< Previous1819The Salvatore Ferragamo Group, which has always been a byword of the highest Made in Italy quality, is one of the main players in the lux-ury sector and its origins go back to 1927. The Group mainly creates, produces and sells footwear, leather goods, apparel, silk products and other accessories, as well as perfumes for men and women. The range of products is completed with eyewear and watches which are made under license by third parties in Italy and abroad, with the aim of drawing on local excellences. The Salvatore Ferragamo Group includes Salvatore Ferragamo S.p.A. as the Parent Company and the subsidiaries1 which are consolidated on a line by line basis in which the Parent Company holds, directly or indirectly, the majority of voting rights and over which it exercises control. The subsidiar-ies are grouped into fi ve geographic areas: Europe, North America, Central and South America, Asia Pacifi c and Japan. The Group works constantly to consolidate and increase over time the value of the brand and maintains high quality standards for the products and for the distribution processes through investment in research, product innovation, IT and business support. SALVATORE FERRAGAMOGROUPNUMBERSTHE SALVATORE FERRAGAMO GROUP IN 2017685STORES IN THE WORLD248.5118.6MILLION EURO IN EBITDAmore than 90COUNTRIES OF PRESENCEmore than 4,100EMPLOYEES IN THE WORLDMILLION EURO GROUP NET PROFIT1,393.5MILLION EURO IN REVENUES1 For more information on the Group companies, see the Salvatore Ferragamo Group's Annual Report at 31 December 2017. 2021Sustainability Report 2017HISTORY AND MARKETSalvatore Ferragamo born in Bonito in the province of Avellino.Appointment of Paul Andrew as Creative Director of Women’s Collections.1898192719361923193819471970s1950s19781960s19861995199020061998201120032017After joining his siblings in America, Salvatore Ferragamo opens the Hollywood Boot Shop marking the start of his career as "shoemaker to the stars".The Salvatore Ferragamo Italia set up, producing women’s shoes. Opens the fi rst laboratory in Florence.Salvatore Ferragamo makes the famous Rainbow model for Judy Garland, the year after inventing the patent for the cork wedge heel.Salvatore Ferragamo transfers the shoe laboratory to Palazzo Spini Feroni, which he then bought in 1938 and is still the registered offi ce of the Group.After the death of the Founder, his widow Wanda takes charge at the Company. In 1965 the production of bags starts.In Dallas Salvatore Ferragamo receives the Neiman Marcus Prize for his "Invisibile" sandal.The women’s leatherwear and Ready-to-Wear lines are created. The success is now international and the shop in Florence is visited by celebrities such as Audrey Hepburn and the Dukes of Windsor.Launch of the fi rst men’s Ready-to-Wear collections, men’s footwear, silk and accessories.Creation of Vara, one of the most famous shoes by the Salvatore Ferragamo.Opening of the fi rst DOS in Asia (Hong Kong) and entry into the Asian market.Launch of the Salvatore Ferragamo Fragrances and Eyewear lines.Start of the Ferragamo's Creations collection, a limited production run of some of the most famous shoes made by Salvatore.Inauguration of the Salvatore Ferragamo Museum at Palazzo Spini Feroni, dedicated to shoes and the Company’s history.Creation of the bag with the famous Gancino decorative symbol.Realization of the fi rst Salvatore Ferragamo watches.Salvatore Ferragamo S.p.A. listed on the Mercato Telematico Azionario (screen-based stock exchange) organized and managed by Borsa Italiana S.p.A. First collection of jewelry presented.22NORTH AMERICANo. OF STORES 106EUROPENo. OF STORES 173ASIA PACIFICNo. OF STORES 268JAPANNo. OF STORES 74CENTRAL AND SOUTH AMERICANo. OF STORES 64Considering the whole distribution structure, the Ferragamo Group is present in over 90 countries across the world. At 31 Decem-ber 2017 the Group’s distribution network, consisting of a total of 685 stores, could count on 410 di-rectly operated stores (DOS) and 275 third points of sale (TPOS) in the Wholesale and Travel Retail channel, as well as on its presence in leading Department Stores and top of the range multi-brand Spe-cialty Stores.In 2017, the Group celebrated the reopening of some of the Brand's most representative stores, tes-tifying to its constantly evolving global presence. The boutique in-side the ION Orchard shopping mall, the place to go for luxury shopping in Singapore, reopened in July, offering approximately 290 sqm of footwear, bags and accessories for Men and Women. The boutique has been revamped to highlight the Brand's style. In No-vember, the historic Canton Road Flagship Store in Hong Kong reo-pened with an exclusive night fea-turing celebrities, infl uencers and fans of the Brand. The store's new gorgeous look is a perfect