23-24 Unit9 Italianbusiness

Lingua inglese 6 crediti a.a.
2023-24
Italy today Readings in Economics and Business
Unit 9 - Italian Business
SECTION ONE TEXTS
Unit 9 offers an overall vision of the Italian business world today together with a couple of reports on new initiatives. After
making an arresting comparison between Sicilian aristocrats facing a newly united Italy and 21st Century corporate
classes up against Silicon Valley and the Chinese masses, the first text goes on to recall the high points of the post-war
revival period, but also points to signs of present decline like selling out to foreigners. Though the text then investigates
the lack of financial, social and human capital, all is not doom and gloom, for signs of the old vigour still exist, as in the
case of the ‘pocket multinationals’. Still more vigour appears in the second text, which centres on the ground-breaking
Yoox, un-Italian in its business model and its novel entry into the fashion world selling on-line end-of-season luxury
clothing. Success again in the third article, which covers the twenty-year growth of a make-up cluster in the Crema area
operating on a global level.
TEXT A Italy SpA offers an object lesson1 in corporate decline (2020)
How the leopard lost its spots2
Few works of literature capture the challenges of managing decay better than “The Leopard” 3,
Giuseppe Tomasi di Lampedusa’s masterpiece about Sicilian blue bloods struggling4 to adapt to the
changes ushered in5 by Italian unification in the 1860s. Replace the “shabby6 minor gentry” with Silicon
Valley parvenus7 and recently monied8 masses with emerging China, and the novel also serves as an apt 9
metaphor for the decline of once-princely corporate Italy.
“We had the richest and most perfect region of the world but we are old aristocrats who are
losing our momentum,” sighs Marco Tronchetti Provera, boss of Pirelli, a 148-year-old tyremaker10 based
in Milan. Many of his fellow chief executives echo Tomasi di Lampedusa’s Don Fabrizio, who pined11
1
An object lesson is a striking practical example of a principle or ideal.
2
i.e. lost its place, role, identity.
3
leopard: gattopardo
4
to struggle: lottare
5
to usher in: fare entrare
6
shabby: dimesso, trasandato
7
parvenu: nuovo ricco
8
monied: facoltoso
9
apt: appropriato
10
tyremaker: produttore di pneumatici
11
to pine: essere addolorati
1
Lingua inglese 6 crediti a.a.2023-24
for the days when “We were the leopards, the lions.” Like the fictional patriarch, they see the world in
upheaval12 but find themselves unable to do much about it.
Ironically, when Tomasi di Lampedusa’s novel was published in 1958, Italy was the opposite of
decaying13. Its GDP doubled between 1951 and 1963, and by 1973 added another two-thirds. Gianni
Agnelli, Fiat’s dashing14 owner, hobnobbed15 with the Kennedys. The Red Brigades’ campaign of terror
launched in 1970 shook business for over a decade but did not cripple 16 it. Olivetti became the world’s
second-biggest computer-maker, behind IBM. Montedison was its seventh-largest chemicals firm.
Mediobanca rivalled Lehman Brothers17 and Lazard in merchant-banking prowess18. Benetton brought
colourful sweaters to the masses; Giorgio Armani, Gianni Versace and Dolce & Gabbana shoulder-
padded19 Wall Street and Beverly Hills.
These days Italy SpA is out of style. The country’s doldrums20 aren’t news; The Economist called it
“the real sick man of Europe” 15 years ago. “It escapes no one, and certainly not business,” says Carlo
Bonomi,21 head of Confindustria, Italy’s main business lobby. Even before covid-19, its economy was
smaller than it had been before the financial crisis of 2007-09. Its stock market is worth under €500bn.
It accounts for 3.7% of the MSCI22 index of European stocks, down from 6.2% in 2000, according to
Morgan Stanley, a bank (see chart). Only seven Italian firms feature23 among the world’s 1,000 biggest
listed ones. The €77bn market capitalisation of the most valuable, Enel, an electric utility, is a rounding
error24 relative to that of America’s trillion-dollar tech titans.
Rather than confront these challenges, plenty of Italian tycoons have been flogging25 the family
silver. Treasured Italian brands that have gone into foreign hands in the past decade include Bulgari, a
12
upheaval: sconvolgimento
13
to decay: decadere
14
dashing: affascinante
15
to hobnob with: frequentare
16
to cripple: paralizzare
17
Founded in 1847, Lehman Brothers was the fourth-largest investment bank in the United States until it filed for bankruptcy in 2008. It was
the largest bankruptcy filing in US history, and played a major role in the unfolding of the 2007-8 financial crisis.
18
prowess: abiltà.
19
to shoulder pad: vestire di spalline
20
doldrums: stasi
21
Carlo Bonomi: head of Synopo, an Italian company marketing electro-medical equipment, assistance services and accessories for hospitals,
private health institutes.
22
Morgan Stanley Capital International, an investment research firm providing stock indexes, portfolio risk and performance.
23
to feature: apparire
24
a rounding error: immaterial amount
25
to flog: vendere The expression means selling a very valuable resource for a quick and immediate gain or advantage, rather than holding onto it
for future use or to acquire even greater value.
2
jeweller (sold to LVMH, a French luxury group); Luxottica, which makes Ray-Ban shades (and merged
with Essilor, a French spectacles26 firm) and Versace (bought by Michael Kors, an American fashion
house). Since 2015 Pirelli’s biggest shareholder has been ChemChina27, a state-owned giant. In 2018
Federico Marchetti sold Yoox Net-a-Porter, his online luxury start-up and Italy’s rare tech success, to
Richemont, a Swiss group.28
Others have been departing il bel paese. After merging with Chrysler in 2014 Fiat moved its
headquarters to London and legal seat to the Netherlands; it is now combining with PSA Group, a French
carmaker. Ferrero, the maker of Nutella, has decamped29 to Luxembourg. This year Campari, producer
of the bitter apéritif owned by the Garavoglia clan, picked30 the Netherlands. It may be joined by Mediaset,
Italy’s biggest private broadcaster controlled by Silvio Berlusconi, a scandal-prone31 former prime
minister, which is seeking to move the headquarters of its holding company there.
Many other firms are shadows of their former selves. In 20 years, the market value of Generali,
an insurer, has more than halved, to €19bn. Telecom Italia’s has shrivelled32 by nearly 90%, to €7bn.
Intesa Sanpaolo and UniCredit, two big banks, tried their hand at consolidation with ambitious deals in
Europe, only to retrench33.
