Twilight In Italy

What happens when a traditional European industry faces Asian competition? A crisis. Welcome to Manzano, Italy's chair capital

  • Share
  • Read Later

Manzano's giant 23-ton chair is a reminder of the town's more prosperous times

(4 of 5)

How can the Italians fight back? Alessandro Calligaris has a blunt answer: "We have to win the loyalty of our customers." He is 60, with a fuzz of white hair and a reputation as the most successful businessman in the chair triangle. His company, the namesake Calligaris, was started by his grandfather in 1923 and is still growing. Revenues last year rose 12%, to $140 million. His first big insight, more than a decade ago, was to figure out that the future lay beyond chairs. The Calligaris furnishing collection, sold under the slogan "Italian Living," last year included sofas and beds for the first time, as well as shelves, tables and, of course, chairs. One big shift came in 2000 when the firm began buying and processing its wood in Croatia, at a plant near the forests where it's cut. Calligaris switched some of the upholstery work to Bosnia, where wages are one-tenth of those in Italy. And he has put a relentless focus on making his own branded products rather than manufacturing for other companies. In 1997, 35% of the firm's output was of no-name furniture; today it's 1.5%. The firm's 12,000 retail clients include such marquee names as Bloomingdale's.

"Everybody thought Calligaris was mad when he started, but now he is a model for all of us," says Gino Piani, who runs a company called Forsedia, with 50 employees, three lines of furniture and slumping sales. Piani's answer is Calligaris-inspired: he is trying to create his own brand and a sales network with fellow entrepreneurs. Two of the four firms he hoped to team with have since dropped out, but Piani doesn't need to look very far to see that he needs to do something. The Manzano district as a whole is working on a strategy that might help all the chair manufacturers: creating a certified hallmark analogous to the one used by the ham producers of San Daniele, 12 miles away, who make a famous prosciutto. To qualify, chairs would have to be made locally and meet stringent quality standards. Each hallmarked chair would be numbered for authenticity. "The first thing we need to do in this global world is to have an identity. If we don't, we'll disappear," says Fabrizio Mansutti, president of Promosedia, a local trade association that is sponsoring the plan.

Yet even as they talk about focusing on Italian manufacturing heritage, officials for the bigger firms are dealing with reality and shifting production out of the Manzano district. Luigi Cozzi, for example, has relocated his wood treatment to Romania, where his firm, Idealsedia, now has 300 workers--50 more than it has in Italy. Such cost-cutting moves are a matter of survival. Natuzzi, a major Italian sofamaker headquartered in Santeramo, still makes high-end products in Italy. But less expensive sofas aimed at price-conscious North American consumers are wholly made at a factory Natuzzi operates in Shanghai. The company had no choice but to open a Chinese plant, says Daniele Tranchini, Natuzzi's chief global sales-and-marketing officer. "Half our sales come from North America, and that market has been hit more than most with cheap products from China," Tranchini says. Besides, he adds, "everyone recognizes it's an Italian product. Where it is manufactured has really become a secondary issue."

  1. 1
  2. 2
  3. 3
  4. 4
  5. 5