exam-ple of Italian style and craftsman-ship, refl ecting Ferragamo's qual-ity, creativity, and elegance. The attention to detail guided the reno-vation since its early stages, allow-ing the store to obtain the LEED Gold certifi cation-a recognition of energy and water effi ciency, the excellent choice of materials, con-struction work management, inno-vation, and environmental quality. The occasion was marked by the introduction of a special limited edition collection of Women's hand-bags and small leather goods spe-cifi cally designed for the Asian market.2425Sustainability Report 2017RESPONSIBLE MANAGEMENTMEMBERS OF THE BOARD OF DIRECTORS OF THE PARENT COMPANY - 31 DECEMBER 2017MEMBERS OF THE BOARD OF DIRECTORS• OF WHICH EXECUTIVE• OF WHICH INDEPENDENT30 - 50< 30-2111324> 50TOTSalvatore Ferragamo S.p.A.'s Cor-porate Governance system com-plies with the principles of the Corporate Governance Code for listed Companies issued by Borsa Italiana S.p.A. The main corporate governance body is the Board of Directors, which has the primary responsibility for determining and pursuing the strategic objectives of the Company and of the Group. The current Board was elected by the Shareholders’ Meeting on 24 April 2015 according to the single list submitted by the major-ity shareholder Ferragamo Finan-ziaria S.p.A., except for Eraldo Poletto, who was appointed by the Shareholders’ Meeting on 27 April 2017 after being co-opted by the Board on 2 August 2016. On 24 April 2015 the Shareholders’ meeting also nominated Wanda Mi-letti Ferragamo as the Honorary President, by way of recognition for the exceptional work she has done for the company over the years. The Board of Directors has also set up three advisory board committees: the Nomination and Re-muneration Committee, the Prod-uct and Brand Strategy Com-mittee and the Control and Risk Committee.Following the amendments to the Corporate Governance Code for Italian listed companies, the Board of Directors of Salvatore Ferraga-mo S.p.A. decided to delegate the following powers to the Group's Control and Risk Committee:• Support, with suitable inquiries, the assessments and decisions of the Board of Directors relating to the management of risks deriv-ing from unfavorable events and facts which the Board has be-come aware of, including the risks which may be important in terms of sustainability (e.g. reputational risks) in the medium/long-term for the Company’s business.• Supervise sustainability issues connected to the exercise of the business undertaken by the Company and its interaction with all stakeholders. Concerning risks, the Salvatore Ferragamo Group adopts an En-terprise Risk Management (ERM) model to support top management in identifying the main business risks and how to manage them, as well as organizing the relevant con-trol system. The system adopted envisages: updating of the map-ping of risks, identifi cation and as-sessment of the risks and controls adopted to contain them before defi ning the opportune monitoring and operating strategies. Specifi -cally, below are the macro-catego-ries of risks and the main impacts in terms of sustainability:• Market and strategic risks, in other words risks relating to the general and/or specifi c macro-economic trends on the markets where the Group operates. As part of this category, the main im-pacts in terms of sustainability are connected to internal and external events which could impact on the Brand’s image and reputation; • Operating risks connected to typical processes, which include both external risks, such as those relating to the abuse of intellec-tual property rights, and internal risks related to the organizational structure, processes and systems adopted by the Group. The main impacts in terms of sustainability are connected largely to safety and customer satisfaction, includ-ing product quality, health, safety and the quality of workers’ profes-sional life and the value chain; • Financial risks, in other words those risks which impact directly on the economic result and the value of the Company’s assets and which are mainly connected to external factors. The impacts in terms of sustainability are con-nected to the economic-equity per-formance and the systems adopt-ed for the reliability, timeliness and completeness of fi nancial report-ing, as well as the involvement of stakeholders and the market gen-erally and transparent information in their regard;• Compliance risks connected to the failure to comply with laws and regulations to which the Salva-tore Ferragamo Group is subject. As far as sustainability within this category is concerned, the Group has adopted an Organization, Man-agement and Control Model pursu-ant to Italian Legislative Decree 231/2001 and a Code of Ethics as well as implemented an Anti-Corruption