L’industria della moda e la gestione dell’incertezza – Enrico Moretti Polegato

Well, the transaction was very interesting since we tried and were able to work not only on a brand but on a piece of the sports history in Italy. We started some time ago when we were asked to participate in the relaunch of Diadora. At the time, Diadora was experiencing a tough period from the financial and economic point of view, a historical brand that is celebrating its 72nd anniversary this year and that in the past years has been represented by many important sportsmen. When we were asked to participate in this relaunch operation, I believed it could be a great transaction under three points of view. First, from the point of view of the old national local pride, because it was not beautiful that such a historical, much beloved, and meaningful brand like Diadora went bankrupt. Second, from a strategic entrepreneurial point of view, we could see that Diadora as a company was more finding it difficult to survive than the Diadora brand. Third, from a professional personal point of view, I would have had the occasion to have my own entrepreneurial experience, my own team, and challenge without always being in my family company, where, in jokes, I was only the boss's son. Well, the first goals we had set were widely exceeded. We wanted the company to be strong again from the economic, financial, and commercial point of view, and we wanted the brand to be visible again talking the own language of inclusive Italian sport. We are happy with the results.

Yes, that has brought the results I was striving to, both in terms of personal goals and company goals. Apart from that, we have a company whose case history is unique in the world, so I haven't abandoned one aspect but I've gone to a different destination and I proved right.

In 2019, sales reached 168 million euro with the exclusion of licensed products due to brand extensions or geographical exemptions, so the HQ is 168 million euro. And we have restarted producing profits from the very first year we got its management, and this profit and cash generation actually went on throughout all the years including 2019.

The year is clearly quite tough. I mean, the observatory we have in here with all the data we collect day after day, we believe results might be better than what we could think in March-April when the world started to tremble under the COVID-19 pandemic. What is positive is that such improvement from both the economic and the financial points of view is driven either well by market sectors we had pointed to, because those were those that better identified Diadora's identity, and by market segments where we have a direct contact to consumers. Hence a positive feedback comes from the very people who wear and use our own items. In the first group of assets, I am specifically referring to running. We have said Diadora is basically a sports company, and this means that the marketing identity of such product must be sports in se. When we decided to reaffirm Diadora in the sports world but also in the active sports field, we decided to do that through running, and now results are coming in. Even though we are in quite a tough year, running is growing, is expected to grow even in quite complex markets like those in the US. For two years now we've established a commercial branch in the US mainly focused on developing the sales of upper tier running shoes, and this is bringing in very positive results. When we started, that was a real bet because selling running shoes in the US was like going to Greenland and sell fridges. But for sure this mix of Italian style, historical identity, technological research, and performance investments have produced a product mix which is appreciated in the US.

Well, that depends on the markets and on the product categories. If we talk about running, Diadora has started seriously talking about running with the new management, so yes there was an authentic brand area, but authenticity in the running field was built by ourselves in the latest years. It is different instead if we talk about the attachment an Italian person can have towards a much beloved Italian felt brand, and our heritage line for instance which has products and running shoes that repropose the historical models of Diadora, and that's the very result of our line.

Well, most of the heritage collection is manufactured in Italy. As a matter of fact, the relationship between Diadora and Italy is much more rooted than the accidents of mere heritage collection, because this Italian style, Italian spirit is for sure one of the building blocks of the Diadora brand. At the beginning we had interpreted our own being Italian particularly as Italian design, being able to work products online in the clothing and the footwear fields where Italy is acknowledged as a leader in the design field. But then we wanted to invest more on this Italian identity of ours, and we started a new process bringing back to Italy those productions that had been delocalized in the previous years. The focus of this returning project: we have reopened a historical brand which we have actually taken in here in San Marco, in Belluno, where we are realizing the top tier of the top tiers.

Well, this is not a decision we have made in these last few months. Our company is made up by mostly millennials, so our DNA includes this attention, this being keen on the digital world not only from the commercial point of view but also as regards communication and the own corporate management. For sure, during the lockdown, during the pandemic, our online distribution with both independent retailers and through our own website enjoyed an acceleration.

E-commerce as a whole accounts for about five to eight percent of our own sales, while we have no chain of retail stores in brick-and-mortar terms. We do not have mono-brand Diadora stores. Well, we have a few in our own country, but they are not part of our development strategies for the company.

Well, we have accelerated a lot on these projects. First, because sustainability is part of my own identity as a human being well before of my identity as an entrepreneur. Because my own dwelling was the first civil use building to obtain the sustainability certification. So a company, I and all our collaborators are aged around 30, we are in a generation which is fully aware of the need of a different approach to these things. So we pay much attention to sustainability. Our office, we also have a sustainability office and they have set up a sustainability plan with the rest of the management which is updated year after year. Activities actually take place along three main channels: control over the supply chain, product innovation, and corporate activities. Supply chain control takes place through a certification we will require and demand to all our suppliers with EcoVadis certification entity, which is one of the biggest in this sector (they are French). And all our suppliers are actually audited by EcoVadis and they are audited by other independent entities. Diadora's HQ organized this audit. We gained our Platinum certification for sustainability. This means that our HQ is in the top five percent of the sustainability performance in our own sector. As regards product innovation instead, we started some sustainability projects. Therefore, as for all packaging products, our t-shirts are all manufactured in order: 100% certified cotton. Which is not only means that cotton is organic, but the certification covers the whole chain. We have decided to eliminate kangaroo leather from our own footwear. The boxes of our energy line, for instance, are in Alka paper, that is material realized from exceeding algae from the seas, and we have quite a lot in the Venice lagoon. So several projects. And then the whole corporate part, the activities in our HQ that pay attention to sustainability, from things that might look trivial like energy efficiency of our HQ – we have solar panels that are enough to work the internal line I was talking about before, thanks to green renewable energies. Or we also have agreements in place with some local entities like Parco Natura Viva in Verona. We have a footwear line dedicated to endangered species, and the profits are devoted to a park here near Belluno. But we also have an agreement with the Shimon Peres association he founded, this interactive center in Tel Aviv, and we are sponsoring their activities because sport is for sure a way to dialogue, to stay together, and maybe this is also a first step towards mutual understanding. We organize activities. Last year we organized a football match with mixed teams of Palestinian and Jewish children. That was a beautiful moment because after the match there was a party where everyone participated, they were all together. We hope this can be worth it.

That was not in line with our sustainability policy. The boxes of our energy line, for instance, are in Alka paper, a material realized from exceeding algae from the seas, and we have quite a lot in the Venice lagoon.

And then the whole corporate part, the activities in our HQ that pay attention to sustainability, from things that might look trivial like energy efficiency of our HQ – we have solar panels that are enough to work the internal line I was talking about before, thanks to green renewable energies. Or we also have agreements in place with some local entities like Parco Natura Viva in Verona. We have a footwear line dedicated to endangered species, and the profits are devoted to a park here near Belluno. But we also have an agreement with the Shimon Peres association he founded, this interactive center in Tel Aviv, and we are sponsoring their activities because sport is for sure a way to dialogue, to stay together, and maybe this is also a first step towards mutual understanding. We organize activities. Last year we organized a football match with mixed teams of Palestinian and Jewish children. That was a beautiful moment because after the match there was a party where everyone participated, they were all together. We hope this can be worth it.