Internationalization of Luxury Fashion Companies: a penetration project in Poland for Salvatore Ferragamo

In the previous section there was talk about consumers' perception, expectations and marketing strategies. In the present one it will be analyzed the results of such strategies and declaration of intent. Is customers' anxiety really decreasing? Are companies' advertising strategies working? Those who expect a unique answer to these questions will remain dissatisfied. The results are controversial and usually very different from country to country.
The next figure 10 graphically represent the shift that occurred between 2005/2007 and 2008/2010. In almost every country there was a decrease in sales growth. The only exceptions were represented by developing countries such as Brazil, India and China. Even Russia registered a decrease.

For someone, these data were quite surprising. Until 2007 many luxury companies believed that the power of their brands and the high wealth of their customers was enough to be isolated from the fluctuation typical of other markets. Unfortunately for them, they were wrong.
This "idea was supported by the fact that luxury brand owners had delivered higher sales growth than other consumer companies since the end of the dotcom bust, and that their share prices had tended to hold up when other segments of the market faltered". Nevertheless, "events of the last year have shown that luxury companies are at least as vulnerable as other consumer companies in a recession" (Béguin H., 2009). The only exception is represented by the super-rich category that was previously analyzed.

The decline correspondent to the end of 2007 and the beginning of 2008 was very significant. Moreover, the distance of the Fashion & Luxury Global Index from the MSCI one is not so relevant to sustain the hypothesis that luxury sector if following a very different path from the market's one. Nevertheless, it is possible
2 The .Fashion and Luxury Global Index. tracks the share prices of 60 fashion and luxury companies on 10 different stock exchanges and in different market segments.
to notice that, principally in periods of economic growth, the F&L Global index growths more than the market one.
Of course, the reaction of developed countries was not the same of the developing ones. First of all, despite the higher impact, in terms of percentage, that the economic crisis had, the developing countries increased they share within the global luxury-good market of 5% from 2005 to 2010.

The higher flexibility of the emerging countries brought two main kinds of consequences. On one hand, emerging countries suffered more the effect of the crisis. As figure 13 shows from 2007 to 2008 their growth rate lost around 8-9 percentage points versus the 4 points lost by developed countries. But, on the other hand, their subsequent growth was (and according to the disposal data, will be) faster and greater.

In 2011 the luxury market continued to manifest the signs of recovery showed during the past two years. Companies have to face "more demanding customers, generational shifts, new loyalty rules, an increasingly integrated offline and digital customer experience. […] Growth in emerging markets will remain the focus of luxury manufacturers for the next two to three years. Lifestyle changes have driven a return of luxury goods sales in Russia (5 to 10 percent annual growth). New store openings will fuel growth in the Middle East (10 percent to 12 percent), while Brazil will see heavy investment by international brands (10 percent to 15 percent). China's fast-growing wealth will fuel both same store sales growth and new store openings" (DeMarco, May 2011).

The luxury goods forecast growth is also positive worldwide. Figure 14 gives a very clear representation of the different growth rate from country to country. In particular, beyond the observations that were already done about developing countries, it is interesting to notice that both North America and European markets (with some exceptions) will continue to growth.

So, were luxury goods immune to crisis? The answer that arise from the disposable data, is no. The only products that showed almost no sign of weakness were those dedicated to super-rich consumers (subsection 1.3.1). However, the situation for .normal. luxury goods seems to be quit reassuring, as it will be also demonstrated where the financial data of Salvatore Ferragamo there will be taken into consideration. The company suffered the recent economic crisis (in 2009 recorded a decrease in revenue) but consistently with trends of the sector previously highlighted, showed great capacity of recovery. Indeed, demand for luxury products increases more than proportionally as income increases. Oscar Wilde once said, .We live in an age when unnecessary things are our only necessities.. He was definitely right.