Sales of Italian Fashion Jump 22.6 Percent in 2021, but Geopolitical Instability Looms

MILAN — The Italian fashion sector is on monitor for a entire restoration, as instructed by the much better-than-envisioned 22.6 % leap in 2021 profits when compared to 2020. But rising stress on the base line from enhanced raw material and vitality expenditures, as perfectly as the Russian-Ukrainian conflict dampening purchaser assurance and steadiness, are looming.

That was the outlook offered by Cirillo Marcolin, president of industry association Confindustria Moda, on Thursday. In accordance to figures introduced by the group, the sector posted revenue of 91.7 billion euros last 12 months, an improve of 16.7 billion euros on 2020 but continue to 6.3 p.c underneath 2019 revenues.

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“Data recommend that the manner technique is out of the pandemic-relevant quagmire, with some sectors even improving upon in contrast to 2019,” together with jewelry and eyewear, Marcolin mentioned.

A very similar trend was highlighted by Sistema Moda Italia, the consortium of Italian trend and textile corporations, which posted revenue of 52.9 billion euros in 2021, up 18.4 p.c as opposed to the yr prior.

Confindustria Moda stated exports of Italian vogue products jumped 23.5 per cent previous calendar year to 67.5 billion euros, with France, Germany, China and the U.S., between the ideal-accomplishing importers.

Standard manager Gianfranco Di Natale highlighted how the U.S. showed “impressive acceleration” when compared to mainly flat advancement above the previous two a long time. At the very same time, exports to the U.K. decreased 10.2 p.c very last calendar year, signaling the affect of inflation on client use there.

Even though figures for the first quarter of 2022 were even now currently being gathered, a study carried out amongst its associated firms permitted the team to forecast that like-for-like sales will boost 19.3 % in the quarter. “The pattern in the 1st quarter has exceeded our expectations and proved our firms were being resilient and a top drive of the Italian economic system,” Marcolin explained.

The exact survey highlighted an envisioned slowdown in income progress for the 2nd quarter, when the influence of the Ukrainian conflict is being felt a lot more broadly and product sales should maximize 12.9 percent on a similar basis.

“There are shadows on the horizon, together with the Russo-Ukrainian conflict, which leaves us devoid of apparent solutions on future potential clients, as properly as a quantity of difficulties this sort of as strength and uncooked elements expenses, that are impacting the sector as a complete,” Marcolin mentioned.

According to Confindustria Moda, exports to Russia and Ukraine amounted to 1.72 billion euros in 2021, symbolizing 2.5 % of total exports and down 3.1 percent versus 2019.

Whilst Marcolin contended that the sector’s over-all exposure to the location is moderate, he underscored how some districts and product or service groups are significantly afflicted by halted company.

The renowned footwear hub in the Marche location, as very well as garment producers in Veneto, are amongst the most pressured. Confindustria Moda approximated that 3 % of Italian manner organizations make more than 50 p.c of revenues in Russia and 11 % amongst 10 and 50 p.c.

“We have normally supported the institutions and the governing administration on sanctions since we firmly think that they can assistance spearhead a peace deal,” he mentioned. “The context is specially advanced ideal now, and irrespective of figuring out that sanctions are impacting some of our associated providers, we cannot assistance but sympathize with influenced populations living a humanitarian disaster.”

Nonetheless, the ripple influence of the war is becoming felt across the sector, impacting costs and denting client self esteem globally. According to the survey conducted by the firm, 49 p.c of manner enterprises be expecting second-quarter income to continue to be flat versus the earlier quarter, when 43 percent of them forecast a deterioration in their general performance.

The conflict, as very well as the stop-and-go lockdown approach in China, “pose the hazard of vanishing the publish-pandemic rebound, with a potential disastrous effect for our firms,” Marcolin said.

To this end, the govt reiterated the worth of creating a supportive culture among the the country’s business people to electricity by means of the geopolitical instability and pilot the digitization, internationalization and sustainability of the sector.