On the second day in Milan, we decided to jump right into what Milan is most well-known for… shopping. We took the metro to a major shopping district, the Galleria, as well as smaller leather shops. These Galleria companies and smaller shops both compare to each other as completely different parts of the supply chain, as the Galleria district shops are known for exclusively selling to consumers and the smaller leather shops are known for designing items made from the leather and then selling them to the bigger companies, as well as occasionally selling to consumers.
The Galleria is well-known for high-end Italian fashion companies to have shops in. The original Prada shop which opened in 1914, is in the Galleria. The Galleria is also home to a second Prada store (as of 2012), Louis Vuitton, Gucci, Versace, and many more well known fashion stores. These places usually function as customers to shops that make the leather, and as downstream suppliers to consumers purchasing the leather for personal use. This area is significant to Milan, as it is where many wealthy Italians go for their leather purchases.
After visiting the Galleria, we went to visit two leather shops, Gravi, which is owned by an artisan who has been designing leather products for over 40 years, and IF, which is owned by a younger woman who designs leather products. Both of these shops buy leather from upstream suppliers in Venice and Naples, and both shops also serve as downstream suppliers, selling designs for leather products to more high end companies. In Gravi, the owner, talked about how buys leather from different cities in Italy that are made from crocodiles, cows, and snakes. He then talked about how he cuts the leather and makes everything from bags, suitcases, and wallets. The companies in other Italian cities that he buys leather from are upstream suppliers, and his shop functions as a downstream supplier when cutting the leather and making either designs to sell to other companies, or finished products to sell to consumers. IF, on the other hand is a larger company than Gravi, but it follows the same supply chain, and the owner is one who made also made it through hard work and a passion for craftsmanship.
In my opinion, the entire leather supply chain in Italy is a very difficult concept to grasp, as there are multiple supply chains. One of these supply chains that we could see today involves leather being made in cities such as Venice or Naples and being sold to small companies such as Grazi or IF. The other supply chain involves the product designs made at small companies like Grazi or IF being sold to larger, more well-known companies, such as the ones that have stores in the Galleria. Once these concepts can be grasped, it is easy to understand the role of each part of these supply chains and the strong effect that they have on the fashion industry as a whole in Italy.
During my experiences today I was very interested to find out some more cultural differences between Italy and the US. For example, in Gravi, I was amazed to see the interest that the merchant took in his craftsmanship. In the US, I am used to seeing mostly products made by machines, as they have often become more efficient than merchants making their own products. I found it relieving to see the traditional practices of leather making still alive in Italy, and that people still take pride in such an intricate art. I was also amazed to see the lady selling leather at IF offering to negotiate prices with students. While this is a common Italian practice, it was very interesting watching students bargain with her as we only have set prices for goods in the US, and as we had just made friends with the lady.
One theme that ties into this entire day is Industry Analysis. There are a few categories of companies in the Italian leather industry. There’s big high end companies, such as the companies in the Galleria, there are also smaller shops such as IF and Grazi, and there are leather distributors who make the leather themselves from animal skin. The big leather companies often have to come up with tactics to compete with each other as there are many top companies. An example of this is companies like Prada and Gucci each trying to find the best third party supplies like IF or Grazi. Some of these third party suppliers have been facing some major issues about location, however. The street of Corso di Porta Ticinese used to be filled with these types of shops but today IF and Grazi are the only ones of their kind remaining on this street. This is because many of these shops have re-located outside the city of Milan due to high operating costs in the city. This has led to many negative consequences in tourism, as it discourages competition between these types of small shops leading to a surge in prices, and that tourists and locals in Milan are missing out on a lot of this high quality leather. There are few other issues facing these leather companies, and traditional Italian leather making practices are still thriving all over the country. I was blown away by these leather practices and am eager to learn more when we visit Scoula Del Couio (a Florentine leather school) in just a few days. Stay tuned!
