On July 25th, the Italian financial newspaper Il Sole 24 Ore published an interview with Alessandro Bracci, CEO of Gruppo Teddy, commenting the results achieved by the corporate group in 2018.
“Teddy turns profit into jobs”
By Giulia Crivelli, Il Sole 24 Ore 25/07/2019
2018 turnover is in line with that of 2017. However, Alessandro Bracci, Teddy CEO, is not upset by one year of slowdown, which goes against the logic of “growth, growth, growth at any cost”. And he is not for two reasons: first, figures are still remarkable, 642-million-Euros turnover (650 at constant exchange rates), among the highest in the Italian fast fashion industry. Secondly, Ebitda in 2018 was equal to 77.2 million Euros, 12% on the turnover, which is almost the same figure registered in 2017. There is a third reason that makes Bracci satisfied with the results: earnings in Italy (which account for almost half of the total number of sales) increased by 9.3%, up to 336.9 million Euros.
In 2018, you invested almost 35 million Euros. In which areas?
We focused on our sales network and marketing strategies, brick-‘n-mortar and digital ones, and logistics. And also on training, which means on the growth of people. In the last 30 years, from 1988 to 2018, Teddy CAGR was 15.7%. I think it’s time to rethink the concept of growth. We will keep on investing much money, but on transformation.
Many companies and people are scared by the very fast social and economic changes affecting today’s markets. It seems you are not scared by them.
The digital revolution started more than 20 years ago, since 2000 there have been signs of deep changes: just think about Amazon, who was founded in those years. I agree that in the latest years things have speeded up, and with regard to consumption, e-commerce deeply affected distribution models. However, you cannot fight against those changes. The new scenario and tools we have today thanks to technology have to be regarded as an opportunity. Among all the industries, fashion is the one that cannot be scared by ongoing evolution. We have always been experiencing changes, it’s our way of being.
What changes is the clothing industry facing, besides those imposed by the Internet?
Italy and other countries among the 90 ones we operate in are facing a population decline. If on the one side this is a case of serious concern, on the other side Teddy cannot solve this problem. Nonetheless, as a corporate group and together with all our brands, Terranova, Rinascimento Calliope and Miss Miss, we can analyse the new needs of people aged over 65 for example. A 70-year-old today, man or woman, does not wear in the same way my mother or father did. There are also the new consumers, for example first or second-generation immigrants: their culture of origin often affects their tastes and shopping choices. We have to pay attention to those needs and find the right solutions without making our products or brands lose their own identity.
Your goal has always been to listen to your customers. Does technology help you to do it?
It helps a lot: the goal is not to be pushy, but to use email and social media that allow us to stay in direct contact with customers, before and after shopping. We want to be on the same level as theirs. And even to ask them, humbly and frankly, what our strengths are, what satisfied them most when purchasing our products, both online and in store, and what left them disappointed, with reference to our services or product range. Feedbacks were extremely useful. The goal of a brand, in a crowded and competitive market like fast fashion, is to win customers’ trust, always focusing ourselves on transparency and acknowledging mistakes, when needed. My father used to say, “You remember truth more than lies”.
Teddy father, its founder Vittorio Tadei, always said that the goal of the company was to earn enough money to create jobs and invest in social activities, in Italy and abroad. How did you manage to fulfil this “early” sustainability dream?
Between 2008 and 2017, employment increased by 314% and even in our last financial year we invested 4% of our profits in corporate welfare. We have an in-house nursery, which is also open to kids whose parents do not work at Teddy, and support some social projects in our region, Emilia Romagna, as well as abroad. Such as the Rainbow Project, which over the years has helped to build villages and schools in Zambia.