Three main reasons explain corporate Italy’s slide34 into irrelevance. They have to do with a self-
reinforcing lack of financial, social and human capital.
According to the OECD, a club of industrialised countries, 40% of Italian corporate assets are
financed by short-term debt, more than among big European peers35. Credit is granted on a basis of
history, so new firms find it hard to raise money. Political risk—embodied by the rise to power in 2018
of the antibusiness Five Star Movement (M5s)—plays on the nerves.
Italy’s capital markets are shallow36 compared with the rest of Europe, let alone37 America. It has
no venture-capital industry to speak of. Business elites grumble38 about Italians’ aversion to investing in
their own stock market, despite being among the world’s most prodigious savers. Domenico Siniscalco,
a former finance minister, likens it to “an oil-producing country without an oil industry”. Investors are
wary39 of putting money into listed firms controlled by founding families or the state, which dominate
Italy’s shareholder registers—and which prevent their companies from raising new shares, fearing
dilution.
Confidence in big business is further eroded by a constant gusher40 of scandals. Every few months
a business bigwig41 gets into hot water.42 In July prosecutors requested an eight-year prison sentence for
26
spectacles: occhiali
27
The majority shareholder in Pirelli
28
A multinational specializing in luxury goods and jewellery
29
to decamp: andarsene
30
to pick: scegliere
31 prone:incline
32
to shrivel
33
to retrench
34
to slide:
35
peers: simili
36 shallow: poco profondo
37 let alone: per non parlare di
38
to grumble: lamentarsi
39
wary: cauto
40
gusher: scorrere
41
bigwig: pezzo grosso
42
in hot water: nei guai
3
the boss of Eni, an oil major,43 for allegedly44 bribing45 Nigerian officials to secure an oil block46. He and
the company deny wrongdoing.47
Disenchantment48 with corporate Italy sows 49 more mistrust, depleting50 its already thin social
capital. A recent report found that nine in ten Italians want caps51 on executive pay, the highest share
among seven Western countries. That would add to already baroque red tape that is a barrier for upstart 52
firms.
Rather than improving the physical and legal infrastructure that would help all firms, government
money goes to bailing out53 perennial failures. This year the state once again rescued Alitalia, the endlessly
loss-making flag-carrier54. Italy has no equivalent of the Fraunhofer55 institutes that help Germany’s
medium-sized firms stay at the cutting edge56 of their fields, observes Fabrizio Barca, an economist and
former development minister. “If we had the infrastructure of the Germans, we would be six or seven
times more competitive,” says Marco Giovannini, boss of Guala Closures, a global leader in the niche
market for bottle tops57. “We have to compete against inefficiency.” In 2017 he opened Guala’s main
research centre not in its Piedmont home, but in Luxembourg.
Di Lampedusa’s characters might recognise the third shortage—of human capital—as the
flipside58 of pride. In the post-war era, when it fuelled59 founders’ devotion to their creations, this was a
virtue (as to some extent it is today in Silicon Valley). Now it looks like obstinacy 60. Bankers talk of
multiple failed attempts to persuade Mr Armani to build a bigger group in the mould61 of LVMH. During
Italy’s lockdown, a photo of him dressing the windows of his Milan store added to the myth of Italian
43
oil major: leading international oil company
44
allegedly: presumibilmente
45
to bribe: corrompere
46
oil block: campo d’olio
47
wrongdoing: misfatti
48
disenchantment: disincanto
49 to sow, sowed, sown: seminare
50
to deplete: esaurire
51
cap: tetto
52
upstart: nuovo
53
to bail out: salvare
54
flag-carrier: compagnia di bandiera
55
Fraunhofer: a research organization with 75 institutes, each focusing on different aspects of applied science
56
the cutting edge: all’avanguardia
57
bottle tops: tappi di bottiglia
58
flipside: altra faccia
59
to fuel: nutrire
60
obstinacy: testadaggine
61
mould: stampo
4
creative genius. LVMH’s billionaire owner, Bernard Arnault, gets others to do that menial62 task, so he
can focus on business.
In 2017, Guido Corbetta of Bocconi University estimated that half of first-generation Italian firms
have an owner-boss who is over 60, and a quarter have one who is at least 70. Italian boardrooms’
denizens63 seem almost as ancient as the Renaissance art adorning their walls. Italy’s most prominent
businessmen—they are almost exclusively male—are octogenarians: Mr Berlusconi (84), Leonardo Del
Vecchio of Luxottica (85), Luciano Benetton, the clothing clan’s patriarch (85), Mr Armani (86).
No wonder Italians feel the system is rigged64 in favour of a few ageing billionaires and plump65
for populists like the M5s. Talented youngsters shy away66 from a career in the unloved business world.
Despite this self-perpetuating cycle, examples of Italy’s post-war industrial vigour persist. Enel is
a world leader in clean energy. In certain areas “pocket multinationals”, as Vittorio Merloni, an
entrepreneur, dubbed67 them in the 1990s, churn out68 wares 69admired the world over: Lavazza and Illy
(coffee), Moncler and Ermenegildo Zegna (fashion), IMA70 and Marchesini (packaging)71, or Technogym
(fitness kit).
And Italy remains a country of enterprise. The OECD reckons nearly a quarter of Italian firms
are high-growth, more than in most big European countries. Johann Rupert, the South African financier
behind Richemont, has mused72 that Italy’s craftsmen might benefit from a failure to adapt to
globalisation as the world comes to prize their old-fashioned skills. Pirelli’s Mr Tronchetti Provera praises
the deal with ChemChina, which let the tyremaker’s headquarters and technology stay in Milan, as “an
opportunity to further strengthen our position in China without giving up Italian roots”. Some see Italy’s
less hard-edged73 capitalists as an antidote to Wall Street; last year Jeff Bezos made a pilgrimage to
Brunello Cuccinelli, founder of a posh74-sweater company who advocates a humanistic capitalism.
In 2011, shortly before he became governor of the European Central Bank, Mario Draghi warned
fellow Italians that Venice in the 17th century and Amsterdam in the 18th century planted the seeds of
their collapse by putting elite privilege ahead of innovation. Corporate Italy can hang on to 75 what is left
of its sheen.76 But, as Don Fabrizio’s thrusting77 nephew, Tancredi, told his uncle, “If we want things to
stay as they are, things will have to change.” ■
TEXT A EXERCISE ONE