Policy, and is current-ly preparing a Supplier Code of Conduct.Specifi cally concerning social top-ics, the Group monitors the risks associated with the supply chain, the local community and occupa-tional health and safety. It con-stantly monitors and regularly evaluates the adequacy of the procurement model and the sup-ply chain as well as compliance with Made in Italy labeling require-ments and OSH regulations in terms of impact and probability of occurrence. With reference to environmental risks, on the other hand, the Group constantly com-plies with the environmental law and the risks which stem from the activities, products or services over which the organization has the power of direct control, for example concerning emissions re-leased into the atmosphere, ener-gy and water consumption, or over which the organization has only the power of infl uence. In the broader context of the Group's Compliance risk, the Group is strongly com-mitted to fi ghting corruption and bribery. The same applies to em-ployee-related matters and the re-spect for human rights: the Group considers its human capital to be crucial, and is committed to maxi-mizing people's potential at each step of the production chain while constantly monitoring risk factors.In order to mitigate the probability and impact of the occurrence of such risks, the Group has put in place numerous controls linked to creating value from the local ter-ritory, responsible communication and marketing, respect of human rights in the supply chain and the promotion of integrity and ethics in business. Specifi cally, the Group has a specifi c procedure in place for the accreditation, qualifi ca-tion and certifi cation of suppliers and workshops, performs audits on the supply chain, and, in 2017, set out on a path to preparing and implementing a Supplier Code of Conduct. In addition, the Parent Company has adopted an OHSAS 18001 Occupational Health and Safety Management System for all the Company's Italian offi ces and stores as well as an Organization, Management and Control Model pursuant to Italian Legislative De-cree 231/2001 that governs the administrative liability of legal en-tities. The latest version of the Model was approved by the Board of Directors in March 2017 and adopted by the subsidiary Ferrag-amo Parfums SpA, after making the necessary changes. The goal is to prevent managers or the people that either report to or are super-vised by them from committing the offenses set out in the Decree in the interest or for the benefi t of the Company. The Group has set up a Supervisory Body with inde-pendent powers of initiative and control, which is responsible for supervising the implementation of, and compliance with, the Model as well as constantly updating it. To raise awareness of the Model and its guiding principles, the Parent Company offers training sessions for all employees. The Salvatore Ferragamo decided to formalize its care and attention for its own people in the Company Regulation that sets out the principles under-lying the employment relationship as well as the main rights of Fer-ragamo employees.The Group's Code of Ethics, which was updated in 2016, outlines the standards of ethics and con-duct, including the protection of employees’ health and safety, the environment, Made in Italy prod-ucts, the social value of the com-pany, and the centrality of human resources. On the one hand, the Group encourages everyone to spontaneously share, comply with, and disseminate the Code of Eth-ics; on the other hand, it requires everyone operating on behalf of the Salvatore Ferragamo Group or making contact with the Group to abide by and apply the Code, also envisaging the application of disci-plinary and contractual sanctions in the case of violation. In 2017, the Group adopted an Anti-Corruption Policy modeled af-ter global best practices and com-pliant with the highest standards. This Policy formalizes the strong commitment to combating corrup-tion, rejecting it in any context or form, setting out the principles, rules of conduct and necessary control mechanisms to prevent any possible incident of corrup-tion. The Policy has already been adopted by the Parent Company and is applicable to all subsidiaries, which will amend it based on local legal and organizational require-ments. It is possible to report any failure to comply with the Code of Ethics and internal procedures, including the 231 Model and the Anti-Cor-ruption Policy, as well as applica-ble laws and regulations, through dedicated channels such as the whistleblowing system, which cov-ers the entire Group. All employ-ees can use this tool to submit a report, either anonymously or not, with the utmost confi dentiality and privacy. The Ethics Committee ex-amines and investigates all com-plaints received to assess