Estimate loss of $8-$10 billion in turnover
The coronavirus pandemic has ravaged the Italian landscape. The fashion and clothing sector had been hit the most with sales in March reported to have plummeted an astonishing 82.3 per cent compared to the same period last year. Stores meanwhile are shut and gloom is all-pervading. Fibre2Fashion spoke to few industry stakeholders to find out about the enormity of the loss incurred by the Italian textiles & footwear industry.
It’s too early to quantify the losses. The only certain evaluation we can do is on exports. We believe that there may be a reduction of about 20 per cent, with our industry being one of the most export-oriented sectors in the Italian manufacturing system. We estimate a loss of between $8 billion and $10 billion in turnover ($56 billion turnover in 2019).
The pandemic has had an enormous impact on our supply chain because we have been in total lockdown since the beginning of March and are now waiting for the DPCM (Decree of the President of the Italian Council of Ministers) from the government in order to re-open. We hope to be able to get back to work at the beginning of May. At the moment, we can’t quantify the economic impact precisely: we hope to be able to give a clearer picture of the situation in the coming weeks, when we start up again. The whole footwear supply chain had to shut down, and so the entire country has been aﬀected by the stoppage. Unlike other companies in the textiles sector who were granted an exemption in order to convert some of their production lines, we have been at a total standstill.
First, companies had to stop production, impacting the manufacturing cycle. Fashion needs to run at a high speed for the time-to-the-market. Even a few weeks’ of stoppage breaks the cycle. But luckily, it (the crisis) is on the wane. A lot of companies could restart production soon; some already have. Most of the retail companies are expecting a drop of 15 per cent in turnover in the first quarter (of which only one month i.e. March was severely impacted). The decrease in the second quarter is expected to be more— to the extent of 20–40 per cent. That would depend on the business model and positioning of the company.
Published on: 14/05/2020
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.