AIM – to establish main meanings
INSTRUCTIONS – Underline the option which best reflects the meaning of the text
1 Tomasi di Lampedusa’s famous novel gives lessons in dealing with success/failure.
2 It can also be read as a metaphor for the triumph/decline of corporate Italy today.
3 In the year the novel was published, the Italian was flourishing/ suffering.
4 These days Italy SpA is doing/not doing so well.
62
menial: umile
63
denizen: occupante
64
to rig: truccare
65
to plump for: scegliere
66
to shy away: evadere
67
to dub: sopranomminare
68
to churn out: sfornare
69
wares: prodotti
70
Established in 1961, IMA is a world leader in the design and manufacture of automatic machines for the processing and packaging of
pharmaceuticals, cosmetics, food, tea and coffee.
71
Designs and produces a wide range of packaging machines for the pharmaceutical and cosmetic industry .
72
to muse: riflettere
73
hard-edged: duro
74
posh: elegante
75
to hang on to: aggrapparsi a
76
sheen: lucentezza
77
thrusting: ambizioso
5
5 Many Italian tycoons have reacted by buying foreign firms/selling their famous brands.
6 Fiat moved its legal seat to the Netherlands before/after merging with Chrysler.
7 Telecom Italia is worth 90% more/less than 20 years ago.
8 One Italian problem is being financed by long-term/short-term debt
9 Another problem is that venture-capital industry is very small/big.
10 A third is that government money is being wasted/saved in rescuing failing companies
11 The top businessmen are almost all over 69/80.
12 However, Italy registers a more/less than average number of high-growth companies.
13 Italy has lost/still keeps its status as a country of enterprise.
14 Italian capitalists seem tougher/less tough than those of Wall Street.
15 Draghi warned of the dangers of putting elite privilege before /after innovation.
TEXT A EXERCISE TWO

Aim – to identify main vocabulary
Instructions – fill the gaps with one content word reflecting the meaning of the text. Appropriate
synonyms are acceptable.
1 ‘The Leopard’, set in the 1860s, can be read as an XXXXX lesson in the
management of decay.
2 The novel shows Sicilian XXXXX having difficulty in adapting to a new
reality.
3 In a freshly united Italy, the aristocrats felt threatened by the XXXXX of a
minor gentry.
4 Just as Don Fabrizio was disoriented and unable to react, so today’s
corporate Italy faces Silicon Valley and the new-rich Chinese XXXXX.
5 Like Don Fabrizio, Italian corporate princes today recognize changes, but
are losing their XXXXX and are unable to react.
6 Yet ‘The Leopard’ was published back in 1958, in a period still of economic
XXXXX and optimism.
7 The period lasted long enough for Olivetti to become the second biggest
XXXXX in the world.
8 And the recently established Mediobanca became a XXXXX to both
Lehman Brothers and Lazard.
9 In addition, the boom period was long, troubled but not XXXXX by the
terrorism of the Red Brigades.
10 Prosperity passed, however, so that that Italy was actually called ‘the ‘real
XXXXX man of Europe.’
11 Figures from the stock-market show that nowadays Italy is still in a period
of economic XXXXX.
12 A reaction of many tycoons has been to sell their companies, often to
XXXXX.
13 An alternative reaction has been to move both headquarters and legal seat
XXXXX.
14 Other companies, like Generali and Telecom, are still in Italy, but far
XXXXX than before.
15 Italy’s lack of financial capital can be seen in the difficulty of XXXXX firms
to raise money.
16 Investors have little confidence in a system where big companies like Eni are
prosecuted for XXXXX.
6
17 The government is accused of spending too much on bailing out XXXXX

