Miroglio SpA

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Miroglio SpA

Via S. Barbara 11
Alba (Cn), 12051
Italy
Telephone: (39 0173) 299 933
Fax: (39 0173) 299 573
Web site: http://www.miroglio.com

Public Company
Incorporated: 1884; 1947 as Miroglio
Employees: 3,800
Sales: EUR 1 billion ($1.2 billion) (2006)
Stock Exchanges: Milan
NAIC: 313210 Broadwoven Fabric Mills; 313111 Yarn Spinning Mills; 315222 Men’s and Boys’ Cut and Sew Suit, Coat, and Overcoat Manufacturing; 315233 Women’s and Girls’ Cut and Sew Dress Manufacturing

Miroglio SpA is one of Italy’s leading vertically integrated fashion and textiles companies. Based in Alba, in northern Italy, Miroglio operates through three primary divisions. The Garments Division is represented by Vestebene, which oversees the group’s stable of ready-to-wear brands and retail stores. Company brands include Caractere, Motivi, the plus-size fashions of Elena Miro, Mytime, Dream, Sym, Oltre, and Diana Gellesi. In addition to distributing its brands to other retails, Miroglio’s retail network includes more than 1,130 stores throughout Italy, but also in a number of international markets, including Eastern and Central Europe, China, India, and elsewhere.

Miroglio’s Textiles division includes its textiles production facilities in Italy and Bulgaria; as well as outsourced production from China, India, Turkey, and other low-cost producers. Miroglio produces a range of fabrics, including wool, plain fabrics, and gray fabrics. The company is one of the world’s leading producers of transfer papers for the textiles industry.

Miroglio’s Spinning Division produces synthetic yarns, including polyester filament yarns, for the international market. Although a public company, Miroglio remains under the control of the founding Miroglio family. In October 2006 the company appointed four members to its board of directors from outside of the Miroglio family for the first time in its history. With nearly 4,000 employees, Miroglio’s sales topped EUR 1 billion ($1.2 billion) in 2006.

FOUNDING A TEXTILES GIANT IN 1947

The Miroglio family’s involvement in the textiles market stemmed from the late 19th century, when Carlo Miroglio established a small business peddling textiles and other goods in Alba, in the Piedmont region of northern Italy, in 1884. In 1900, the Miroglios opened their own fabric store in Alba, and later opened a new store on the city’s Piazza Duomo. The Miroglios were joined in the family business by their six sons; among them was Giuseppe Miroglio, who would lead the family into textile manufacturing. Giuseppe’s first direction in this area came in 1934, when he bought a stock of cocoons and transformed them into silk yarn. At that time, Miroglio opened his own textiles warehouse.

Following World War II, Miroglio decided to expand into fabric manufacturing. In 1947 Miroglio bought four looms, which were installed in the Alba warehouse. Miroglio’s operation was aided by the reputation of the Italian textiles industry, which enjoyed global recognition for the quality of its fabrics and textile designs. By 1950, Miroglio was able to build a purpose-build factory dedicated to textiles production. Meanwhile, Miroglio continued the family’s retail tradition, opening his own store in the Alba city center.

While still based on the use of manual looms, Miroglio’s factory was quickly successful. The company’s rapid growth enabled it to expand its factory, doubling its production space. In 1958, the company switched over to the use of automated looms, installing 250 new automatic looms. That number grew steadily, and by 1962, Miroglio boasted more than 450 automatic looms.

By then, Miroglio had begun its move toward building a vertically integrated operation—and transforming itself into one of Italy’s largest textiles companies. The company’s next step came in 1957 when it built a dyeing and print plant. In this way, the company achieved in-house control over the complete textiles production process, from weaving to dyeing and printing.

The company’s next move took it beyond textiles and into clothing manufacture. The Italian clothing market of the 1950s remained traditionally oriented toward tailor-made garments, with ready-to-wear clothing accounting for just 10 percent of the market. This compared to the United States, where some ready-to-wear represented 80 percent of the clothing market. Giuseppe Miroglio—then aged 70—correctly guessed that the American model would soon prevail in the Italian clothing market. In 1955, Miroglio created a new subsidiary, Vestebene (literally “nice clothes” in Italian), and built a factory dedicated to the production of ready-to-wear garments. At the beginning, Miroglio’s garment focus was clearly on the women’s clothing market, and the company’s first design was a women’s dress, which sold for just ITL 1,000.

The growth of Vestebene, which later grew into the company’s Garment division, provided a strong outlet for the company’s fabric production as well, and by the early 1970s the company had expanded again, moving its manufacturing plant to new and larger production facilities. Part of the company’s success during this period came from its early adoption of new synthetic fabrics, and especially polyester fabrics. The company became the first in Italy to begin producing polyester fabrics in 1960.

