Luxury Can't Cut Corners — Creating A Brand That Lasts Forever | Exclusive Interview With Valextra Global CEO

July 20,2019

"Our real vision is to create a brand which is beautiful, pure and timeless," said Sara Ferrero, global CEO of Valextra, a leading Italian leather brand. “… rather than being a company valued $1bn in 3 years… I think that's luxury.”

In 2013, NEO Capital, a London private-equity fund invested in Valextra and became its largest shareholder, with a 60% stake of the company. In March 2015, NEO fund partner Sara Ferrero became the global CEO of Valextra, leading an elite team to revive brand value and explore the global market.

So far, Valextra has opened 27 boutique stores globally. The first store in China is located in Plaza66 in Shanghai. The second store, also known as the first flagship store in China, opened in Sino-Ocean Taikoo Li Chengdu in the spring of 2018. On March 26 this year, Valextra opened another flagship store in Taikoo Li Sanlitun Beijing. Luxe.Co had a chance to talk to Sara Ferrer and further discuss product innovation, store design, branding strategy and their future plans in China.

Beijing Flagship Store: Modern Art Museum, Home, Immersive Experience

Adhering to Valextra's brand concept of ‘integration with architecture’, the brand invited London- based Italian designer Martino Gamper to design the flagship store in Beijing. 

A fine architectural space can break the limitations and constraints, it opens up and invites people to be immersed in the space, and become a part of it. Although Martino Gamper refers to many Chinese culture figurative elements such as the library, he doesn't want to associate to any specific entity — “People have five senses, through the eyes, ears and more to capture information… e-commerce enable customers to make quick purchases, but a physical store is able to provide a more comprehensive experience. What we've created is not just a shopping place, but a place where people feel at home and can talk to each other.” said Sara Ferrero. 

In recent years, more and more brands have started to innovate their retail concept, building a shopping space which integrates more closely with the local scene. “It's interesting that more and more brands are launching pilot stores which offers an immersive experience. Even these Internet brands such as Warby Parker are starting to create offline experiences. Physical stores are an integral part of the world.”

At the same time, Sara Ferrero pointed out that the reason why consumers buy a certain product is not only the love of the product itself, but also the recognition of the values conveyed by the brand.

Consumer Insight: "The Chinese Market"

Sara Ferrero marvels at the sophistication and wealth of knowledge of Chinese consumers. "I don't know exactly where people get their information, but it's really fast. It may be the power of social media, but also curiosity about real products and brands."

She found that Chinese consumers know the brand inside out, are very sure which product they want, and make their own suggestions directly to the brand about the colour of the product. Interestingly, Chinese consumers tend to come in groups of two or three, with one person buying one day and others coming back the next.

In terms of age, the average Chinese customer is younger than the global average, with a wider range from 20 to 60. “ I think it has to do with the income of the new generation in China, in Europe and the US, older people are able to afford luxury bags, but not in Asia -- especially in China."

In terms of product selection, the younger generation prefers smaller sizes, brighter and bolder colours, and casual styles, while the older generation prefers larger sizes and classic colours.

Sara Ferrero said “… performance was "better than expected" in terms of sales at its flagship store in Beijing, which has been open for a month. As a result, we have an idea that we could start pop-up stores in Beijing and maybe gradually expand to other cities”.

As the Chinese market booms, Sara Ferrero has also outlined some challenges. “The biggest challenge is how to cope with rapid market changes. You learn something and the next day it's already going out of fashion. We need to listen, we need to try. We need to talk to consumers, and keep growing and changing” she says, broadening boundaries to attract customer attention and not being afraid to make mistakes — “… in China, not making mistakes means not trying your best.”

Sara Ferrero also made a specific point — “The brands are not just for the China Chinese Market, but for “All the Chinese Markets". “ You can find Chinese people in New York, in Italy — it’s no longer about building a brand for China, it's about building an international brand."

Future Plans: New Products, New Cycle, New Stores

"Valextra is known around the world for its leather goods, not only for women's bags, but also for men's bags and travel bags. When we entered the China market, we decided to focus on women's products first. Now with bigger stores, it's time to introduce more men's products. In the near future, we will also introduce travel products."

In the store, we also saw the latest line of sneakers. Currently, only on sale in Beijing, Tokyo and Milan, these sneakers nearly sold out after two months.

While talking about the reasons for the popularity of sneakers, Sara Ferrero believes that part of it comes from the comfort and versatility of sneakers.

Furthermore, sneakers are relatively affordable. ‘We started with larger cities, and the reason for doing this is because we don’t want to be a super-luxury brand that only a few people can afford.”

Using rich colours is a feature of Valextra bags, which is also used in the sneaker series. "We have over 40 colours, and every six months we launch a different set of colours. Six colours, six combinations, unisex, different sizes."

According to Sara Ferrero, Valextra has many more upcoming projects. “We are cooperating with a talented designer for new series of sneakers, and there will also be new items in the travel category next month.’’

