Francesca Bellettini of Saint Laurent says creativity is at the heart of the label's strategy
Setting up dedicated product category units, paying close attention to local customers, investing in manufacturing and R&D: these are some of the factors that have contributed to Saint Laurent's tremendous success in recent years, as revealed by the label’s CEO Francesca Bellettini at the 2022 luxury market forum staged in Milan on November 15 by Altagamma, the association of Italy's top luxury names. On the occasion, Bellettini announced that Saint Laurent will be making significant investments in manufacturing in the next two years.
The Kering-owned luxury label will in fact boost its output capacity for leather goods by opening a 28,000 square meter factory in Scandicci, near Florence, inside an old industrial building owned by Italian investment bank Cassa Depositi e Prestiti, which has been entirely remediated and renovated. Staff that is currently operating at a smaller factory in Scandicci will move to the new site in 2023, where an extra 300 new employees are expected to join them. “We are going to set up an R&D facility there. This is a key activity we are keen to carry out internally, while continuing to expand manufacturing output with our partners,” said Bellettini.
Saint Laurent’s policy is to look for skills “where they can be found, which is why, for example, we will be sourcing a certain type of handbag in France,” she added. Another project Saint Laurent is busy on is the enlargement, in 2024, of its footwear factory in Veneto. Bellettini noted that “companies that have delocalised their sourcing are currently backtracking. In luxury goods, consumers demand quality, and are willing to pay the price for it.”
This is why, ever since she arrived at Saint Laurent in 2013, the Italian executive has put “creativity and brand reputation at the heart of [Saint Laurent’s] strategy.” A formula that has clearly paid off, since in 10 years the label’s revenue has grown from approximately €500 million to €2.52 billion in 2021. Moreover, in the midst of the Covid pandemic, between 2020 and 2021, Saint Laurent’s sales soared, growing by 45%. And in Q3 2022, the label recorded the best results among Kering's brands, increasing revenue by 40% (and by 30% on a comparable basis) to €916 million, with an EBIT margin of 30%.
“This result stems from the strategy we deployed prior to the pandemic. We repositioned the brand with the goal of reaching [a revenue of] €3 billion. From this starting point, we engaged in a highly pragmatic effort, imagining the various scenarios through which we could achieve our goal, always putting creativity, an intrinsic part of our DNA, centre stage,” said Bellettini, who works closely with creative director Anthony Vaccarello. This creativity, whose seeds were sown by founder Yves Saint Laurent since the label’s launch in 1961, continues to be a constant feature.
To begin with, individual business units were set up for each product category, each managing the development process from product concept to in-store delivery. These units “fosters extensive skills, including R&D competence.” Bellettini added that “sourcing in Italy is important, but the core competence for ready-to-wear is still France-based, while accessories have chiefly developed since the label became part of the [Kering] group,” via the entity then called Gucci Group.
Focusing on local customers
The second fundamental factor of success is a much more localised market approach. “When I joined, [the business] was mostly managed by retail executives, who primarily ran the [label’s] stores at a regional level, reporting to Saint Laurent's head of retail sales. I decided to transform them into fully fledged local managing directors with wider responsibilities, giving more independence to the regional offices. We want local customers to become more familiar with the label, and nobody knows these customers better than the people who work locally,” said Bellettini.
“This enabled us to develop a set of best practices which were then applied to our stores, and also to expand our retail presence more effectively, because we knew we had to grow our store network over time. More in-depth knowledge of local customers proved to be a winner, especially during lockdowns,” she added.
In parallel, Saint Laurent has downsized its wholesale presence, without however shifting to a model based entirely on direct retail. “The wholesale channel is important to us, but our partners must share our values. We also put a halt to all discounted sales, and we switched to Kering’s digital platform,” said Bellettini.
According to Bellettini, who worked at Goldman Sachs, Prada, Helmut Lang, Gucci and Bottega Veneta before joining Saint Laurent, the main challenge for the future relates to talent. “We must succeed in recruiting [talented individuals], but also in keeping them, ensuring that these riches will not thin out as the label grows,” she concluded.
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