MILAN — The Italian fashion sector is recovering faster than expected and this should help the industry come out of the pandemic-related quagmire unless the uptick in global COVID-19 cases and the new Omicron variant impose new restrictions.
That was the outlook provided by Cirillo Marcolin, president of industry association Confindustria Moda, on Thursday. According to figures presented by the organization, the sector is expected to close 2021 with revenues up 20.6 percent compared to 2020 to 90.4 billion euros — equaling to a 7.7 percent drop compared to 2019 sales. In 2020, the industry lost 23 billion euros, or 23.5 percent of its revenues.
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“There’s a positive business U-turn across all companies, yet it’s still uneven,” Marcolin said during a Zoom conference call. “I expect recovery to occur quicker and before 2023, but that’s still to be entirely determined,” he offered.
In the first eight months of 2021 ended Aug. 31, exports jumped 26.2 percent versus the same period in 2020 to 42.7 billion euros. That is still 5.1 percent below pre-pandemic levels, despite exports to the majority of international countries increasing in the high-double-digit region.
For instance, 2021 exports to the U.S. and China skyrocketed, up 46.5 percent and 64.6 percent compared to 2020, respectively. After months of lost market shares in Hong Kong, the area grew 19.6 percent, but didn’t return to the 2019 quota.
“Even if we’re witnessing a rebound with spiking interest of Made in Italy products across markets, we are still required to be prudent, as the pandemic is still ravaging Europe,” Marcolin noted.
In the three months ended Sept. 30, according to the interview-based estimates, fashion sales increased 18.1 percent versus the same period in 2020, while orders jumped 21.3 percent.
“Fashion companies are facing multiple challenges,” Marcolin said. “Although we’re leaving the pandemic behind, barring upcoming bad news, the health emergency left a mark on the fashion sector,” he said.
The increased costs for raw materials and energy are causing supply chain woes and according to interviews Confindustria Moda conducted with 300 of its associates, 70 percent of Italy’s fashion companies lamented extra costs and supply snafus and 78 percent of them believe this would impact recovery.
To this end, Marcolin joined others of his peers in claiming that size matters now more than ever.
“Small and beautiful is no longer sustainable, the right size is crucial to keep pressing on,” he said.
The executive didn’t necessarily refer to M&A activities — which are picking up at the top-end of the fashion supply chain in Italy — but to associations and aggregations aimed at providing companies with enough means to better face future challenges and be prepared once the funds from the National Recovery and Resilience Plan are unlocked.
“We are not going to be offering funds indiscriminately, they will be channeled into projects and initiatives aimed at spearheading the digital and sustainable transformation of the sector,” he explained.
Asked about the association’s relationship with Italy’s government helmed by Prime Minister Mario Draghi, he said Confindustria Moda articulated its recent requests around three main pillars, including digitalization, sustainability and education. The latter is at the center of an ongoing debate among institutions and industry representatives, who feel that the education system in Italy is not doing enough to prepare tomorrow’s craftspeople, thus putting Made in Italy at risk.
Those requests were in line with remarks issued this week by the Camera della Moda, which asked Italy’s government to allocate funds and support measures to train employees and to reduce the fiscal pressure on the country’s fashion companies that are committed to support their workers via welfare initiatives.