Andrea Panconesi’s independent thinking has kept Luisa Via Roma at the vanguard of luxury fashion since 1968.
Andrea Panconesi is up to something. But then you’d expect nothing less from the man who has spearheaded one of the most progressive independent fashion retailers in the world for over 40 years. Luisa Via Roma is seemingly chiselled out of Florence’s famous stone and rises monumentally from the street that gives the store its name. It could easily be considered as old as the Tuscan hills that surround the city. Yet when I meet the retailer’s chief executive in the swish cafe of his multi-level, hyper-modern concrete, glass and steel 5,166 sq ft store, his mindset is very much in the future as he tries to explain what he sees as the next major innovation in fashion.
“It’s an exciting time in which we are living,” he enthuses, “and the future will be even more connected between the physical experience and the virtual experience. My dream is to have them like two parallel lines that will never meet but will get closer and closer.”
This isn’t a case of simply treading the already well-worn path of omnichannel streamlining - details are sketchy at this stage, but Panconesi suggests a shift to a type of mind-bending virtual fashion reality is maybe only “10, 20 years away” from fruition. It is a far cry from the store’s origins over eight decades ago, when Luisa Jaquin and Lido Panconesi, Andrea’s aunt and uncle, opened Luisa Via Roma selling hats to well-to-do Florentine ladies. But then Panconesi junior has always been a bit of a maverick. After all, it was he who in 1968, after hearing about a Japanese womenswear designer who had a particular talent for the avant-garde, took a punt on him and in doing so became the first European stockist of Kenzo.
Peter Martin, vice president of the fashion group at Adidas, agrees. “From the start, Luisa Via Roma was always a step ahead, from the collections it chose to the designers and brands it collaborates with,” he says. “As a retailer it is also leading in interpreting market trends and as such continuously evolving its business model.”
Panconesi’s bullish attitude was to change this business model dramatically in 1999. At that time Google was at beta stage, the iPod hadn’t been invented, Facebook was five years away from being launched and your computer made a funny whistling noise when it dialled up the web. And yet Panconesi decided he would start to sell luxury fashion on the internet via Luisaviaroma.com.
“We started [ecommerce] because our clients were visiting us once a year because Florence is a tourist hub,” Panconesi recalls. “So in order for them to visit us all year round we started the ecommerce site, which was accessible to clients who had previously visited us in the store. Before it was just a service - now it’s like a window on the world.”
At the time some of Panconesi’s designer friends dismissed the concept of ecommerce out of hand, arguing that their customers needed to touch and interact with the clothes. “Now they are following me and some of them have missed the train,” he adds. From his comfy position at the head of that locomotive, Panconesi can afford to be confident. For a company of its size - turnover for 2012 was €66m (£58m), up 46% year on year, while profit for the same period was €6m (£5.2m), a 77% increase - the stats are impressive.
In the past four years (the time Panconesi highlights as when technology had advanced sufficiently to allow ecommerce to really take off), unique visitors to the website have increased sevenfold to 30 million in 2012,
with that figure on track to increase to 35 million for 2013. Similarly, traffic has increased 44% year on year and conversions are up 60%, while the mind-boggling number of 166.7 million page views already this year goes to show how Panconesi has taken a humble hat shop in Florence out to a global luxury customer.
Eric Fergusson, head of retail services at ecommerce platform provider Ecommera, thinks the secret to the business’s success lies in its track record. “It comes from a heritage of store retail which enabled it to launch online with a strong brand mix. Few of its rivals had this heritage,” he explains.
Panconesi agrees: “That’s why we’ve grown so quickly, because of the experience we have from the last 30 years in the store.” It would be all too easy to put this strong growth simply down to the rise of ecommerce, which Panconesi says makes up “90% to 95% of the business”, overshadowing the physical store. But Panconesi is keen to point out that one couldn’t exist without the other.
“We cannot all of a sudden live virtually.
I was very clear when we started this ‘experiment’ four or five years ago we had to make sure you get some virtual experience in the physical store,” he says, talking about the integration of the touchscreens on the shop floor that allow customers to see and purchase all the stock Luisa Via Roma carries.
“One could not exist without the other. You have to jump into the new technology - you have to be innovating.” Panconesi’s intuitive and pioneering approach seems to be paying off, but is there method to his madness?
“Nothing was planned, even the ecommerce. Everything came by chance, by luck. I’m the first one to be surprised by our growth,” he says. I sense the sincerity in his voice but his modesty belies the way he has approached the task of nurturing the business.
Luisa Via Roma is 100% privately owned - “we don’t need to go public” - which Panconesi says allows them to move quickly as “we can make a decision and in 24 hours we can see the result without meetings in between. We decide, we do it. Now whatever I imagine at night is there the next day online.” The way he has structured the team gives Panconesi this flexibility - when setting up the website in 1999, he had to source all the technology expertise and logistics which was incredibly difficult at this embryonic time in the history of ecommerce, but bringing it in-house was ultimately beneficial.
Those specialists and buyers now make up 85% of a team that has grown from 20 people five years ago to more than 200 now, with the rest comprising 30 store staff. Panconesi has final sign-off on every order and sits cheek-by-jowl with the team that never buys something they don’t like, his enthusiasm for the nitty gritty still burning brightly all these years later. He particularly lights up when talking about how “Saint Pitti”, as he calls the Pitti Uomo trade show and its stablemates, allows him to get the jump on other luxury retailers both in the Florentine micro-market and on a global stage.
“The fashion world comes to the fair and the designers want us to display their new collections [at that time],” Panconesi explains.
In practice this means in the blistering heat of June the windows of Luisa Via Roma, which Robert Lunardon, Diesel Black Gold general manager, describes as “an international company with an Italian soul”, are full of cosy autumn collections from the likes of bestsellers Dolce & Gabbana, Givenchy, Lanvin and Balmain and in chilly January the new spring styles are displayed. Panconesi claims this is the first time anywhere in the world these collections will be available, but does this affect the store’s sales?
“People don’t buy because of the weather, they buy for pleasure, excitement and passion. It’s emotional more than physical,” he says. Panconesi’s client base is truly global - he says Europe, the US and Canada and the Far East each comprise a third of the business and they are “pretty well balanced”. They buy more or less the same products, whether that’s a £2,500 Jil Sander leather jacket or a £95 Burberry wallet. “Our clients travel, they have an international view - whether you are in Russia, China or the US you speak the same fashion language,” he explains.
Growth areas such as South America, Africa and India still elude the global spread of Luisa Via Roma’s influence because Panconesi says the lack of local infrastructure doesn’t allow the retailer to reach people, but he maintains “it will take a while but it’s very big so we will get there.”
It seems no matter whether it’s the virtual world or the real, Panconesi will be exploring new frontiers for Luisa Via Roma in the years to come.