The scenario in 2009 can only be called difficult. The Group boasts a unique position in terms of product quality at an affordable price, an extensive and flexible distribution model, based on a network of excellent commercial partners, and proven financial solidity. Strengthened by these elements, the Group undertook a series of radical measures during the year to bring the business into line with the new environment, which has also put earnings under increased pressure.
A number of specific projects have been identified, focusing on 40 initiatives involving more than 50 managers. The reorganization involves four areas of intervention:
Support and stimulus for the commercial network
The focus has been on providing greater stimulus to the commercial network on the basis of a selective logic and timing for collections and volumes, according to brand and country. The wide presence of our stores has been used to maximize the contribution of recently launched new product initiatives.
Greater efficiency in the supply chain
After the positive results already obtained by simplifying collections, the process of improving the efficiency and effectiveness of the supply chain continued with renewed commitment in 2009, resulting in a further important optimization of costs.
The strategic actions taken in terms of sourcing are based on innovating collection processes with a view to simplification and efficiency maximization.
Tangible benefits have been obtained by continuous renegotiation in the face of changing raw material costs and exchange rates and by optimizing the production sources mix in order to achieve the best combination of quality and time-to-market.
Optimization of costs
The actions taken, in terms of both direct and indirect costs, have allowed the Group to adapt fast and flexibly to the new environment, by combining certain functions for greater efficiency, by introducing new competencies in key areas of the business, by simplification and by having clear accountability for the restructuring plan's objectives.
Focus on capital employed
Cash generation has been the primary objective for reinforcing the solidity and value of the Group: maximum attention to working capital management, to accelerating openings in locations already acquired and to optimizing investments with a view to supporting the commercial network.
Together these actions have made it possible to exceed the original targets for cost containment and cash generation, thus effectively supporting profitability and making the Group stronger to face the future.