companies like Alitalia.
18 It would be more helpful if the government invested in improving physical
and XXXXX infrastructures.
19 Italy needs an institute to help medium-sized companies to be more
XXXXX.
20 Have Italy’s aged firm-founders like Armani have become indifferent to
XXXXX?
21 In certain areas, however, Italy is going strong, as with the ‘XXXXX
multinationals.’
22 And the spirit of enterprise can be seen in the fact that so many companies
are XXXXX growth.
23 Did Jeff Bezos visit Bruno Cuccinelli just to buy a XXXXX sweater?
Text B On the shores of Lake Como, the Yoox78 founder talks about being an outsider — and
the world’s shopping habits. (2015)
Wearing a grey jacket from Alexander McQueen79, pale grey cashmere sweater and button-down80
shirt, his baby birdlike features81 exaggerated by black-rimmed spectacles, Federico Marchetti meets me
in a small parking lot82 on the shores of Lake Como, Italy. It’s a steely83 grey day and the clouds hang
mistily over the surrounding hills. As he greets me, the scene has a whisper of John le Carré84 about it -
like two operatives meeting to share secrets. The truth is rather more prosaic. The 46-year-old tech
entrepreneur and founder of Yoox(, the vast e-commerce retailer of luxury goods now poised on the
brink85 of a merger with Net-a-Porter,) is about to give me a tour of his hood.86
Marchetti settled in Como permanently a year ago, at the insistence of his partner, Kerry Olsen,
a writer and journalist, who wanted to raise their daughter, Margherita, three, in a house with a garden.
“I moved for her,” he says, explaining the daily commute87 to his office in Milan. Although Como has
no shortage of starry88 inhabitants - Richard Branson is a few minutes along the lakeside, George Clooney
78
The name Yoox is composed of the male (Y) and female (X) chromosome letters linked by OO, as the symbol of infinity or “the ‘zero’ from the
binary code, the fundamental language of the digital age.
79
a high-end British designer brand
80
button-down: bottonato
81
features: tratti
82
lot: spazio
83
steely: plumbeo
84
famous author of spy novels
85
brink: orlo
86
i.e. neighbourhood
87
commute: tragitto
88
starry: luminoso
7
owns a villa - the neighbourhood has, says Marchetti, the same sleepy provincial feel of his childhood
home in Ravenna, the Byzantine capital in Italy’s northeast.
The younger son of a “white-collar” family - his father was a warehouse manager at Fiat and his
mother worked at a call-centre - Marchetti launched Yoox in 2000 with next to no89 experience of the
fashion industry but the conviction he could persuade luxury brands to sell him end-of-season stock90 to
sell online, at a time when luxury accounted for “zero per cent” of the e-commerce market. Since then,
Yoox has grown into a multinational “lifestyle” company with revenues91 of €524m and a net profit of
€13.8m last year.
It entered the US in 2003, Japan in 2004 and, in 2006, signed a deal with Marni92 to provide tech
support and a website for the Italian fashion house. Yoox now powers the web infrastructure for 38
luxury brands (“mono brands”), including Armani, Valentino and those owned by the Kering 93 group. In
2009, the company was listed on the Milan stock exchange. And on March 31 this year, Marchetti
announced plans for a merger with Net-a-Porter, the luxury fashion site founded, also in 2000, by Natalie
Massenet94. In September, Marchetti will become chief executive of the newly created Yoox Net-a-Porter
Group and will oversee95 the operations of the world’s largest online luxury retailer.
The merger is another step towards a long-imagined “dream” of Marchetti - the specifics of
which he is vague about. “We started talking about a merger in 2009 but it was too early. It hasn’t been
done to please investors, or for stock price; it’s a merger based on substance. And the substance is two
companies that started at exactly the same time, with exactly the same vision, but which took completely
different approaches. We started with end-of-season, they started full price. Then they started end-of-
season, we started full price. Then we launched the mono brands, because we were strong at the back-
end96 with logistics, and they launched the editorial content, because they were strong at the front end 97
with the marketing. It’s incredible, like sliding doors98 - like it was almost planned. I don’t think any
merger in history has been so perfect on paper. “Nevertheless, as he quickly points out, this is not a
marriage of equals. Marchetti is still a solo operator and he’s very clear that the Yoox Net-a-Porter Group
has only one boss. He raises a hand: “And that’s me.”
Marchetti is notable for his relative anonymity. “My parents didn’t encourage me in any way - I
wasn’t guided. But I was good at school. But there was no inspirational teacher to push me into further
education – first economics and then an MBE from Columbia. “I did it my way,” he says. “I’ve been
alone most years. I started Yoox by myself.
“Starting a company like Yoox in a country like Italy, it’s quite a miracle. It was a cultural innovation:
internet, venture capitalist,99 stock options… It was an American story in Italy, so it was quite brave. But,
at the same time, I had huge advantages: the proximity to the designers, speaking the same languages to
the brands, understanding their needs.”
It was brave, possibly foolhardy100, to launch a company selling discounted luxury goods in 2000.
At the time, Marchetti was working as a merchant banker - and miserable 101 with it. “I was leaving the
office around 8pm and at night writing my business plan. Around Christmas 1999, I said, ‘I think I need
89
next to no: quasi
90
stock: merce
91
revenues: entrate
92
An Italian luxury brand founded in 1994, now part of Renzo Rosso’s group.
93
The French-based multinational corporation specialized in luxury goods owns luxury brands like Gucci, Yves Saint Laurent, Balenciaga,
Alexander McQueen, and Bottega Veneta.
94
a British-American fashion entrepreneur and former journalist. Credited by many as changing the way designer fashion is retailed, she has been
described as: "fashion's favourite self-made success story".
95
to oversee: gestire
96
the operations part of the system
97
i.e. with client contact
98
sliding doors: porte scorrevoli
99
venture capitalist: finanziatore
100
foolhardy: incosciente
101
miserabile: infelice
8
to do it.’ I’m 30, I had to take a risk. So, I quit my job. And in 40 days I convinced the venture capitalist
