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SustainabilityFeature

“So very few luxury brands in Switzerland joined the front lines. It’s shocking.”

After going all-out against the coronavirus during the pandemic, Jean-Christophe Babin, CEO of Bulgari, explains the brand’s future social and environmental commitment and responds to criticisms about over-mediatization in times of crisis.

Cristina D’Agostino

By Cristina D’Agostino07 juillet 2020

Know how and make it known. For Jean-Christophe Babin, CEO of Bulgari for seven years, times of crisis are no time to abandon this motto. While staying its course with patronage and business activities, the Italian brand has also taken to manufacturing hand sanitizer, donated a microscope, activated an anti-virus fund, and also taken flak for being all too visible. Undaunted, Babin has in the meantime announced the creation of a new Bulgari hotel in Rome, an investment to the tune of 100 to 150 million Swiss francs. Interview.

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Jean-Christophe Babin, CEO of Bulgari (DR)

You recently held a digital conference about Bulgari's social and environmental commitment, and announced the launch of the Virus Free Fund. Can you tell us more about this and how much money is being raised?
The extent of COVID-19’s impact on society is unprecedented. Bulgari’s early involvement, going back all the way to February, in the collective efforts to stem the epidemic was based on information received from our Chinese team at the beginning of the year. When basically nobody in Europe had even started to talk about it, we were already monitoring the situation closely. We contacted the Spallanzani Research Institute in Rome, and they confirmed that they were working on COVID cells. We sprung to action, donating a 3D microscope that they needed. Of course, it was something that the Italian government could have done, but at the cost of lengthy administrative procedures. We were able to act without delay. During discussions, we understood the urgency of stepping up our efforts and moved to stage two: the conversion of our perfume factory into a hand sanitizer manufacturing facility, which we made available first to the Italian Ministry of Health in order to safeguard healthcare personnel, and then we extended our reach to the Swiss cantons, starting with Neuchâtel, and eventually all the way to England.

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About sixty Bulgari employees went to work to produce gel, on the front line

To what extent have you been personally involved?

I picked up the phone and called the Italian Minister of Health, then his British counterpart, the Secretary of State for Health Matthew Hancock - the equivalent of Swiss Federal Councilor Alain Berset, to whom I proactively offered 600,000 pocket-sized bottles. This initiative has gradually brought us closer to the scientific world. And it also helped us understand one thing: our Save the Children action, which has long been focused on education, cannot be truly coherent without first and foremost tackling health.

Are you still producing sanitizing gels for other continents in need, like Africa?

No, production has stopped because the shortage in Europe has ended. As for distribution in Africa, because the continent is so fragmented at the legislative level, the landscape much more complicated than the European one in terms of sanitary regulations and products.

What was the cost of this exercise for Bulgari?

Bulgari's efforts against COVID amounted to several million euros, at a time when there was little money coming in, as all markets were shut down. As a private company in the luxury sector, our contribution is by far the largest, on the same order of magnitude as the LVMH group as a whole. Dior covered France and Bulgari covered Italy, Switzerland and England. I decided to do it myself, and to inform the group later.

You have been very busy on the media scene giving various speeches during the pandemic. To some, it was about compensation. What is your reply?

When we deal with issues as serious as COVID-19, the question is not so much about cutting losses, it’s about “going all-in or not at all”. It's easy to criticize, when no company in the luxury sector in Switzerland has done a thing…

Some have acted without going public about it…

Perhaps that is because their effort was minimal... The truth must be told! I don't know of any Swiss company – and yet they carry a lot of weight - that has spent millions, let me stress this, millions, to fight COVID. This is truly shocking! At Bulgari, an Italian-Swiss company, we did the exact opposite on Italian soil. Practically all Italian luxury brands participated in the national effort, we all joined the front line. From Ferrari with respirators, to Gucci with masks, or Zegna with medical gowns, we all contributed to the collective effort, even though the financial situation was dire. It was a great moment of national unity. This did not happen in Switzerland. To those who criticize, I ask: “What did you do?” In 99% of cases, the answer is “Nothing.” At best they signed a small check, easy as pie, taking no risk at all. Let me remind you that our factory is based in Crema, the epicenter of the Italian pandemic and every day, about sixty employees went to work to produce gel, on the front line. This is genuine commitment and philanthropy, which reflects on payroll numbers too. For example, out of 5,000 Bulgari employees, 500 went to refugee camps as part of our Save the Children initiative. And that was not a vacation.

Is this a long-term commitment?

Yes, even though we knew that COVID was not going to be our only concern. Finding a universal antiviral is another goal we're willing to support. I called Oxford University, along with Rockefeller University and the Spallanzani Institute, to propose funding a dedicated short-term research project on the COVID-19 vaccine and PhD scholarships for top students at Oxford and Rockefeller in this area. All this adds up to a few million euros, which together with the one hundred million we have been donating to Save the Children for several years adds up to real money, and shows our long-term commitment.

But there is something else that we can do to benefit a hard-hit economy. And today is the first time I’m talking about it: Bulgari has just signed a contract to open a new Bulgari hotel in Rome, the Eternal City, a place that is vital for the brand, by 2022. Rome needs patronage, but also major projects that can boost the economy. We are investing 100 to 150 million euros in a historic site, Piazza Augusto Imperatore, that will provide the city with a crown jewel for its luxury hotel industry. Of course, we entrusted the architectural design to an Italian firm, Antonio Citterio and Patricia Viel. The building belongs to Edizione Property, but the contract is very long-term.

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The new Hotel Bulgari Roma will be inaugurated in 2022 in Piazza Augusto Imperatore. An investment of 100 to 150 million euros (DR)

Labor represents another investment: when the phase of reduction in working hours is over, will you will have to downsize your headcount?

We are doing everything we can to ensure that this does not happen in watchmaking. In jewelry, as manufacturing integration is weaker, Bulgari can activate subcontractors as leverage depending on market cycles. Having said that, we have protected our subcontractor network during the crisis by ensuring a constant workflow, while compensating 75% of the salaries of Bulgari employees working reduced hours, whereas in Italy government subsidies are only covering 35% of the salaries on average.

How has the market recovered?

In Northern Europe, we are practically back to last year’s levels, but the southern countries that rely more on tourism have been impacted more seriously. In China, growth in June is in triple digits compared to June 2019. That's our historical record, but we obviously have to put it in perspective considering that the Chinese are now purchasing at home instead of going abroad.

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