>> As luxury brands are increasingly turning to manufacturing in China and technological savvy to increase profits, Tod's chairman Diego Della Valle refuses. He runs Tod's like a traditional, old-fashioned family business — instead of listening to focus groups to decide which new shoe styles should go into production, he wears the shoes, and decides after a few days if they're to his liking. And there are no computers or iPhones in his office — Della Valle makes do with an outdated Motorola cellphone.
“We don’t take risks,” says Della Valle, who has grown Tod's into a multibillion dollar company and kept the business concentrated on shoes and handbags. “We want to guarantee our customers we’re giving them the best.” While the brand has 24 stores in China, Della Valle refuses to move production there just to reduce costs, something that other Italian-based brands have done recently.
A men's crocodile loafer retails for 3,500 euros and costs 1,590 euros for Tod's to make in Italy; making it in China would reduce production costs by half, and therefore, increase the company's profitability. But Della Valle thinks it's worth the price — and the strategy is paying off. Tod's was one of the few luxury companies worldwide to increase sales and profits throughout the financial crisis: profits grew from 77 million euros in 2007 to 83 million in 2008 and 86 million in 2009.