to give me €1.5m for 33 per cent of my idea,” he says. “And this was Italy, where there were two venture
capitalists, not Silicon Valley, where there are hundreds. “I took a big risk, and the risk was essential. I
cannot say I love risks. I’m not a cowboy102. I suffer, internally. But it’s a fine103 line between luck and
risk and I’ve been very lucky. We started in the same month as Net-a-Porter, in June 2000.
He may not be a cowboy but there must have been a certain swagger104 about the 30-year-old
nobody. “I didn’t even have a website,” he says. “And I was not the son of anyone. I was just selling the
dream of an online service. And I was very good at selling the dream. Because I believed in that dream.”
Marchetti made fashion his focus because it was a native luxury, because he had the home advantage and
because there was no competition. “You cannot be great at everything,” he argues, when I suggest the
big fashion brands have been rather cowardly105 about e-commerce. “You need to be a specialist. The
internet is a different set of skills. Unless, like Burberry, you have a leader and designer that is an internet
native and it’s part of the strategy.”
Marchetti’s specialism is in logistics and, to that end, his greatest asset106 is a warehouse in Bologna. A
102,000 sq m distribution centre through which 8,000 orders are processed every day, it is the mother
ship for the group’s operations. It is here that every one of the 5.5m items currently stocked107 are
unpacked, checked for damage, photographed, tagged108, stored and repackaged on their passage to a
final destination. A marvel of technology, it is patrolled by robots that pick out109 items from container-
loads of goods while 55 studios capture between 9,000 and 15,000 images every day. It’s also a very
human enterprise; human hands unpack the incoming product, dress the mannequins110 and pack the
merchandise away111 when it is sold: they might also wrap112 them in tissue paper113 or tie them with a
ribbon depending on the particulars of the mono-brand packaging.
“It’s an amazing operation,” says Marchetti. “You wouldn’t expect so much perfection from an Italian
company - about 0.001 per cent of mistakes. Why? Because we cannot send Armani.com a Saint Laurent
product. We need it to be right, otherwise it’s a loss of credibility.” Neither does the stock hang around.114
“We have a huge inventory in our logistics, so it’s a huge commitment115,” he says. “Boo.com collapsed
because of the inventory.” So, what do you do? Discount it to death? “Yes,” says Marchetti. “And
everything goes.” His other great advantage is a vast bank of data. With nearly 15 years and millions of
transactions to pick over,116 he has become a font of retail information and it’s a joy to quiz him about
the world’s shopping habits.
Who are the serial returners117? “The Germans,” he says. “They’re the worst.” And the least likely to
shop during office hours? “The Japanese are the most ethical guys. They only ever shop after midnight.
They don’t sleep.” (The Brits tend to shop late afternoon and evening and, though he won’t speak ill of
his countrymen, it’s pretty clear from his facial expression that Italians like to do it at their desks.)
The Spanish prefer red while the Italians love purple. Men are more loyal to brands and 65 per cent of
transactions are undertaken by women, except in China, where the reverse is true. It’s a game I could
102
cowboy: affarista con pochi scrupoli
103
fine: sottile
104
swagger: spavalderia
105
cowardly: codardo
106
asset: bene
107
stock: merce
108
to tag: etichettare
109
to pick out: scegliere
110
mannequin: manichino
111
to pack away: mettere via
112
to wrap: impacchettare
113
tissue paper: carta velina
114
to hang around: restare
115
commitment: impegno
116
to pick over: selezionare
117
to return: restituire
9
play all day. “It’s a sociological dream,” he agrees. It’s also valuable. For example: “We found out that
when women buy shoes, in two-thirds of cases they only buy shoes, they don’t mix the cart with anything
else. It’s a very focused category. Which means that, after analysing 8m orders with shoes, we launched
a website for shoes only [shoescribe.com], because we knew what women want. The power of
information is huge.”
If I were a luxury CEO, I would insist Marchetti be at every meeting. But, he says, luxury has
been fairly reluctant to harness118 the power of his data. “Historically, it’s an industry that drops down 119
from creativity to the customer - data have not been so essential. But I do my bit and I’m sure that they
will come.” Perhaps it’s just as well. If all we were being offered were things based on web sales, our
wardrobes120 would probably be directed by housewives in Texas. Besides, while Marchetti knows what
sells, he still doesn’t know why. “There’s a very common risk with data that you can become lost in it. At
Yoox we still use a good part of commercial instinct for the buy. It’s a mix. Using data is a piece of
information but that doesn’t necessarily mean that we are led by it. It’s the sociological point of view that
I’m missing. Why do women buy only shoes when they buy online? I don’t know. I just know that they
do.” Japanese are the most ethical shoppers, Germans are serial returners, and Italians love purple In a
commercial world dominated by chatter about Applebot121 and Silicon Valley evangelists, Marchetti is
an exception. He’s not especially tech-obsessed: he couldn’t care less122about the Apple Watch, and he’s
less dogmatic about the omnipotence of the tech age than one might assume. He doesn’t believe, for
example, that the internet will kill print media, nor the fashion show. “I’m a hybrid type of guy,” he says.
“I’m not a fanatic who thinks the world will only go online, or that there will be no more fashion shows,
or e-commerce will be 100 per cent of sales… I really think the fashion shows are a very efficient way to
make business.”
He suddenly looks a bit doleful123. “The next three years won’t be la dolce vita, that’s for sure,”
he says suddenly, as he considers the implications of his “perfect merger”. In spite of this, he’s very
happy. “I’m a bit Calvinist, I think, in a country that is very Catholic,” he explains. “Even when I took
the company public, I was distant. I just came home and ate a bowl of minestrone. No champagne. No
holiday. Nothing. I think it’s a problem - I always then think what’s next? I’m never satisfied. But when
I did the merger, I was very, very, happy.” No minestrone then? “No, no,” he laughs. “No minestrone
that night …”
TEXT B EXERCISE ONE

