The Riviera del Brenta footwear district
The district developed at the beginning of the 20th century after the first company was set up by an entrepreneur that merged technical and commercial knowledge acquired during his stay in the United States with craftsmanship skills available in the area (Fontana et al., 1998). During the 1950s and 1960s, the number of firms and production boomed, thanks to the growth in export markets. In the mid- 1970s, Riviera del Brenta firms gradually improved the quality of their product; luxury shoes for women became the main product offered, while production was carried out by independent SMEs rather than centralized within companies. The major clients were Italian and increasingly German retailers.
From the mid-1990s, the district entered into a deep transformation in terms of the role of its final product companies. On the one hand, lower value-added activities were increasingly outsourced to Eastern Europe (see also Amighini and Rabellotti, 2006) or carried out by immigrant entrepreneurs, especially the most labour-intensive activities related to the manu- factoring of components (e.g. upper shoes). In the 2000s, production of lower-end products (such as everyday shoes) moved to the same locations or closed (e.g. Donna Carolina, Cal- zaturificio Ca’ D’Oro). Some district entrepreneurs subsequently moved to Romania, Serbia and China to teach shoe-making to local companies.
On the other hand, local companies that specialized in the production of high-end shoes gradually gave up their own brands to produce for global brands such as Kering Group, LVMH, Prada and Armani. While these GVC leaders are responsible for the design, marketing and distribution of the final products, local firms cooperate on the development of the products and are responsible for prototyping and carrying out the final steps required for manufacturing luxury footwear. Thus, they could be defined as OEM suppliers, who can also perform activities similar to oDMs. In order to accommodate these global brands, the local firms heavily invested in upgrading their processes in order to ensure they could produce at the requisite scale or to deal with certifications required by the brands. Although the largest and most successful OEMs tended to be vertically integrated, other district OEMs worked with a limited number of local and, to a lesser extent, foreign suppliers.
According to a survey by Rabellotti (2004), in the mid-2000s half of the firms investigated worked only as OEMs for global brands; recent interviews indicate that 90% of the district’s production is now carried out for global brands. In addition to the “simple” OEMs, which often work for several brands at a time, there are other approaches: a few OEMs pursue a “hybrid strategy” with a small fraction of turnover from their own brand (such as Ballin shoes); super-luxury, established OBMs (such as Rene Caovilla); and a growing number of small OBMs specialized in different products (e.g. fashion, high-end sneakers for women, like Philippe Model).
In an initial phase, GLFs entered the district developing long-term relationships with local firms. In the mid-2000s, however, they shifted to broader investment strategies that included vertical integration, whereby they acquired their major local suppliers, as well as greenfield investments, which has been the most popular strategy in recent years (see also Chapter 5 by Belussi et al.).14 Such global companies are now the largest enterprises in the ID in term of employment and turnover; concentration is modest but increasing.
The number of active firms in Riviera del Brenta has been relatively stable (a mild decline of 2.4% between 2004 and 2014), as lower-end production was gradually abandoned and many companies proved unable to work with GLFs (either because they were too small or not capable of keeping pace with their production requirements). All in all, however, interviews and turnover figures (+17.6% between 2008-14) support the finding that, despite the huge transformation that took place in the ID during the last 20 years, the Riviera de Brenta district is still performing well, and its integration with global brands, while challenging, is perceived more as a strong asset than a threat. Concentration remains quite limited (Table 3.2).
The local industry association (ACRIB, developed in the 1960s) is still playing an active role within the ID, both providing technical knowledge (via the “politecnico calzaturiero” school), supporting the internationalization of SMEs (via the “Consorzio Maestri Calzatu- rieri”), and ensuring that the high-value-added competences of the ID are maintained and preserved.15 The role of local unions has proved to be supportive as well (see also Azzariti and Candoni, 2007; De Stefani, 2012).