Concession agreements Italian style

The diffusion of Internet and e-commerce has made it difficult for manufacturers and retailers alike to cope with the popularity of online shopping. Even in Italy, the augmented risk of being left with unsold merchandise has encouraged vendors to demand important changes to commercial arrangements (such as return policies), and the threat of empty shops has made it increasingly important for brands to create meaningful points of engagement with consumers. Consequently, recent years have witnessed a metamorphosis of the retailer-brand relationship. More specifically, department stores have looked to more suitable agreements, such as concessions, to fill their spaces with less risk, while designers might put more emphasis on flagship stores to communicate brand identity and gain market share. But brick and mortar shops are expensive to establish and operate. The inviting ambience of the so-called ‘corner’ (or the ‘shop-in-shop’) within the luxury department store appears to offer a solution for both parties. If it is true that today’s consumers expect rapidly changing, captivating displays of novel fashion products, it is also true that designers and retailers manage new market realities through a nexus of arrangements. For lawyers practicing in this sector, substituting the wholesale model with alternative agreements means translating party concerns into contractual clauses. These complex agreements must be both adequately detailed and sufficiently flexible. This article aims to briefly comment on the contracts used to create single-brand shops within sophisticated multi-brand department stores in Italy. To this end, the discussion will focus on the most significant contractual provisions and latest trends, such as the pop-up shop-in-shop.