INSTRUCTIONS – Underline the option which best reflects the meaning of the text.
1 Marchetti launched Yoox with considerable/no experience of the fashion industry.

2 His aim was to persuade luxury brands to sell him the season’s/end of season stock.
3 Marchetti plans to take over/merge with Net-à-Porter.
4 The new company will be the largest/second largest online luxury retailer.
5 The two companies started out at the same time with the same/different approaches.
6 The position of chief executive will go to Massaret/Marchetti.
7 Marchetti’s great specialism is design/logistics
8 His great asset is his system of selling points/giant warehouse.
9 His vast bank of data is a source of shopping habits/changing fashion tastes.
10 He sees / does not see the future wholly in terms of e-commerce .
118
to harness: sfruttare
119
to drop down: passare
120
wardrobe: guardaroba
121
Applebot is the web crawler for Apple, which analyzes pages to find links.
122
couldn’t care less: non potrebbe importare meno
123
doleful: triste
10
TEXT B EXERCISE TWO

1 The journalist wanted to interview Marchetti because he is the tech

entrepreneur who XXXXX Yoox.
2 Yoox, the luxury goods e-commerce retailer, was then on the point of
XXXXX with Net-a-Porter.
3 The XXXXX of these two companies was going to create the largest online
luxury retailer in the world.
4 FM had launched Yoox because he saw an opening in selling XXXXX luxury
goods on line.
5 His breakthrough idea proved successful, because by 2014 Yoox was
registering XXXXX of €524m.
6 The XXXXX fashion site Net-a-Porter, had been set up in the same year as
Yoox.
7 Both companies, which shared the same vision, had become very successful:
where they differed was in their XXXXX.
8 FM was convinced that the merger between the two companies could be
described as XXXXX.
9 In the interview, Marchetti stressed how XXXXX starting Yoox was.
10 The combination of XXXXX, venture capital and stock options makes
Yoox into a very American story.
11 He took a great risk in giving up his job as a banker, and seeking out a
XXXXX capitalist – who are few and far between in Italy.
12 He describes all himself at being very good at selling a XXXXX – one he
believed in.
13 He also pointed out that to make a success of XXXXX, you need to be a
specialist.
14 FM’s great strength lies in XXXXX , as his enormous warehouse in Bologna
shows.
15 The warehouse is technically on the cutting edge, functioning with the
precision of XXXXX and studio cameras.
16 The whole operation, from inventory to packing and shipping, functions
XXXXX.
17 Very few errors and any remaining stock goes because it is all heavily
XXXXX.
18 Data serve up to a certain point, since buying goods has to be based in part
on commercial XXXXX.
19 FM’s carefully acquired retail information tells us that Germans are most
likely to XXXXX acquisitions.
20 The same retail information also tells us that women are less XXXXX to
brands than men.
21 FM’s retail information also taught him to fulfill a need by creating a specific
site for XXXXX shoes.
22 Though FM is very appreciative of his retail data, he realizes it cannot
XXXXX all the questions.
11
23 FM is not fanatical about internet, believing, for example, that it will not
mean the end of fashion XXXXX.
Text C Down and up in lipstick valley