Into the 1970s, the company was taken over by Giuseppe Miroglio’s sons Carlo and Franco Miroglio. The new generation steered the company onto the international market starting in 1972, becoming an early adopter of outsourced production methods. As part of this effort, the company made a series of acquisitions outside of Italy, adding production capacity for both textiles and completed garments. At the same time, the company also expanded capacity through the construction of new plants, both in Italy and abroad.

VERTICALLY INTEGRATING FOR THE EIGHTIES

Miroglio continued to seek new areas of operations, and especially those that would enable it to complete its vertical integration strategy. This led the company into the development of its own spun yarn production, starting with the installation of a spinning machine at its factory in Saluzzo, in 1974. From the start, the company’s yarn production specialized in synthetic materials, and especially polyester yarns. The company continued to build its yarn production technologies, adding texturizing systems at the Saluzzo plant starting in 1976. This was followed by the construction of a spinning tower at the Saluzzo plant as well, completed in 1980. By then, Miroglio had taken its vertical integration approach a step further, launching a factory for the production of looms in Tunis, in 1979.

COMPANY PERSPECTIVES

Our mission is to be the number one Italian Group in fashion, capable of fulfilling every woman’s desire on any occasion. Wherever. And to create and distribute a fashion product that is always innovative, reliable and competitive to the delight and gratification of every woman.

Another fast-growing segment of Miroglio’s operation was its fabric printing materials business. This was created in 1975 as Sublitex, producing printed materials that allowed the transfer of designs to fabric. Starting with just two printing presses, Sublitex grew strongly over the next decades, adding six more presses to its production plant. The Sublitex launch was accompanied by Miroglio’s entry into the U.S. market, through the creation of Miroglio USA in New York in 1975. The rising demand for printed fabrics, coupled with the global reputation for Italian fabric designs, enabled Sublitex to grow into a world leader in its market.

The strong growth of the printing division encouraged the company to invest in its expansion at the beginning of the 1980s, with the construction of its Govone Printing Division in 1980. This facility, which was later expanded to more than 50,000 square meters, became one of Europe’s biggest fabric printing plants, with an annual production of more than 28,000,000 meters.

Miroglio continued to make steady investments into the 1990s and beyond. In 1985 the company launched construction of a new circular loom plant in Novello, Italy. By the end of the 1990s, that facility had been completed with its own semiautomated warehouse. Similarly, the company built a new automatic cylinder warehouse in 1990, which was capable of stocking some 17,000 cylinders and streamlined delivery to the company’s manufacturing and other operations. By the mid-1990s, Miroglio had added another loom factory, with a production space of 11,000 square meters, in Ginosa.

The increased yarn production capacity enabled the company to expand its yarn operations, which originally had only supplied the company’s own textile and garment production, into the larger textiles market. By the end of the century, sales outside of the company amounted to 85 percent of its total yarn production.

ITALIAN LEADER IN 1993

By the end of the 1980s, Miroglio had established itself as one of Italy’s leading textiles and clothing groups. By the start of the new decade, the company’s sales had topped ITL 1 trillion ($650 million). The group’s strong investments in its vertical integration strategy had paid off, with its sales roughly split between its textiles and clothing divisions. By then, too, Miroglio had successfully developed a number of strong brands, both in Italy and internationally, including longtime flagship Motivi, as well as a number of others, such as Fiorella Rubino and C’est comme Ca, which, along with Motivi, entered the United States in the early 1990s.

Meantime, the company continued seeking acquisitions to boost its international operations. Among these was the purchase of Ulmia Stoffe, based in Ravensburg, Germany, acquired in 1989. Founded in 1839 as a bleaching and finishing factory, Ulmia later focused on the women’s outerwear market, while also producing men’s shirts. By the beginning of the next decade, the company’s international production network spanned Italy, France, Germany, Greece, Tunisia, and Egypt.

During the late 1980s and into the 1990s, Miroglio made its first effort to begin producing clothing for other labels. An example of this was its agreement to produce large-size garments for Krizia SpA’s Per Te clothing line, starting in 1989. Nonetheless, the company’s preference remained for its development of its own brands and designs.

This appeared to change, however, in 1993, when the company announced its intention to acquire troubled rival Gruppo GFT. That company, which focused on producing clothing for the luxury and designer label market, had fallen into financial difficulties during the recession at the beginning of the decade. Among GFT’s clients were such high-profile labels as Giorgio Armani, Valentino, Emanuel Ungaro, Claude Montana, Christian Dior, and Calvin Klein. The deal was set to boost Miroglio as Italy’s second largest garment producer, trailing only global success Benetton. In the end, however, the deal fell through, in part became the two companies were judged to be too dissimilar— with GFT’s design focus said to clash with Miroglio’s preference for in-house labels.

