Tod’s Reinvents Its Business Model to Target Younger Consumers

MILAN — Tod’s chief executive officer Diego Della Valle is overturning his company’s business model and launching a new project called Tod’s Factory, in a reference to Andy Warhol.

“It’s work in progress, we started developing it around six months ago,” Della Valle revealed ahead of the Tod’s runway show in Milan on Friday. “It means we will start dropping more collections throughout the year, capsules and limited editions, in collaboration with different individuals and friends of the house.” The executive declined to provide additional details about the designers, but said the first such collection would bow in June or July.

“Collections can no longer be presented every six months, and this is part of a new way to communicate and tell our story,” he explained. “This business model offers great opportunities; we can be faster and better control the collections.” Della Valle declined to say whether the women’s fall show, designed by a team, would be the last for the house. “We want to surprise you,” he said. He has been reviewing the role of a creative director after the exit of Alessandra Facchinetti in 2016, leaving the job to the brand’s team.

Della Valle is courting a younger customer and the collaborators on the capsules are young. “The products will be seen through the eyes of a 25-year-old. I feel we are like editors of a magazine, putting it together every month, or every two at the most,” he observed. He already has set the change in motion by tapping Kendall Jenner for Tod’s spring ad campaign, for example, and by working with influencer Chiara Ferragni on a capsule.

Smaller collections with more frequent drops also fits in with the fashion world’s latest strategy to try to excite consumers beyond the main seasons twice a year. Picking up from streetwear brands such as Supreme and Kith, luxury labels from Givenchy to Kiton are adopting the concept. Moncler just unveiled its Genius project in Milan, hinged on multiple collaborators and more frequent product drops.

Tod’s is going through a shakeup of its executive rank to help push this strategy forward. “It’s a moment of generational turnaround, [the executives] are not worse or better but different, as we used to work at a seasonal [pace],” Della Valle said.

As reported, Claudio Castiglioni, global general manager, is expected to exit the company in the spring. Castiglioni previously also served as president of Tod’s USA.

In November, Tod’s revealed that CEO Stefano Sincini was leaving after 33 years with the company, to be succeeded by Umberto Macchi di Cellere, previously managing director of worldwide sales for all product categories for the Bulgari brand.

Last month, the Italian luxury company reported preliminary sales of 963.3 million euros in the 12 months ended Dec. 31. This was a 4.1 percent decrease compared with one billion euros the previous year, but Tod’s said it registered an uptick in the last quarter of 2017. At constant exchange rates, revenues were down 3.1 percent.

Della Valle said then that 2018 was going to be a year of transition, citing the new team of managers and a strong component of innovation.

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