MILAN — As inflation, geopolitical tensions, war and slumping exports impact Italy’s fashion industry, particularly small and medium-sized businesses and the manufacturing pipeline, industry groups have banded together to call for more government support.
Following the fifth meeting of the so-called “Fashion Table”, held on Tuesday in the presence of Adolfo Urso, Italian Minister of Enterprise and Minister for Made in Italy, Camera della Moda, the Confindustria Moda association and Sistema Moda Italia acknowledged the Italian government’s interest in the fashion industry but highlighted the challenges affecting its future.
The government announced support through debt rescheduling, tax breaks for research and development, overseas promotion and increased social welfare measures. Urso also reiterated that the ministry’s goal is to implement the “Made in Italy” law, which focuses on the natural and recycled fibre supply chain to increase added value and provide incentives for this sector.
Carlo Capasa, president of the Italian Fashion Chamber, which reported a 5 percent drop in revenues in the first half of this year compared to the same period in 2023, said it was “necessary to provide adequate support to the Italian industry, especially small and medium-sized enterprises,” and stressed the importance of continued dialogue with the government.
Confindustria Moda, which represents the Asso Calzatrifici (footwear), Asso Pellettieri (leather goods), AIP Association Italiana Pellitcheria (fur) and UNIC (tanneries), issued a statement on Wednesday saying that while the attention given to the emergency in the short term is laudable and important, the government must recognise that “immediate measures as well as medium- to long-term interventions” are needed.
The Fashion Council was set up to discuss government solutions to the fashion industry’s crisis. Tuesday’s meeting was also attended by the ministers of labour, economy, culture, foreign affairs, environment and energy security.
“The crisis has reached an unprecedented peak. We appreciate the government’s consideration of the short-term emergency, but more needs to be done to support companies and protect know-how and jobs,” said Claudia Seki, president of Asso Pelletieri, which represents Confindustria Moda.
Sequi said the financial sector, made up of some 11,500 companies with annual turnover of around 33 billion euros, was “in a complex situation, facing in some ways an uncharted territory”, citing inflation, rising interest rates, debt that has become “unsustainable” for many companies and the crisis that has caused a deterioration of capital.
Italian craftsmen at work.
Courtesy of Italian Artisans
“This situation is suffocating companies and, combined with the difficult geopolitical situation with two wars in Europe and their effects being felt in Italy, we risk losing our manufacturing pipeline, of which we are rightly proud. Companies cannot survive and are at risk of closure,” Seki said.
According to Confindustria Moda, exports from the fashion accessories sector fell 7.9 percent in the first four months of the year compared to the same period last year, and the company is not confident of a short-term recovery. The country’s national statistics agency ISTAT forecasts that leather exports fell 10 percent in May and are expected to fall about 8.5 percent in the January-May period compared to last year.
The association noted that this has also led to an increase in the number of hours that government-funded redundancy pay, CIG, is paid out, which increased by 138.5 percent in the first half of this year.
The association touted the value of these districts as part of the supply chain and said “without government intervention the system is at risk” – with “Made in Italy” production, expertise, quality and thousands of jobs at risk.
Sistema Moda Italia also issued a statement on its own request to the government, predicting a 6.2% decline in sales in the textile and fashion sector in the first nine months of 2024 compared to the same period last year.
The economic slowdown accelerated in 2023, with 75% of companies reporting revenue declines and many reporting contractions of 20-33%, worsening in the third quarter.
Sistema Moda Italia president Sergio Tamborini said the sector needed “beyond emergency measures” and “an industrial strategy that works with a 10-15 year perspective and protects all the industry’s main fundamentals” such as creativity, technical and industrial skills, and urged “the acceleration of fundamental regulations to foster the creation of new sustainable production models” similar to those of the industry’s main European partners.
SMI also calls for more flexibility in government-funded severance packages, new credit policies especially for mid-sized brands, tax cuts on net profits and prototype production, the need to restructure some of Italy’s supply chains, for example silk, and more attention to recycling.
“Moments like the Fashion Table are not only meant to highlight the needs of the industry, but also to develop a ‘common goal’ in a market that is constantly evolving with new challenges,” Tamborini said.