whether they are legitimate and take action as it sees fi t. 2627Tradition and innovationSuppliers and contract manufacturersCustomer focusMADE IN ITALYQUALITY2829Sustainability Report 2017MADE IN ITALYQUALITYTRADITION AND INNOVATIONnew ModelleriaOPENED IN NOVEMBER 201794%OF LEATHER HIDES PURCHASED FROM ITALIAN TANNERIESmore than 268,000COUNTERFEIT PRODUCTS SEIZED BY CUSTOMS OFFICIALS IN 2017+50.2%FOLLOWERS ON INSTAGRAMmore than 350PATENTS AND TRADEMARKS+ 32.4%REGISTRATIONS FOR THE E-COMMERCE NEWSLETTER COMPARED TO 2016THE SALVATORE FERRAGAMO GROUP IN 2017Since 1927, Salvatore Ferraga-mo has been a byword for Made in Italy craftsmanship, creativity and innovation. As an essential value that underlies every crea-tion, quality has always been part of the company's DNA, helping the Brand spread and become acknowledged all over the world.Salvatore Ferragamo has been a pioneer in exporting Made in Italy quality and the whole Group has always been interested in develo-ping and passing on the founda-tions of Italian craftsmanship. It is not just a question of manual skills, but also of experience, utmost care and attention to detail, while con-stantly researching for new mate-rials and technologies to be incor-porated into a handmade, sophisti-cated and contemporary product, in line with the Founder's creative principles. Each product stands out for its original design, the atten-tion to the manufacturing process and its strong ties with the world of culture, art and cinema. Relentlessly pursuing innovation is a key value for the Group, rooted in Salvatore Ferragamo's legenda-ry creative talent. The patent Ar-chive of the Founder has over 350 patents and trademarks, which at the start of the 21st century were collected in the Patent Fund of the State Central Archive, thus holding a technical and scientifi c know-how of inestimable value. The Founder's restless creativity is refl ected in the massive amount of ideas he patented over the ye-ars, such as the shell-shaped sole, the wedge, the sculpted heel, the invisible upper, the cage heel and the metal sole. To this day, the Archive represents a source of innovation and inspi-ration for new creations, allowing to pass on Salvatore’s ideas and technical expertise to new genera-tions of creative talents.3031Sustainability Report 2017The attention and passion for ma-terials have always characterized Salvatore Ferragamo's heritage: many of the Founder's most fa-mous creations are products of his time and clearly show he was sen-sitive to the economic and manu-facturing changes that swept Italy in the 20th century. To strengthen the sole of his shoes during the autarky of the 1930s, Salvatore Ferragamo had the brilliant idea of using cork and created the wedge, one of the fashion industry's most revolutionary and enduring inno-vations. This is the same reason why he carefully selected and con-stantly experimented with not only exclusive types of leather, but also the most humble and unusual kinds such as fi sh skin, used in some of the Brand's most iconic models. Following the death of his Founder, the Group has consolidated the tradition of experimenting with sus-tainable and alternative materials by setting up a dedicated function, to constantly update the materials used, placing a special emphasis on environmentally sustainable ones.On 22 April 2017, the Salvatore Ferragamo Group celebrated Earth Day by introducing the Women's ap-parel capsule collection developed together with Orange Fiber, the in-novative startup founded by two young Sicilian women that creates textiles from citrus juice byprod-ucts. Orange Fiber recycles these byproducts to create a sustainable material that refl ects the Group's values of creativity, innovation and environmental sustainability. The Salvatore Ferragamo Group was the fi rst to introduce a capsule col-lection featuring Orange Fiber's textile, whose products were glam-ourized by the work of the Archi-tect and designer Mario Trimarchi, winner of the 2016 Compasso d'Oro award who created exclusive Mediterranean-inspired prints. Dur-ing 2017, Ferragamo and Orange Fiber's partnership was on display on several occasions, including the Taormina Smart project, as part of which the innovative textile and the pieces of the collection were presented to the First La-dies that attended the G7 summit held in Taormina in May. In addi-tion, some pieces were displayed in the Smart Wardrobe area of the Première Vision Smart Square at the Première Vision Paris trade show held in September, as well as in the exhibition The Fabric of Cul-tures: Systems in the Making at New York's Queens College, held between October and December. The interest and attention gener-ated by the partnership with Or-ange Fiber have further strength-ened the Salvatore Ferragamo Group's commitment