Word: vecchio
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...counterintuitive to say the least. Back in 2001, when Claudio Del Vecchio, the son of an Italian eyeglasses magnate, was thinking about buying Brooks Brothers from the British retailer Marks & Spencer, the sales pitch included a familiar refrain: a new owner could close the Queens, N.Y., tie factory, move manufacturing overseas and save a ton of money. DelVecchio did buy the company, but he didn't close the factory. Instead, he plowed millions of dollars into improving it. Now every single Brooks tie, whether sold in Detroit, Milan or Dubai, starts there. "Of course we could go to China...
...take about an hour. "The flexibility to reproduce something if it's doing well or to not produce a lot of something if we don't know it's going to do well has a benefit on top of the bare cost of producing that one tie," says Del Vecchio. "We can get things in three days if we want to. China could never do that...
...other words, Brooks has found enough genuine operating reasons to stay in the U.S. And it all works out, says Del Vecchio, because of the company's commitment to constantly upgrading its technology, like the automated cutting machine installed in March 2007. (Ramirez and other cutters still handle the most expensive and delicate fabrics by hand.) "If you don't believe in a factory, you don't buy new machinery, and other people beat you at quality and productivity," says Del Vecchio. "It's the dog eating its own tail, and in the end, you have to close. That...
...Vecchio attributes Casual Corner's demise to a fundamental shift in how people shop. "The middle-market shopper went like this," says Del Vecchio, raising one hand and lowering the other. "Middle customers started buying what was not aspirational at Wal-Mart, and with the money saved, they could now afford a Coach handbag instead of one from Casual Corner...
That same bifurcation, he says, is helping power Brooks Brothers as it lurches up the fashion food chain. Brooks brought in about $800 million in sales last year, compared with $661 million during its last full year under Marks & Spencer. As a private owner, Del Vecchio chooses not to disclose earnings. But he does say that during his years at the helm, he's been surprised by how much the Brooks heritage resonates with consumers. "It's much more than what I expected," says Del Vecchio. Now if he could just finish convincing everyone that the legacy is still relevant...