As for the store layout, Sara Ferrero told, "We currently have 27 stores around the world, and this is just the beginning. There is no doubt that in the future we will expand to other big cities in China. We are focusing on strengthening our existing market now, so we have added one store in Hong Kong, one store in Hawaii and two stores in Japan. From a distribution perspective, we don't want to just be everywhere -- Valextra's philosophy is to be unique."

More Interviews with Valextra CEO Sara Ferrero Below:

Luxe.Co: Valextra has a long history and a solid core consumer base in Italy and Europe, China is a relatively new market, so how does Valextra plan to "tell a story" in China?

Sara Ferrero:I think the story that consumers are seeing today is very different and international. The only way a brand can relate to its customers is to be honest and share their story, the story that you really care about, because it is important to you and it's beautiful. That's what we're trying to do. We have a WeChat public account, and through it, we share stories about our co-designers, the reasons and significance of our collaboration, as well as a source of inspiration for product design, and try to show more of the brand itself.

Not many companies have products that are all handmade, but Valextra does. We are a small company with 28 people in Milan and 60 people in charge of production. This is our story, the story of every employee. They not only work, but also put their heart and soul into it.

We don't want to force Chinese consumers to accept our message, but instead try to keep it open and authentic throughout our digital marketing strategy -- we're too small to afford expensive advertising.

Luxe.Co:  How does Valextra target customers accurately? How do you communicate with customers in a better and more efficient way?

Sara Ferrero:Frankly speaking, this stage is more about customers finding us than us finding customers. A lot of stars are using our products and bring a lot of attention -- something we can't do on our own at this size of our business. Some of our classic design bags have also appeared in TV series, which not only increase our popularity, but also amplifies the brand image. It's interesting that many Chinese women feel connected to movies/TV shows, and in a way they also connected to our brand.

Now that people know Valextra exists, it's time to let everyone know who we are -- not just in the superficial sense that many celebrities use the brand, but in the sense that they know more about the values of the brand. We want to make Valextra a brand entity that can be used outside of special occasions without the halo of "star use" and "appear in movies" in the minds of consumers. It's a little complicated for a small company, but it's something we try to do every day.

Why did we set up a store in Taikoo Li? That’s because we know that this is a stunning store in the open space — consumers will come to explore it, and there is enough space for us to put a lot of our products. It's a way of building our brand.

Luxe.Co:  What is your strategic plan for the future of Valextra? What is the goal of the third stage after increasing brand awareness and Brand Cognitive?

Sara Ferrero: Loyalty. People who know you don't necessarily become loyal customers. Although we have not yet completed the goal of the second stage, it is clear that the first step in building loyalty is to get to know Valextra.

In addition to popularity, good-looking products and high quality are necessary, because these are the things that customers use every day. Sometimes people focus more on gross margins and profitability and start cutting corners, but the luxury industry can't cut corners. The quality will continue to improve, as will the store experience.

Luxe.Co:  As you said, many Chinese consumers know Valextra brand through stars and TV dramas. How do you think it affects brand image and product sales?

Sara Ferrero: It's a great way to spread awareness. It's almost impossible for a small company to get that level of attention in just two years, unless you spend a lot of money on advertising. The other thing that's very true is that we don't actively talk about sponsorship.

As I said before, we should be cautious when it comes to celebrity endorsement. Although it is not a bad thing to find a celebrity endorsement that deviates from the brand image, which can improve popularity in the short term, it can cause confusion in the long run.

The fact is most of the time, the stars chose us, not us choosing them. And that's why it's true. One day, we will take another step, though I don't know when. Of course, we need to get people to start identifying brands, not just stars and catwalks, but the entire production process. Since everyone carries a bag, this is possible.

Luxe.Co:  You have extensive experience in the luxury industry. How did you see Valextra before you became CEO of it?

Sara Ferrero: Valextra had just been acquired when I joined NEO, and when I wasn't looking at the brand as a fund partner, the deeper I looked, the more I felt that it was a huge undiscovered treasure and I wanted to give it a chance. About three or four years later, I felt I could do more for the brand, so I came here as CEO.

Luxe.Co:  What was your plan for the brand and how did you implement it?

Sara Ferrero: I thought of Valextra as more of a product company, lacking storytelling, which is why brands need to be bought.

I think the best way to attract customers is to provide a brand experience that is based on the product but beyond the product itself, so I changed the brand from a wholesale model dominated by agents to a retail model.

This way we start to get to know the end customers and talk to them. Over the past eight years, the global environment has also changed dramatically, with many product makers turning into communicators and narrators. We have to change the way brands show themselves and speak up.

In terms of products, we're starting to focus more on women, creating unique and powerful retail concepts and immersive experiences.

In terms of branding, we need to tell more stories. Honesty, authenticity, fashion and modernity are key points. 


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