Zilli, a pioneering boutique in Rusia

Zilli is a French brand «Prêt-a-porter» recognized for their coats and leather and cashmere jackets has 340 employees, including 100 in Italy and 180 in France: 81% of the production is in its workshop in Lyon. In 2013, the brand was already present in 23 countries worldwide with 64 own boutiques and various multibrand stores. Pioneer in Russia after the fall of communism, opened its first boutique there in 1991. In Spain the company has a store in Marbella, a popular spot among Russian tourists.

In 2006, the company received the award from the hands of the then Trade Minister Christine Lagarde, as the leading French company exporting to Russia. It has been more clothing firms admired by Russia’s new wealthy class more, for example one of its crocodile leather jackets, priced at about 100,000 euros, or its highly valued cashmere jackets. Manufacturing takes place in France in their workshops in Lyon and Italy (particularly in Milan).

Difficult geopolitical situation
However, the difficult geopolitical situation of the countries of the CIS (former USSR) have made that company has to restructure after from having superior sales to 90 million euros in 2013 , they have decreased to 60 million billed last year. The devaluation of the ruble, falling living standards in Russia and satellite countries as well as the sanctions taken both by the EU and by the US have noted seriously in turnover and results of companies like Zilli.

The fall of tourism in the French capital, becouse of various terrorist attacks, has also affected sales of its flagship store in Paris. The brand employs 180 people in France plans to cut jobs, mostly in their workshops Lyon, where the company has its headquarters. Weakened since early 2014 by the geopolitical events in the countries of the CIS (former Soviet Union), where he was holding more than 50% of sales, in the plans of the company try to sell part of their real estate to reduce debt.

Strategy to overcome the current situation
In this context of economic slowdown in their main markets, the company seeks to reduce costs by up to one million euros, for which you may have to reduce its workforce by 36 employees. On the other hand seeks a commercial consolidation in major Russian cities and it has signed a distribution agreement with Mercure Group, with which they hope, within three years, opening new stores and strengthen its presence, especially in Moscow. Among his plans he is to launch soon launch soon an online store that will open in 2017 (estimated).

«We will hold the impact of the crisis, and banks are being responsive about it,» acknowledged Alain Schimel, group president at a press conference last week. In the emergency plan, whose implementation is expected in early October, Alain Schimel expects a reduction in expenditure of one million euros. Moreover, the group Zilli continue to sell some of its assets.

«Fifty years ago we had the opportunity to invest in stores and workshops in France and Italy. And today we are forced to sell some of them» he confirmed. Of the 64 stores it teaches worldwide, the company still has 12 live, but the number should be reduced to eight. So far they want to keep the flagship store on rue François 1 in Paris, and those of Monaco, London, Milan and New York.

The market for CIS countries accounted for over 70% of total group turnover by 2013. However, since September 2014, Zilli has suffered a 40% decline in sales there. «In the 90s, since these countries opened their economies, we almost left, for example,  the American market to focus on the former USSR. The high quality of our products is consistent with the high demand of the wealthiest Russian class and now stuck by developments in Russia» said the group’s president. A bet that certain to be positive as economic activity recovers in Russia.

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