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

MILAN — The Italian trend sector is on monitor for a whole recovery, as prompt by the superior-than-predicted 22.6 p.c leap in 2021 revenue compared to 2020. But escalating tension on the bottom line from elevated raw substance and electrical power costs, as nicely as the Russian-Ukrainian conflict dampening customer self confidence and stability, are looming.

That was the outlook offered by Cirillo Marcolin, president of market affiliation Confindustria Moda, on Thursday. According to figures introduced by the business, the sector posted income of 91.7 billion euros final 12 months, an maximize of 16.7 billion euros on 2020 but even now 6.3 % underneath 2019 revenues.

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“Data recommend that the manner system is out of the pandemic-similar quagmire, with some sectors even increasing in contrast to 2019,” like jewelry and eyewear, Marcolin reported.

A equivalent trend was highlighted by Sistema Moda Italia, the consortium of Italian trend and textile firms, which posted revenue of 52.9 billion euros in 2021, up 18.4 per cent versus the year prior.

Confindustria Moda mentioned exports of Italian manner items jumped 23.5 percent past 12 months to 67.5 billion euros, with France, Germany, China and the U.S., between the greatest-accomplishing importers.

General manager Gianfranco Di Natale highlighted how the U.S. confirmed “impressive acceleration” compared to mainly flat expansion above the previous two many years. At the exact same time, exports to the U.K. lowered 10.2 percent last calendar year, signaling the effect of inflation on customer use there.

Whilst figures for the initially quarter of 2022 were being still remaining gathered, a study carried out amid its connected organizations allowed the team to forecast that like-for-like product sales will increase 19.3 p.c in the quarter. “The craze in the very first quarter has exceeded our anticipations and proved our businesses had been resilient and a primary force of the Italian financial state,” Marcolin reported.

The identical survey highlighted an envisioned slowdown in profits progress for the next quarter, when the impression of the Ukrainian conflict is getting felt much more broadly and gross sales need to raise 12.9 % on a comparable foundation.

“There are shadows on the horizon, including the Russo-Ukrainian conflict, which leaves us devoid of obvious responses on foreseeable future prospects, as properly as a quantity of issues these as power and raw elements fees, that are impacting the sector as a whole,” Marcolin stated.

In accordance to Confindustria Moda, exports to Russia and Ukraine amounted to 1.72 billion euros in 2021, representing 2.5 % of whole exports and down 3.1 % vs . 2019.

Although Marcolin contended that the sector’s overall publicity to the region is moderate, he underscored how some districts and product groups are notably influenced by halted business.

The renowned footwear hub in the Marche region, as very well as garment manufacturers in Veneto, are between the most pressured. Confindustria Moda believed that 3 p.c of Italian fashion providers create much more than 50 per cent of revenues in Russia and 11 p.c between 10 and 50 per cent.

“We have normally supported the institutions and the government on sanctions due to the fact we firmly believe that that they can assistance spearhead a peace deal,” he mentioned. “The context is specially elaborate right now, and regardless of figuring out that sanctions are impacting some of our affiliated organizations, we just cannot aid but sympathize with influenced populations residing a humanitarian crisis.”

Nevertheless, the ripple impact of the war is staying felt across the sector, impacting prices and denting purchaser confidence globally. According to the survey performed by the group, 49 per cent of manner enterprises hope next-quarter revenue to stay flat compared to the earlier quarter, although 43 % of them forecast a deterioration in their performance.

The conflict, as properly as the cease-and-go lockdown tactic in China, “pose the hazard of vanishing the article-pandemic rebound, with a probable disastrous effect for our businesses,” Marcolin said.

To this end, the government reiterated the great importance of developing a supportive society among the the country’s entrepreneurs to electric power by the geopolitical instability and pilot the digitization, internationalization and sustainability of the sector.

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