Hit by covid-19, Italian makeup-makers are looking pretty again (2021)
Cosmetics firms clustered124 around Milan stand to benefit from long-term trends in the
industry
TWENTY YEARS ago Leonard Lauder125, the heir to the Estée Lauder beauty empire, observed that
during economic downturns consumers liked to sweeten belt-tightening126 with small indulgences. He
called it the “lipstick effect”, after one common pick-me-up127. Disappointingly for Italy’s “lipstick
valley”, (a part of Lombardy that, according to Cosmetica Italia, an industry group, produces 55% of the
world’s eye shadows, mascaras, face powder and lipsticks,) consumers mostly shunned128 these little
luxuries amid the pandemic recession. Whether because maquillage is less meaningful on grainy129 Zoom
calls or contoured130 lips invisible behind face-masks, sales of Italian makeup-makers fell by 13% last year.
Luckily for Italy’s beauty firms, shoppers are desperate to show their faces in public again. “When
the masks come off in June, people will go crazy131,” predicts Dario Ferrari, who founded and runs
Intercos, the valley’s biggest firm and the world’s largest contract manufacturer for makeup. Denizens132
of lipstick valley also stand to133 benefit from two longer-term trends: the rise of the image-conscious
Asian shopper and of direct-to-consumer makeup brands that need contract manufacturers to bring their
Instagram feeds134 to life.
Lipstick valley is the latest industrial cluster135 to emerge in northern Italy. Although France makes
more cosmetics, including skincare and body lotions, Italy has carved out136 a niche in makeup. The
environs137 of Crema, a medieval city an hour’s drive to the east of Milan, in particular attracted such
companies starting in the late 1990s, with proximity to the creative ferment of the Milanese fashion scene
as well as the technical expertise of an earlier cluster of chemicals firms. Intesa Sanpaolo, a bank,
reckons138 that around 350 cosmetics startups were created between 2012 and 2017, mostly in lipstick
valley.
124
to cluster: radunare
125
Chairman emeritus of Estee Lauder, the world's third-largest maker of cosmetics and fragrances.
126
belt-tightening: riduzione delle spese
127
pick-me-up :tiramisù
128
to shun: evitare
129
grainy: sgranato
130
contoured: sagomato
131
crazy: pazzo
132
denizen: abitante
133
to stand to: stare per
134
feed: the first visualization on Instagram
135
cluster: distretto
136
to carve out:
137
environs: ambiente
138
to reckon: calcolare
12
Today, the area is home to more than 1,000 companies in the makeup sector, which generate
annual revenues of €12bn ($14.5bn). In the few years before the pandemic, they were benefiting from
the bright and brash139 beauty trends rewarded140 on social media. Lipstick valley was in expansion mode.
Ancorotti Cosmetics, a family firm which makes one-fifth of the world’s mascaras, acquired and
repurposed141 a factory near Crema once owned by Olivetti, a defunct142 industrial giant.
Mr Ferrari is confident that his company will recover swiftly from the slump 143. Sales in March
were already higher than in the same month in pre-pandemic 2019, he reports. He is particularly bullish 144
on custom145 from upstart146 brands. Luca Solca of Bernstein, a broker, says that the combination of social
media and digital distribution has led to greater fragmentation of the beauty business. Two decades ago,
the vast majority of Intercos’s sales went to traditional beauty firms such as Estée Lauder or L’Oréal.
Today only half do; direct-to-consumer brands account for about a third (the rest is bought by retailers
147
like Sephora for their private labels). “You can come to us and we can make a brand in six months,”
Mr Ferrari boasts148.
He is also eyeing149 Asia. Goldman Sachs, an investment bank, expects sales of cosmetics in China
alone to double between 2019 and 2025, to $145bn. Last year Intercos took full control of a joint venture
with Shinsegae, a South Korean retailer, which allows Intercos to manufacture Shinsegae’s popular
brands—and also tap into150 k-beauty151 trends, which have conquered the world. It already manufactures
products for Perfect Diary, an Instagrammable Chinese brand whose parent company, Yatsen Holding,
listed 152 in New York last year.
Mr Ferrari’s fellow lipstick-valley bosses are likewise looking east. Investors—including eastern
ones—are in turn looking at them. In December GIC, Singapore’s sovereign-wealth153 fund, bought a
minority stake in Mr Ferrari’s family holding company. Giovanni Foresti of Intesa Sanpaolo calculates
that Italian cosmetics-makers’ retained154 earnings are higher than for the average domestic manufacturer
and they spend much more on research and development. Before the pandemic, Mr Ferrari was planning
to list Intercos on Milan’s bourse. No wonder bankers are nagging155 him to revive the idea.
TEXT C EXERCISE ONE

INSTRUCTIONS – Underline the option which best reflects the meaning of the text.
1 The ‘lipstick effect’ was/was not felt during the period of Covid.
2 Lipstick Valley, the cluster situated in Lombardy, produces over a quarter/half of the makeup
consumed in the world.
3 The biggest/newest company in Lipstick Valley is Intercos.
139
brash: sfrontato
140
to reward: premiare
141
to repurpose
142
defunct: defunto
143
slump: recessione
144
bullish: ottimista
145
custom: clientela
146
upstart: nuovo
147
retailers: dettaglianti
148
to boast: vantare
149
to eye: osservare
150
to tap into: attingere
151
k-beauty: umbrella term for skincare products from South Korea
152
to be listed: andare in borsa
153
sovereign-wealth fund: a state-owned, investing in real and financial assets ...
154
retained earnings: utili trattenuti
155
to nag: assillare
13
4 Social media and digital distribution have led to a greater/smaller fragmentation of the beauty
business.
5 Company heads are looking east/west for development.
6 Italian cosmetic makers spend far more/less on research than their foreign competitors.
TEXT C EXERCISE TWO