to promoting young talents and innovating in the fi eld of the circular economy. The partnership with Orange Fiber was also presented at the Green Carpet Fashion Awards, the event organized by the Italian Chamber of Fashion (CNMI) and Eco-Age, com-bining glamour and sustainability. For the exclusive event, the Sal-vatore Ferragamo developed a green look made with GOTS-certi-fi ed silk organza and Orange Fiber textiles, which were used also for the shoes and the bag. The top model Karolina Kurkova wore the look during the event held in Sep-tember at Milan’s Teatro La Scala, which featured several Italian and international fashion and luxury leaders.As part of its efforts to support young talents, in October 2017 the Company was selected as a best practice for its sustainability activities in the H&M Foundation's “The Accelerator” program, also meeting the winners of the Global Change Award 2017, which cel-ebrates the most interesting pro-jects in the fi eld of sustainability and circular economy.The Group has always been working with organizations com-mitted to research and experimen-tation, acknowledging the impor-tance of raising the awareness of its creative teams about the use of sustainable, innovative and high-quality materials. Therefore, in Oc-tober 2017 the Group held an in-teractive workshop on sustainable and innovative materials in part-nership with Made By for its style, production and material research teams, to promote a culture of sus-tainability and stimulate their inter-est in new materials. In addition, in December 2017, C.L.A.S.S. held the Workshop “From Sustainability to Circular Economy: A brand new dimension for fashion values” for the Salvatore Ferragamo's style team, exploring the wide range of opportunities offered by the circu-lar economy in the textile industry.During 2017, the Company ac-tively participated in several con-ferences and academies set up to start a conversation about sustain-ability with Italian and international fashion leaders. Among others, the Salvatore Ferragamo participates in the Sustainable Luxury Acad-emy organized by Milan's Polytech-nic University in partnership with Mazars International. The Acad-emy's goal is to discuss and iden-tify the next steps required to com-pletely embed sustainability into the luxury industry's supply chains. In May 2017, the Salvatore Fer-ragamo participated in the Istituto Marangoni Advisory Committee (or IMAC) project, which brought to-gether public fi gures and experts from the fashion and academic world to discuss sustainability in fashion. 32SUPPLIERS AND CONTRACT MANUFACTURERS2 2 The reported data and information refer exclusively to suppliers related to production process.Made in Italy, style and elegance: these are the qualities that have always characterized the Salva-tore Ferragamo Group's products. Staying true to these values, the Group has always been commit-ted to supporting the development of local communities, promoting Italy's world-class manufacturers and carefully purchasing products and services almost exclusively from Italian suppliers. The philoso-phy of the Founder, who always remained deeply connected to his roots, still lives on in the strategy of the Group, which relies on a wide network of carefully selected and qualifi ed workshops known for their outstanding craftsmanship. Many of them have been working with the Salvatore Ferragamo for years now. To deliver a quality product as well as to make production and distri-bution more effi cient and fl exible, the Salvatore Ferragamo Group pays special attention to the key stages of the supply chain, limit-ing subcontracting to only one tier in order to better monitor quality throughout the supply chain. Simi-larly, the Group directly manages the product development and in-dustrialization stages as well as performs quality and safety con-trols, both at the start and at the end of the manufacturing process, on the whole production.When selecting suitable suppliers, the Group places special empha-sis on the technical assessment of raw materials, semi-fi nished and fi nished products as well as the acquisition of documents concern-ing manufacturing plants and, in some cases, it follows up with a visit to the premises. Furthermore, the new potential partners must fi ll out specifi c forms for the pur-poses of the Register of Suppliers and Workshops of Raw Materials or Finished Product, accept the Code of Ethics, consent to the process-ing of personal data, submit a cer-tifi cation of compliance with social security, welfare and occupational safety regulations, a self-certifi ca-tion concerning occupational health and safety, the acceptance of the subcontracting policy, the accept-ance of the trademark protection agreement, and the REACH self-certifi cation required by the