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Dolce & Gabbana

Company name: Dolce & Gabbana (D&G)

Industry: Dolce & Gabbana is one of the pioneers of the fashion industry in developing exclusive products that can range anywhere from garments, fragrances, and watches.

Ownership: Owned by Italian designers Domenico Dolce and Stefano Gabbana

Revenue: €1.38 billion in 2019

Founding date: 1985

Dimension: 5,500 employees

HQ: 10 Via Carlo Goldoni, Milano

Brief History

The two designers used to work in the same company in Milan and met in 1980. Dolce & Gabbana was officially established in 1985.

Dolce & Gabbana began with a strong specialisation in women ready-to-wear, which they labelled “Real women”. The two came up with the name because they used local women to show their collections. Due to limited resources, they could not afford to hire models, so they relied on their friends to model during the fashion exhibitions. The business had a rough beginning, with the two almost quitting after the first collection’s sales turned out to be disappointing. After showing their collection in the Milan Fashion Week, the duo expected a boost in their sales, but that did not happen.

In 1988, the two launched a leotard line and, the year that followed, designed underwear and swimming costumes. At this point, the label was picking pace, and the business started exporting their products to countries such as the US and Japan. By 1990, the two had set up a showroom, and in 1992, they presented their first men’s collection. The duo’s men’s collection was well received in the market, with the brand receiving the Woolmark Award for showing the most creativity in a men’s collection. The same year, the brand launched its first perfume called Dolce & Gabbana. The duo received an award for the best male perfume from French Parfum Academy and became the first Italian brand to receive the award.

Dolce & Gabbana brand received its first international recognition in 1991 when Madonna appeared in New York City for the premiere of “Truth or Dare” while wearing a jacket from Dolce & Gabbana. The artists helped to market the brand, and in one of the interviews, she described Dolce & Gabbana costumes as humorous and sexy. In 1993, the company partnered with Madonna and designed more than 1500 costumes for The Girlie Show.

The brand did not stop at Madonna and managed to strike deals with other artists like Missy Elliott, Mary J. Blige and Beyonce. The artists helped to popularize the brand during their international tours. Besides using music artists to market their brand, Dolce & Gabbana also used football to promote their label.

Financial Analysis

Dolce & Gabbana has thrived since its 1985 founding by the dynamic duo. But it is, in reality, a family affair. Dolce’s brother Alfonso, 54, is the company’s chief executive officer. Their sister Dora, 64, is in charge of research and development for the ready-to-wear collection. Stefano Gabbana and Domenico Dolce each control 40% of privately held Dolce & Gabbana Holding SRL shares. The rest of the Dolce family, through Alfonso and Dora, controls 20% of the company.

For the 2018-2019 fiscal year, the brand reported €1.35 billion in revenues, up 4.6% from €1.29 billion in the previous 12-month period.

Womenswear represents 55% of revenues, menswear 39% and the kids’ collection 6%. Slightly more than half of D&G’s revenues come from Europe; 22% from Asia excluding Japan and Korea; 16% from the US, and 5% from Japan and Korea.

Despite being frozen out of China, the world’s second-biggest luxury market, revenue for the fiscal year ending in March 2019 was up by 5% to €1.38 billion.

Product and Strategy Development

As for the product, Dolce & Gabbana is a leading fashion brand that differentiates itself from other brands with its unique designers’ style characterized by bold prints and coloured designs inspired by the Sicilian traditions. Their point of strength and recognition is the black lace, a symbol of rigour and feminine sensuality, which embodies the woman of our time with a strong and fragile personality at the same time. Since the beginning, they created an iconic atmosphere surrounding the brand. It’s a world made of emotions, traditions, culture and Mediterranean values. D&G is able through the presentations of the collections to transport viewers to worlds far from reality, thanks to the theatricality that distinguishes them from other brands.

In June 2017, Dolce & Gabbana began to combine online and offline shopping experiences. It sent bespoke virtual invitation cards to selected customers in China to try out its new perfume, Floral Drops. These personalized virtual cards gave access to monitor each influencer’s results.

Recently, digitalization is fueling major industry opportunities across the value chain. In order to track continually-evolving consumer behaviour, D&G are developing an appetite for analyzing big data through artificial intelligence and augmented reality applications. As customers use more channels for purchasing, D&G recreate the interactions between customer and sales assistant virtually to explain products better online.

D&G: present and future

Even with the efforts to maintain a good public image, Dolce & Gabbana has had a couple of incidents that have threatened the brand’s reputation. Over time, Dolce & Gabbana has experienced problems with its adverts. Many of its adverts have caused public outcries. One of the campaigns in 2007 involved two men pinning down a woman, which critics suggested potentially glorifies rape culture.

As if the company had not learnt from their scandals, it became involved in another scandal in 2018 through a video showing a Chinese model eating pizza using chopsticks. The video received a lot of criticism from the Chinese community, who felt that it was mocking the Chinese culture. The company was forced to take down the advertisement, after which Stefano Gabbana expressed his hate for China. His remarks and the video angered many Chinese people, including Wang Junkai and Dilraba Dilmurat, who were the brand’s ambassadors, cancelling their deals with the company. The final blow came after the Chinese e-commerce sites removed the Dolce and Gabbana products from their sites. Although the duo apologized later on Instagram, the damage to the brand’s reputation in China could not be repaired.

Dolce & Gabbana has had so many incidences of racial and sexual discrimination statements by the fashion firm’s founders. Although the brand has survived the criticism that has followed after such incidents, its reputation has been affected badly. The damage to its reputation has resulted in the loss of some of its market share worldwide. The duo has always tried to apologize after each incident, but the extent of the damage has not been easily repaired by more apologies. It appears that no matter what it does, the Italian brand can’t seem to shake off its negative image in China — perhaps justifiably so. D&G’s “eating with chopsticks” campaign from November 2018 left the brand’s reputation in tatters. D&G products are still unavailable to purchase from many Chinese retailers, including Tmall. China’s fashion elite have neither forgiven nor forgotten.

However, despite all the scandals, D&G clawed its way back from cancellation. The Italian luxury label is once again a fixture of the red with Greta Gerwig, Blake Lively, Lupita Nyong’o and even the Duchess of Cambridge wearing the brand during public appearances. The ex-first lady Melania Trump, a longtime supporter, wore a dark Dolce & Gabbana suit to former President Donald Trump’s State of the Union address.

Their sudden return marks a new chapter in one of fashion’s most enduring mysteries: why, no matter what Dolce & Gabbana’s controversial founders do, does the brand always come roaring back?

“If there’s a lesson to be learned, it’s that consumer outrage and hashtags may temporarily hurt a brand’s image on social media, but connections with celebrities and editors can still counteract those”, said M.C. Nanda AND Tamison O’Connor in a Business of Fashion “How Dolce & Gabbana Clawed Its Way Back From Cancellation” article.

Author: Jade Mouradian

Sources: Fashionista: Dolce&Gabbana Controversy and Forgiveness, Vogue Business, Communication and Brandin Analysis, Fashion Magazine, BoF, JingDaily.

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