1 The expression ‘lipstick effect’ describes the way consumers ease the pain of
recessions by allowing themselves little XXXXX.
2 However, sales in lipstick valley are reported as XXXXX by 13% during the
pandemic recession.
3 ‘Lipstick valley’ is that part of Lombardy where 55% of the world’s XXXXX
is produced.
4 The growth of the over 1,000 companies in the cluster was encouraged by
the beauty trends advertised on the XXXXX media
5 Lipstick Valley also has in its favour the rise of XXXXX Asian shoppers.
6 Ancorotti Cosmetics, a specialist supplying one-fifth the world’s XXXXX,
occupies a former Olivetti factory nearby.
7 The head of Intercos is optimistic about custom coming from XXXXX
brands.
8 The social media and digital distribution have contributed to the XXXXX of
the beauty business.
9 The majority of Intercos sales no longer go to XXXXX firms like Estée
Lauder.
10 A greater percentage of today’s sales go to XXXXX brands and private-label
retailers.
11 Lipstick valley’s successes are also being carefully watched by XXXXX
investors.
12 Will Intercos follow bankers’ advice and XXXXX on the Milan bourse?
ALL TEXTS Consolidation: The sentences are based on all three texts. Fill in the gaps with one
linking word reflecting the meaning of the texts.
1 The Italian chief executives of today are no XXXXX able to react to the
challenges coming from abroad.
2 More specifically, they feel immobilized by XXXXX the Silicon Valley business
model and the new-rich masses in China.
3 Their nostalgia for a more glorious past reflects XXXXX of Don Fabrizio,
expressed so beautifully y in “We were the leopards, the lions.”
4 XXXXX the novel was published, Italy was riding high, in a completely different
situation from today.
5 The Italian economic revival was reflected in many fields, XXXXX car and
computer production to banking and the fashion industry.
6 In contrast the Italian economy of today, XXXXX can be judged by the value
of the stock market.
7 There are only seven of Italian firms listed XXXXX the world’s 1,000 biggest.
8 So XXXXX of the famous family firms have been sold off to foreigners.
14
9 And XXXXX the last six years, a Chinese state company has been the biggest
shareholder in Pirelli.
10 And Yoox Net-a-porter has been bought XXXXX the Swiss.
11 XXXXX Fiat, Campari has moved its legal seat abroad.
12 The market value of Generali, still in Italy, is however XXXXX than half what it
was.
13 One big problem new companies in Italy face is XXXXX to raise money
14 XXXXX is missing in Italy is a venture-capital industry.
15 Was XXXXX a good idea for the government to keep on rescuing Alitalia?
16 Should Giorgio Armani have built a bigger group like XXXXX of LVMH?
17 Many of the most prominent Italian businessmen are now well XXXXX the age
of 80.
18 Enel and the pocket multinationals show that the post-war industrial vigour
XXXXX exists.
19 There is vitality in the Italian economy, XXXXX the number of high-growth
firms indicates.
20 Will the world XXXXX again the old-fashioned skills of the Italian craftsmen?
21 XXXXX did Mario Draghi say about elite privilege?
22 XXXXX did Venice and Amsterdam contribute to their own collapse?
23 How important is Tancredi’s message about things having to change XXXXX
they are to stay as they are?
24 When FM created his Yoox start-up, there was XXXXX selling luxury goods on-
line.
25 The great strength XXXXX Yoox is its back end, with logistics.
26 Net-a-Porter is famous XXXXX its marketing skills.
27 FM wrote his business plan for Yoox XXXXX holding a fulltime job as a banker.
28 He was XXXXX convinced about his innovative project that he left his job.
29 FM stresses that he was an outsider XXXXX needed to find financial backing
for his dream.
30 Marchetti’s key advantage was that he was specialized XXXXX logistics.
31 Already in 2017, his warehouse was big XXXXX to house as many as 5.5m items.
32 Another great Marchetti advantage is the vast bank of retail information,
XXXXX can be used at many levels.
33 Different nations have preferences for different colours, XXXXX the Spanish
going for red.
34 FM is very much aware of the danger of getting lost in data, XXXXX could lead
to wrong choices
35 Data alone cannot give the sociological point of view – the whys of choices.
36 Lauder noted that lipstick is a common pick-me-up XXXXX the economy is
going slow.
37 XXXXX the 2020 Covid recession however, sales in ‘lipstick valley’ fell by 13%.
38 Today, as XXXXX as 552.% of the world’s make-up is produced in ‘lipstick
valley’.
39 XXXXX 2012 and 2017, about 350 cosmetic startups were established in the
Crema area.
40 The majority of the Lipstick Valley companies respond to the beauty trends
published on the social media.
41 Ancorotti, famous for its mascara, has grown XXXXX big it now occupies an
ex-Olivetti factory.
15
42 Intercos nowadays is selling XXXXX to traditional firms than direct-to-

consumer and private brands.
43 Sales of cosmetics in China are expected XXXXX double in the immediate
future.
44 There are also openings XXXXX supplying products for the very successful k-
beauty trends.
SECTION TWO SOUNDS AND SPELLINGS

2.1 Do these words rhyme?
1 power grower
2 labour, sabre
3 wary airy
4 owner loner
5 liar wire
6 dare, rear
7 clown grown
8 wary hairy
9 inn thin
10 arm palm
2.2 Are these words homophones?

1 build billed
2 stare steer
3 mode mowed
4 suit suite
5 lent leant
6 full fool
7 hall haul
8 file phial
9 prayer prior
10 wary weary
2
2.5 Rhyme or no rhyme? Put a tick or a cross
1 aunt with plant

2 pretty with city
3 blue with zoo
4 shone with lone
5 there with wear
6 weight with height
7 road with broad
8 square with are
9 heart with part
10 rough with through
11 flour with tour
12 naked with baked
16
17

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23-24 Unit9 Italianbusiness

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Lingua inglese 6 crediti a.a.

SECTION ONE TEXTS

TEXT A Italy SpA offers an object lesson1 in corporate decline (2020)

How the leopard lost its spots2

TEXT A EXERCISE ONE

TEXT A EXERCISE TWO

17 The government is accused of spending too much on bailing out XXXXX

TEXT B EXERCISE ONE

1 Marchetti launched Yoox with considerable/no experience of the fashion industry.

TEXT B EXERCISE TWO

1 The journalist wanted to interview Marchetti because he is the tech

Text C Down and up in lipstick valley

TEXT C EXERCISE ONE

TEXT C EXERCISE TWO

42 Intercos nowadays is selling XXXXX to traditional firms than direct-to-

SECTION TWO SOUNDS AND SPELLINGS

2.2 Are these words homophones?

1 aunt with plant

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