Day 9

This morning, I enjoyed a beautiful walk along the river to the Arena, the amphitheater, and the castle. On the way back to the hotel, we stopped at some local shops and had gelato for lunch (as usual). After the free morning, we took a public bus to Mero&More.

The visit began with a series of statistics. 25% of manufacturing in Italy is related to fashion, and 20% of the national revenue of fashion comes from the Veneto region. There are about 9,000 companies in the fashion market in Veneto and 1,300 manufacturers in Verona alone. Over 80% of the manufacturers in Veneto are family run with less than 50 employees.

Mero&More is a member company of the Consortium. The Consortium was created in 2000 to help small fashion companies survive in the globalized world. They work to internationalize local markets. Member companies are family owned production entities that pay initial, annual, and specific project fees for the services from the Consortium. Any company can join based on the stipulation that they must be willing to collaborate with other members because most projects involve 3-6 companies with similar needs.

Due to changing economic and social standards, the fashion industry is changing. During the financial crisis, fast fashion stores like H&M and Zara opened for customers who cared more about price than quality. Some companies moved their production out of Italy for lower costs. This severely damaged the profitability of the companies in the Consortium since they were losing business to big competitors with less quality. However, the Consortium did not give up, and now there is a movement of resuring. Resuring is when companies bring their production back to Italy.

The biggest piece of advice that the Consortium can offer to its members in the changing market is to focus on marketing in addition to having a quality product. If you cannot reach the buyer, then you will not be successful. Since member companies are small, they need help with globalizing to new markets. Therefore, the Consortium will reach out to its network of consultants that will aid the company in its project. Essentially, members pay to be a part of the Consortium so that they can easily connect to the help that they need. Due to the unpredictable nature of the market, the Consortium will not recommend product advice, only training to reach international markets. Another asset that the Consortium can offer to members is their brand name. By linking themselves with the Consortium, member companies look more appealing to buyers. This is especially important when a company tries to reach a new market. This strategy is called family branding, and it is effective in that customers are more likely to buy from a company that they know. The Consortium’s name is recognizable in many global markets.

Most companies within the Consortium are production companies. In the supply chain, they serve as the wholesalers and sell business to business. However, with the Consortium’s help, some companies move to business to customer in which they vertically integrate forward to sell directly to the end user. This way, they cut out the middle man and can potentially make more money.

After learning about the Consortium’s business plan and mission, we toured Mero&More. Mero&More is a production company the rents out space to designers and stylists who are trying to start their own business. The company offers co-working space that includes: a production floor, cubicles and a studio for photoshoots. On the production floor, fabric is cut and then sent externally to be sewn and sent back for quality control. Ultimately, Mero&More aims to optimize fabrics so that they can be mass produced. They employ stylists to test designs and make sure that they have the capability to be produced on a large scale. The fabrics that Mero&More buys are from Lake Como, so their products are actually made in Italy.

Small, start-ups like the ones that Mero&More supports are currently facing problems with the “Made in Italy” tags. Right now, companies can use the tag if two steps of the supply chain happen in Italy. This is good for medium sized companies with the capabilities to move parts of production to cheaper areas, like China. However, this is bad for small companies who cannot. It is more expensive to produce in Italy, so these small manufacturers must charge customers more for their products even though they are essentially the same products made by medium sized companies that have the competitive advantage in their production.

Overall, I found the visit to Mero&More to be very informative. I enjoyed hearing about the Consortium’s business model of helping local companies globalize. In the United States, we have private consulting firms that are similar. Companies can hire the consultants to help them with their business needs. Also, consulting firms have a wide network of contacts that they can employ to help with projects. This advantages companies in the same way that the Consortium does. They provide specialized services to help businesses grow.

After our tour, we headed back to the hotel and went out to dinner by the Arena. At night, the lights made the walk through Verona magical. I am so sad that we have to leave tomorrow, but I am excited to be back in Milan for the final leg of our trip!

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