MILAN — 2021 was a key year for Valentino, as CEO Jacopo Venturini carried out the repositioning of the brand, further elevating its couture status and returning the company to the black and to 2019 sales levels.
“I always thought Valentino is legitimately a maison de couture,” said Venturini during an interview at the brand’s Milan offices, despite the fact that the repositioning involved making choices that would also take a bite out of the top line, such as the phasing out of the Valentino Red collection. As reported, the line will be phased out and terminated beginning in 2024. “This means giving up on 90 million euros, but it was a necessary decision,” he explained.
Another important step was to streamline the company’s wholesale accounts and reduce markdowns.
Despite the latter decisions and the impact of the pandemic, in the 12 months ended Dec. 31 revenues rose 39.6% to 1.23 billion euros, compared with 882 million euros in 2020. At constant exchange, sales climbed 41% on 2020 and 3% on 2019.
In the fourth quarter of last year, sales grew 11% at constant exchange compared to the same period in 2019, and retail sales climbed 29%, driven by full-price sales, balancing the contraction of markdowns.
December was the highest-performing month in the history of the company, also driven by full-price sales, a personalized concierge service on- and off-line and a gifting and Party Christmas capsule collection. Venturini highlighted the growth of fashion jewelry and belts and said capsules have been attracting new customers. Millennials and Gen Z account for 65 percent of Valentino’s customers.
The Rome-based company swung to profit compared with 2020, when it reported a net loss of 127 million euros, but full-year figures are preliminary, need to be approved by the board and could not be disclosed yet.
In 2021, retail sales were up two percentage points to represent 57% of total revenues compared with the previous year and Venturini is aiming for this channel to account for 70% of sales by 2024 or 2025.
“Shifting our focus on retail means we are changing the motor of the company and also shining a spotlight on human resources, putting the human factor and creativity at the center,” he observed, viewing the group’s salespeople as “ambassadors of the brand, who make a difference” in the organization.
Accordingly, the company has been staging training courses on empathy and personal relations, in “fueling passion” for the profession, offering “opportunities and alternative career paths depending on the individuals to emphasize their specific talents” within the stores, always in a client-centric strategy. “We offer more flexibility to the ambassadors so that their schedules are more in tune with those of the customers and we’ve replaced the idea of a department manager with the team manager so that the same person can assist a customer whatever the category,” said Venturini. The process has started in 70 stores and will be rolled out globally.
“This is a way of thinking, a message and a sense of belonging that will reach the customer in a natural way,” contended Venturini. “Luxury has seen an exponential growth for the past 10, 15 years, but retail has not necessarily paid attention to these elements. [Fashion luxury brands] don’t merely satisfy a need, we spark desire. The interaction with the client adviser must be magical and in sync with the expectations in the value chain to avoid it being dystonic.”
Wholesale sales in 2021 represented 41% of the total, down from 44% in 2020, in sync with Venturini’s strategy, but he said the channel remains important as a sounding board — “fundamental to grow and challenge oneself with someone that has an expansive vision of the business, although we are choosing partners that believe in our repositioning.”
E-commerce grew at a double-digit pace compared with 2020 and a triple-digit pace compared with 2019. It accounted for 16% of retail sales in 2021 compared with 5% in 2019.
Valentino has been internalizing its e-commerce, which was previously managed by the Yoox Net-a-porter Group, starting in mid-February by a launch in Japan. In May, it will reach the U.S., followed by Europe. “It will allow us to be client-oriented and truly omnichannel,” said Venturini, as well as more entertaining. Valentino has been exploring “moments of evasion” online and on different social media platforms, offering performances by Alicia Keys or asking a group of authors and poets to create text-only image campaigns involving the likes of Donna Tartt or Ocean Vuong.
Ready-to-wear last year represented 32% of sales and accessories accounted for 66% of the total. “We worked a lot on our pillars in the past year and a half, launched the Roman Stud, supersizing the studs. We worked on the logo, blending the logo and the stud,” noted Venturini, adding that a stud closure is so highly crafted that it takes nine hours to complete it.
The company has been raising the positioning of the bags, retailing at between 2,000 euros and 3,000 euros, but is adding some entry price points.
The Rockstud shoe has become “super iconic” over the past 10 years, said Venturini, adding that 70% of new customers approach the brand for this item.
Furthering its sustainability efforts, two of the brand’s signature sneakers, the Open and the Rockstud Untitled, were redesigned with the environment as a priority, partially involving recycled and bio-based materials, the latter employed as an alternative to leather produced from viscose and polyurethane of corn-derived polyols. These materials partially make the upper material of both models and part of the Open’s side band; the strings are completely made of recycled polyester, while Valentino’s signature studs on the Rockstud Untitled are also made of recycled nylon.
The environmental approach was reflected in the shoe case and the packaging, made of fully recycled cotton and paper, sourced from sustainably managed forests.
Asked about potential price hikes, Venturini said given the higher costs of raw materials and energy, the company has raised its prices by 5% in 2022 so far.