Tokyo and NYC, Mito, Etc..  I had to ask the company for a huge effort in terms of overtime and working weekends, to produce the collections,  to photograph them for catalogs, and be ready at the fair not only to exhibit but to deliver samples to the new agents and distributors that we hoped to find. I got this effort by speaking directly to all the workers on a couple of occasions, bringing them together at the end of the shift and explaining to them well the goals, (I still have in mind the terrified faces of many of them, who were not used to a meeting-communication of the company...). In doing so I got their “buy-in” on the project and the maximum effort, rewarding them also financially obviously, but also with the trip to the fair paid by the company, to be able to see the fruit of their work (this was the thing most appreciated by them, I still remember their smiles and tears of satisfaction of modelers and seamstress at the fair...) We arrived at the fair with a stand of 50 square meters. very elegant and refined, cost only 10,000 Euros, with 5 agents in Italy and 2 foreigners and it was a resounding success, for four days we could never eat at lunch, the stand was invaded by customers, who grew by the day on the word of mouth of buyers, we made hundreds of orders-proof selling 3,000 bags at the fair for a value of 500,000 Euros, 80% of which were abroad with prepayment. But above all we entered the best stores in the world, with a laughable initial budget, we had 10 requests for representation between agents and distributors in the world, partly satisfied immediately with the stocks of repeats of samples that I had planned, thus closing the post-fair sales season with another 3,500 bags sold. The final result saw 6,500 bags sold under the new brand and in the first season alone (Autumn/Winter), equal to almost 1 million turnover, corresponding to one-fifth of the company's total annual turnover, compared to an initial target over 2 seasons of 1000/2000 pieces.  My assignment finished with the follow-up management of the after-show and the final handover to the 2 managers hired during the start-up.

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