Euro-pean Union to ban the use of haz-ardous substances in manufactur-ing processes.The Group recognizes the impor-tance of manufacturing and selling products which conform, in terms of chemical security, to the laws in force on global markets, in order to protect the health of workers and consumers as well as reduce the environmental impact from manufacturing and throughout the product's life cycle. The Europe-an Chemical Safety framework is based on the REACH Regulation, which bans the use of hazardous substances in manufacturing pro-cesses. For these purposes, en-vironmental and toxicity tests are conducted on several components and fi nished products such as ac-cessories, footwear structures, leather, textiles, leather goods, ready to wear, PVC shoes and rub-ber soles, by selecting collaborators exclusively among certifi ed raw materials suppliers. Since 2016, the Salvatore Ferragamo Group has been addressing the topic of chemical substances by submitting its Restricted Substances Lists (RSLs). The Group has shared these voluntarily prepared lists with all its suppliers to eliminate or limit the use of certain substances in production processes and will up-date them in the future.3435Sustainability Report 201799.5%OF ACCESSORIES PURCHASED FROM ITALIAN SUPPLIERS94%OF LEATHER HIDES PURCHASED FROM ITALIAN TANNERIES99.4%100%OF OTHER RAW MATERIALS PURCHASED FROM ITALIAN SUPPLIERSOF TEXTILES PURCHASED FROM ITALIAN SUPPLIERSYEARS OF PARTNERSHIP CONTINUITY WITH SUPPLIERS BY SECTOR - 201722%25%25%21%41%50%21%40%22%17%25%26%15%8%29%13%Non-consecutive1-3 years4-10 years≥11 yearsFootwearAccessoriesApparelHandbagsand suitcasesYEARS OF PARTNERSHIP CONTINUITY WITH CONTRACT MANUFACTURERS BY SECTOR - 20173%8%2%27%5%27%19%33%13%33%100%23%19%40%33%27%47%54%25%27%35%JewellerySmall leather goodsHandbags and suitcasesApparelAccessoriesFootwearNon-consecutive1-3 years4-10 years≥11 yearsSUPPLIERS IN FIGURES - 2017In order to guarantee the essen-tial quality of the Brand’s prod-ucts, the Salvatore Ferragamo Group uses a specifi c selection process for suppliers and con-tract manufacturers, aimed at assessing whether the potential new partners have the technical, qualitative, economic and fi nancial prerequisites and all the documen-tation and certifi cation required to start collaborating. The Group relies on a procurement structure with a high level of technical prep-aration and works with historic companies, with which it has es-tablished an ongoing collaboration. In this context, the Group remains deeply rooted to the local commu-nity: considering the geographical distribution by company name of exclusively suppliers related to production, Italian entities account for as much as 97.2% of suppliers’ turnover. As for the procurement of raw materials, the Group buys approximately 113,000,000 dmq of leather and nearly 1,161,000 m of textiles.The Salvatore Ferragamo Group works exclusively with highly special-ized manufacturers that meet the most demanding quality standards. Virtually all of them are located in Italy. The selection and retention of external contract manufactur-ers is key to the Brand, mainly for the purposes of maintaining the world-class quality standards of its products as well as protecting Ferragamo's extensive know how developed over the years. The retention of external manufactur-ing facilities has been traditionally guaranteed by ongoing partner-ships, the frequent exchange of information and skills between the Group and the contract manufac-turers and the highly specialized products and production process-es involved. This integration is sup-ported by an IT system that con-nects the vast majority of contract manufacturers with the Group. This allows both parties to track the progress of production and logistic processes, check whether raw materials are in the contract manufacturers’ stock, and, most importantly, effectively plan the production stages as well as the procurement of raw materials and components.In addition to this, by entering into trademark protection agreements, the Salvatore Ferragamo Group reduces the risk that external contract manufacturers might sell the Brand's products to third par-ties. These manufacturers must disclose if they work with any subcontractor, to which they can outsource different production processes as long as these are performed directly, in accordance with the policy limiting subcon-tracting to just one tier. In addition, the Group constantly monitors man-ufacturers as well as subcontrac-tors through inspections performed by technical and production staff.3637Sustainability Report 2017GEOGRAPHICAL BREAKDOWN OF ITALIAN CONTRACT MANUFACTURERS BY SECTOR - 201767%93%81%35%40%36%4%3%4%36%8%5%2%3%4%20%6%8%8%8%4%15%27%3%3%10%6%33%2%13%5%2%6%JewellerySmall leather goodsHandbags and