We meet CEO of Artek, Mirkku Kullberg, the CEO of Tod’s Group, Diego Della Valle, and Indonesia’s minister of tourism and creative economy, Dr Mari Elka Pangestu, to hear how they're helping put the design industry at the heart of each of their countries' brand image.
September 2013 was a momentous month for Finland. Within the space of a fortnight, foreign conglomerates purchased two of the nation’s most well-known flag-flyers: Microsoft acquired a substantial portion of Nokia for €5.44bn and Artek, the quintessentially Finnish furniture brand, was bought by Swiss design giant Vitra.
Artek had been owned by Swedish investment company Proventus since 1992, and changed hands for an undisclosed sum.
While Microsoft’s decision to purchase Nokia was an essential lifeline for the underperforming company, the acquisition of Artek by Vitra came as a surprise to many. The brand, established in 1935, seemed comfortable in its position as a modest workhorse of the global furniture industry. While Artek was not the avant-garde design pioneer it was in co-founder Alvar Aalto’s day, its Stool 60 and Tea Trolley 901 pieces remain as popular as ever.
But one woman wasn’t happy for the company to plod along. ceo Mirkku Kullberg joined the company in 2005. Under her tenure, Ville Kokkonen was installed as design director in 2009 and the catalogues of design greats Ilmari Tapiovaara and Yrjö Kukkapuro acquired.
The involvement of Vitra not only represents a major turning point for Artek, which will move into new headquarters in Berlin next year, but suggests Finland is at a crossroads. The question now facing Artek, Nokia and the country at large is, what next?
M: What motivated the move?
MK: Capital is capital but then there is knowledge capital. In the case of Artek we needed knowledge capital. We needed someone to help us with the scaling, production, sourcing.
M: What do you think the standing of Brand Finland is at the moment?
MK: Isn’t it telling? This country has been such a closed society; we have not let international companies come. The fear of letting the Guggenheim come here is just a kind of protectionism [the city recently rejected a bid to open a branch of the museum in Helsinki]. We had a number of international hotel operators who have been wanting to [create] an international scale of hotel in Helsinki – the city politicians didn’t let it happen. The protectionism is now being forced to end somehow.
We need international investment and again, it’s not about the money, it’s about the knowledge capital. Either you take it now or it comes by force. Nokia was a benefit and a burden for Finnish society and the economy, in that through Nokia we became very comfortable and very lazy. It brought us the first millionaires in the country and they brought some kind of wealth for a wider audience. We thought that there would be more of these Nokia stories. It was the exception.
M: What do you think is the next step for young Finnish designers now?
MK: One thing annoying me is they think that because they are Finns they should have access to work for Artek. Why? You have to be an international scale of designer to be able to work for this company. How do you become an international designer? Go out. Go out of this country. Work for a while.
M: Do you believe this acquisition can replenish the design industry here again?
MK: Yes. It was great, getting some fresh wind coming from somewhere. It was like, ‘Wow, the wind is blowing and somebody is wiping the dust away’.
As CEO of luxury goods powerhouse Tod’s Group, Diego Della Valle’s interests go beyond the world of fashion, funding a number of projects that have helped boost job growth in Italy.
Italy faces stiff headwinds as it looks to emerge from a two-year recession but one business leader who hasn’t struggled through the turbulent economic conditions is Diego Della Valle. The 60-year-old chief executive of Tod’s Group has taken a modest shoemaking business, started by his cobbler grandfather in the country’s Marche region, and turned it into a luxury goods powerhouse that today sees nearly €1bn in sales annually.
Not indifferent to the government’s struggles to stimulate job growth, Della Valle has helped boost payrolls beyond the world of fashion as one of the key backers of ntv – a private high-speed rail operator. And more jobs were secured when he offered funds to cover restoration work on the Colosseum in Rome.
Although many of his peers manage their family enterprises behind closed doors, Della Valle took his company public in 2000 with a listing on the Milan stock exchange. Yet he still indulges in classic Italian pursuits outside the boardroom – he bought the then bankrupt football club Fiorentina in 2002 and brought the team back into the top flight of Italian football.
While rival fashion houses continue to move from one trend to another, the Italian businessman prefers to keep the Tod’s brand “modern while deeply rooted in tradition”, as witnessed by the long-standing success of its signature handmade leather goods – including the D-bag and iconic slip-on driving shoes with rubber-pebbled soles.
In a luxury sector that has seen rival French groups descend on Italy in recent years in search of acquisitions, Della Valle has made moves to stay ahead. This year the brand introduced JP Tod’s Sartorial – a men’s collection of footwear and bags made with colouring techniques that clients can customise in cosy gentlemen’s clubs housed inside some of the brand’s stores. monocle caught up with Della Valle at Tod’s flagship boutique in Milan’s Via della Spiga to hear his thoughts on the state of luxury retail.
M: How is the luxury goods market changing?
DDV: There’s an evolution in consumers’ sensibilities. You see a maturity in customers from emerging markets in Asia and South America. More and more, these now experienced clients want to have well-made things. The emerging market consumer has been bombarded by a lot in the past six, seven years that were presented as luxurious but were made with a lower quality by brands looking to increase their bottom line. Things lost their exclusivity.