KEY DATES

1884:: Carolo Miroglio and wife enter business peddling textiles and other goods in Alba, Italy.
1900:: The Miroglios open their first shop in Alba.
1934:: Giuseppe Miroglio opens warehouses and begins producing silk yarn.
1947:: Giuseppe Miroglio buys four looms and launches fabric production.
1955:: Vestebene clothing production is launched.
1972:: Miroglio launches international operations and begins production of polyester yarn.
1993:: Company acquires RTW operations of Yves Rocher and opens its first Motivi retail stores.
1999:: Production operations are expanded into Bulgaria.
2004:: A joint venture to enter Chinese market is established.
2006:: First retail store in Shanghai debuts.

Miroglio’s ambitions were satisfied, however, by the 1993 purchase of the ready-to-wear division of design house Yves Rocher. That purchase, priced at more than $10 million, gave Miroglio control of Sym, which marketed its own branded clothing, and Claverie, which produced clothing under the Essentiel and Jean Chancel labels. That purchase helped boost Miroglio’s sales past ITL 2.6 trillion ($740 million), placing it at the lead of the Italian market.

RETAILING AND OUTSOURCING IN THE NEW CENTURY

The start of the 1990s, however, saw Miroglio begin its transition into the next century. A new trend in the international textiles and clothing market had begun to emerge by then, in which the former retailing model— based on small stores that stocked a variety of labels— had begun to give way to a new label-based model. Increasingly, a new breed of label-specific retail format had begun to acquire market share, and the period was marked by the emergence of a number of large-scale, internationally operating clothing retailers. The new retailing format, including self-standing stores as well as in-store boutiques, sought as much to reinforce a brand image as to sell apparel.

Miroglio dipped its own toe in these new retail waters in the early 1990s, setting up its first Motivi-branded retail stores in Italy. While the company owned a number of these store, it also developed its own franchise formula, encouraging the chain’s strong growth. The strategy worked: by 1996, the company operated 20 Motivi stores in Italy, and by 1997 the company’s network counted more than 50 stores. Over the next decade, Miroglio’s retail operations expanded exponentially, expanding across Italy and also into the international market. By the middle of the first decade of the 2000s the company’s store network had topped 1,000 stores. At the same time, the company had developed a number of new retail formats and brands, including Caractere, Elena Miro, Mytime, Dream, Sym, Oltre, and Diana Gellesi.

The shift into retail operations provided Miroglio with the buffer it needed in order to adapt to another new factor in the global clothing industry, that of a shift of the worldwide garment production base to the fast-growing Asian markets. Attracted by the low-wages available in China and other Asian markets, where workers were paid far less than their Western counterparts, a great many clothing brands abandoned their own manufacturing operations. Meanwhile, as inexpensive Asian garments began to flood the retail market in the West, clothing retailers were forced to scramble to react.

Miroglio at first reacted by enhancing its own production in lower cost markets, building a new factory in the south of Italy. In 1999, the company turned first to Bulgaria, buying a wool mill in Sliven. The company continued to invest in that market, adding a printing plant in Elin Pelin, then a spinning plant in Nova Zagora the following year. By 2001, Miroglio’s Bulgarian operations also boasted a loom factory in Sliven.

Yet Miroglio increasingly turned to Asian manufacturers, and particularly Chinese producers for its production needs into the mid-first decade of the 2000s. At the same time, the company sought entry into the Chinese market itself. In 2004, the company accomplished this through the creation of a joint venture, Chinese Company Elegant Prosper Fashion Co., which began producing and marketing clothing under the Elegant Prosper and Elena Miro brand names for the Chinese market. By 2006, Miroglio had also targeted China for expansion of its retail operations. In December of that year, the company opened the first of a projected 100 stores, in Shanghai’s Raffles City Shopping Mall. As one of Italy’s leading textiles groups, Miroglio appeared to be weaving a strong fabric for its future.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

Miroglio Bulgaria; Miroglio Tessile SpA; Sublitex SpA; Ulmia Stoffe GmbH (Germany); Vestebene Miroglio SpA; Miroglio Textiles USA Inc.

PRINCIPAL DIVISIONS

Spinning; Garments; Textiles.

PRINCIPAL COMPETITORS

Cantoni ITC SpA; Giorgio Armani SpA; Salvatore Ferragamo Italia SpA; Mariella Burani Fashion Group; Max Mara S.R.L.; Marzotto SpA; Gianni Versace SpA; Stefanel SpA; Teddy SpA.