Why luxury brands are teaming up to acquire stakes in their suppliers
The trend has accelerated since the pandemic. “After Covid-19, some of these manufacturers didn’t recover and some of them are going under. These are opportunities, and targets, for other brands or competitors to buy them,” says Stellae’s Daguillard. He adds that suppliers are attempting to modernise and remain competitive, including through the use of AI and robotics, and scaling teams — all of which requires investment.
Luxury fashion supply chain consultant Dorcas Payne agrees, adding: “These manufacturers don’t get much investment or attention. They’ve constantly got to look for new clients and find ways to keep themselves afloat.”
More pros than cons
There are a number of upsides to brands using their combined firepower to acquire significant stakes in their suppliers. The deals will give each company a cost advantage and greater control over their supply timelines and processes. With the investment from Prada and Zegna, Luigi Fedeli