Measuring the distribution economy

What "distribution" means in Ticino

The word distribution covers several business models that share a location and a workforce but differ in law. The first is the principal or entrepreneur company. It buys finished goods from group or third-party manufacturers, owns them while they are stored, bears the inventory and market risk and resells them to group distributors or wholesale customers in many countries. Luxury Goods International in Cadempino was the best-known example of this model in Ticino. The second is the logistics service provider, which does not own the goods and earns a fee for storing, picking, labelling and shipping them on behalf of a group company or a third party. The third is the trading company in the narrow sense that Chapter F.I describes for steel, metals and agricultural commodities. Its goods often never touch Swiss soil, and the Swiss balance of payments records the business as merchanting. The fourth is the regional headquarters, which manages brands, design, sourcing, finance and human resources for a European or worldwide market and may or may not own the goods. The large groups that settled in the Mendrisiotto often combined several of these functions in one company or in a cluster of related companies. A single site could be at once a warehouse, a purchasing office, a design studio and a booking centre for sales.¹

The distinction matters because tax law, customs law and statistics treat each model differently. A principal company earns the residual profit of the value chain if it really performs the functions and controls the risks that justify that profit. A service provider earns a cost-plus fee and has little to defend before a foreign tax authority. A merchanting company may be invisible in the customs statistics because its goods do not cross the Swiss border. A principal company with a warehouse in Ticino appears in the import and export figures twice for the same handbag. The regional headquarters, finally, is a matter of employment and substance whose tax position depends on whether it is remunerated as a service company or as an owner of intangible assets. When the Italian prosecutors in Milan examined LGI after 2017, the core of the dispute was whether the Swiss company was a principal with real substance in Ticino or an extension of the Italian group in Florence.²

The official statistics

No official statistic counts the Fashion Valley as such. The Ufficio di statistica del Cantone Ticino (USTAT, the cantonal statistical office) classifies enterprises by the general classification of economic activities (NOGA). This classification separates the manufacture of textiles, clothing and leather goods (NOGA 13 to 15) from wholesale trade (NOGA 46) and from transport and storage (NOGA 49 to 53). A luxury group's Ticino entity appears in one of these classes according to its main activity, which may be wholesale trade for a principal company, storage for a logistics provider or management consultancy for a headquarters. According to the USTAT survey of economic sectors published in February 2019, the manufacture of textiles, clothing and leather goods counted 175 enterprises with 2,228 employees in 2016. This corresponded to 1,998 full-time equivalents and 1.0 per cent of cantonal employment.³ The standardized median gross wage in this sector was CHF 3,331 a month in 2016, and of its workforce 1,493 persons, about two-thirds, were frontalieri in 2017.⁴

The weight of wholesale trade is more visible. USTAT presented the first results of the new federal enterprise statistics (STATENT) in 2014. Wholesale and retail trade together employed 26,928 full-time equivalents in Ticino in 2012, or 15.4 per cent of cantonal employment, against a national share of 13.4 per cent.⁵ The difference of two percentage points is the statistical trace of a specialization in trade that includes the fashion groups, the commodity traders of Lugano and the shopping tourism of the border. It cannot be attributed to any single cluster without further analysis, and USTAT has not published a series that isolates the fashion trade from other wholesale activities.

Notes

1. Merchanting is treated in Chapter F.I. ↩
2. Money.it, "Gucci: chiusa inchiesta su presunta evasione fiscale" (28 November 2018), https://www.money.it/Gucci-chiusa-inchiesta-evasione-fiscale (Gucci described the matter as one of transfer pricing, the prosecution as a hidden permanent establishment). ↩
3. Silvia Walker, I comparti economici. Struttura ed evoluzione del tessuto economico ticinese (Ufficio di statistica, Giubiasco, February 2019), section on NOGA 13–15, https://www3.ti.ch/DFE/DR/USTAT/allegati/volume/schede_comparti_2019.pdf. ↩
4. Walker, I comparti economici (above). ↩
5. Oscar Gonzalez and Eric Stephani, "La nuova Statistica strutturale delle imprese (STATENT)", Dati – Statistiche e società (September 2014), https://www3.ti.ch/DFE/DR/USTAT/allegati/articolo/2047dss_2014-2_6.pdf. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.