Today, one needs to distinguish between real luxury and products that are more commercial. Clients are more demanding. They look for special items that may not cost that much but that are very creative or special because they have exclusive features. Given there’s been a worldwide crisis that’s lasted for a long stretch of time, consumers have become more attentive about how they spend their money. You can’t try to bluff them.
M: What’s the best retail strategy?
DDV: Certain department stores are prestigious and it makes sense to be in them. Brands like ours have chosen a more direct approach that I consider to be the best. It’s simple: if you make beautiful things, you want to explain how it’s done and do so on your terms. You want to sell in places that are welcoming to the consumer.
Our JP Tod’s concept is like a sort of club. One calls ahead to reserve a spot, choose the materials and have an espresso while learning about how these products are made. In a way it’s a return to an era when the consumer would buy goods from shop owners who were the very same people that made the goods. Here the [retail] innovation is doing something that’s not new: you still walk in and find leathers that are worked just as they were 60 years ago.
M: How important is Asia to luxury goods brands?
DDV: [Emerging markets in Asia] are new markets for luxury goods – 10 years ago they weren’t on the map. They are big markets and will remain very big but their growth will slow down in the coming years and normalise.
M: Is it better for a company to be family owned rather than public?
DDV: This is a public company that refers back to a family – mine. My brother and I head up the business. I still like to check all the little details, the shop windows and products and discuss new ideas but we also have a group of top-notch managers who have been with us for a long time. When an owner of a family business has the chance to work next to capable managers, that’s a bonus. A business shouldn’t be afraid of being listed on the stock market. It can be a good support for developing the company.
M: How important is ‘Made in Italy’ today?
DDV: For the consumer, Made in Italy still represents creativity, craftsmanship, quality and exclusivity. It’s a feather in our cap that helps our brands.
M: Is it difficult today to find the next generation of luxury goods craftsmen?
DDV: I think the world of artisan manufacturing needs to offer incentives to the younger generation to show them that this is a good profession. There needs to be an approach similar to what you’ve seen with MasterChef, for example. It has given lots of young people a desire to go out and try to make a good living as a chef. Twenty years ago being a cook in a restaurant was the last thing on people’s minds.
We need to find an intelligent way to attract the attention of younger people and convince them that being a talented artisan and working in a trade – working with their hands – can be a big advantage.
Tasked with putting Indonesia’s best foot forward, Dr Mari Elka Pangestu is driving its creative economy’s affiliation with tourism
Comprising around 8 per cent of Indonesia’s total gdp, 10 per cent of its exports and employing nearly 12 million people, the country’s creative economy is of no small significance and was given a voice in the country’s government with the establishment of the Ministry for Tourism and Creative Economy in 2011. While the office may be new, the woman in charge is no stranger to the Indonesian cabinet. Having served as the minister of trade for seven years before taking the helm of her new department, Dr Mari Elka Pangestu is a well-known face in Indonesian politics. She is also one of the creative economy’s best advertisements: she regularly appears in public wearing Made in Indonesia clothing, reflecting a changing notion in the country about the value of their own products.
M: What does the creative economy mean to Indonesia?
MEP: We chose a definition that I think makes it easy to understand: how do you create economic value from existing knowledge or existing technology? Inside existing technology is your cultural heritage. You don’t have to necessarily invent something new. But it’s how you use what you have already existing, then grow it and get a lot of value from it.
If you hit it right, just like South Korea did with “Gangnam Style”, you can see how the value can be so exponential. I would say South Korea is a very interesting example for us to learn from. South Koreans are so proud of everything South Korean and they really work at it. They’re maybe 15 years ahead of us there. Batik is our example. Ten years ago, you wouldn’t see batik cloth in the way people wear it today – it was basically only for formal occasions and it was boring, just shirts and sarongs. Now you see it in many manifestations. It’s led to a revival of the traditional craft as all of these are still handmade. And young people are working in that sector again.
M: Why group the creative economy with tourism?
MEP: President Susilo Bambang Yudhoyono felt that before this ministry was created, we had different ministries that were somehow involved in the creative industries. He wanted to move it faster and that’s why he created the ministry. And the logic of pairing it with tourism is that tourism and creative industries are interlinked. If you see creative industries grow, you can see tourism grow.
Because this is a new ministry, I always encourage both the tourism side of the ministry to make sure they’re linking with the creative industries side and vice versa. For instance, we are prioritising 16 destinations in Indonesia. The creative industries people will naturally focus on these 16 destinations in a more intense way. We can’t make everything in handicrafts, so we focus on souvenirs. The job is to improve the quality and design of the souvenirs in these 16 locations. And if someone wants to make a film in Indonesia, we will try to push them to one of the 16 destinations. So, if there is a big hit, then we will get a big tourism hit.
M: What are some of the tools you use to help the creative economy along?
MEP: The timing is right for us to be coming in to facilitate this because domestic demand is huge. Middle- income shoppers are increasingly proud to see good-quality Indonesian products. I’ve been doing this ever since I was in the Ministry of Trade.
You have to wear and use the products yourself. And every time you do an event, you’re showcasing the whole time what is good about Indonesia and what we can be proud of. It’s a process that’s just beginning.