suitcasesApparelAccessoriesFootwearTuscanyCampaniaEmilia RomagnaVenetoMarcheLombardyUmbriaPiedmontOther RegionsAmong the Salvatore Ferragamo Group core values are corporate ethics and the promotion of the principles of loyalty, fairness and respect, both within the organiza-tion and when dealing with busi-ness partners. In accordance with the Group's Code of Ethics and to embed corporate social responsi-bility into day-to-day operations, the Group values collaborating with the supply chain to achieve the highest ethical and sustainable development standards. To this end, the Group decided to adopt its own Supplier Code of Conduct, setting out the standards of ethics and conduct that, along with legal, regulatory and procedural provi-sions, must govern the Group's business relations with its part-ners. The Code includes rules and standards of conduct concerning business ethics and integrity, la-bor and human rights, the respect for the environment and product responsibility. The Supplier Code of Conduct was prepared during 2017 and will be shared in 2018 with all the Salvatore Ferragamo Group's suppliers of raw materials, processing services and fi nished goods.To uphold corporate social respon-sibility within the supply chain, since 2014 the Salvatore Ferrag-amo Group has been performing audits on subcontractors. These audits, based on a multi-year plan and handled by external special-ists, seek to ensure the respect for human rights and workers as well as compliance with occupa-tional health, safety and hygiene standards. The audit process in-volves a number of stages. First, the subcontract manufacturers are required to fi ll in a pre-assessment survey; then, an on-site audit is carried out by interviewing both employees and the management. Based on the audit fi ndings, the Group prepares an improvement plan with the subcontract manu-facturer to prevent, mitigate, or remedy non-compliance. The plan requires implementing specifi c ac-tions in a given timeframe agreed to by the parties, as well as clearly identifying an accountable person in the supplier organization. Since 2014, the Group has conducted over 150 audits and more than 70 follow-ups. In November 2017, it launched a new cycle of audits on the following product categories: Women's Footwear, Men's Foot-wear, Leather goods, and Ready-To-Wear. Also during 2018, the Salvatore Ferragamo Group will be committed to continuing this moni-toring, in order to guarantee re-sponsible management of its sup-ply chain in compliance with the laws in force. Once again in 2018, the Group audits will be performed on the following product categories: Women's Footwear, Men's Footwear, Leather goods, and Ready-to-Wear.Concerning Footwear production, the Group has always relied on a small prototyping and manufac-turing unit comprising of materials cutters, stitchers and fi tters: the Manovia division. Established in 1967, the Manovia mainly creates samples and prototypes as well as fi ne-tunes the structures (stretch-ers, heels, insoles and soles) for new models. It consists of approxi-mately 20 people, mostly young, who produce 30 to 40 pairs of shoes a day. In addition, the Manovia manu-factures limited edition models that are part of the Ferragamo's Creations collection. Launched in 2006, the Ferragamo's Crea-tions line consists of new edi-tions of original shoes included in the Historical Archive and the Salvatore Ferragamo Museum.The models are manufactured in limited and numbered quantities. They are made entirely by hand using the techniques, materials and fi nishing details of the Founder. All Ferragamo's Creations shoes fea-ture the Brand's historic logo, de-signed by Lucio Venna in 1930 and provide the opportunity to explore Salvatore Ferragamo's creative tradition, celebrating his pioneering vision and know-how.In November 2017, the Group launched a renewed Modelleria division for Men's and Women's Leather goods: this approximate-ly 1,200 square meter lab where craftsmanship and research meet, designed to pass the know-how of master leather craftsmen on to young talents. With this invest-ment, the Company has created a state-of-the-art workshop that celebrates the world-class tech-nical skills and creativity of the people that research materials, create the style and make the Ferragamo product. Staying true to its tradition and craftsmanship, the Group wants to celebrate the “Ferragamo touch” in the world of Leather goods, with infi nite possi-bilities for testing innovative types of leather and materials during the processing stages as well as im-proving the quality and effi ciency of development processes. Together, Manovia and Modelle-ria are fundamental for preserv-ing the know-how, legacy of its Founder, nowadays upheld by the skilled artisans of the Salvatore Ferragamo Group. Next >