The Italian government has not revealed when or how it will begin to loosen a strict country-wide ban on non-essential business operations, and the fashion industry is getting anxious. Responsible for 5 percent of the country’s gross domestic product and employing more than 500,000 individuals, according to a joint report from University of Bocconi and trade group Altagamma, players in the Italian luxury goods market are “warning that a prolonged lockdown risked irreparably damaging” not only to their businesses but to the sector as a whole.
“Fashion is a seasonal industry, and certain dates are not compressible. Not reopening shortly would mean giving up almost a year’s turnover,” Carlo Capasa, the chairman of Italy’s National Fashion Chamber, stated in an online interview, as reported by Reuters, in reference to the lockdown order that currently extends to May 3. Italy – whose cities play home to luxury names like Gucci, Versace, Prada, Valentino, Dolce & Gabbana, and Giorgio Armani, among others, and an industry worth more than $98 billion, per Reuters – has been among the hardest countries hit by the spread of COVID-19 to date, with the death toll surpassing 20,000.
According to Reuters, “Capasa suggested April 20 as a date to gradually reopen manufacturing activities in order to deliver fall/winter collections on time to shops around the world, and start production of spring/summer collections.” His sentiment is being echoed by Claudio Marenzi, the head of the fashion division at Rome-headquartered lobbying firm Confindustria, who stated that while fashion factories have closed throughout Italy as a result of their status as “non-essential” businesses, “countries like France, Spain, Portugal, [and] Turkey” are gradually reopening manufacturing facilities.
“An economic epidemic could cause more lasting damage” to the fashion and luxury industries – which, taken together, represent the the country’s second largest manufacturing sector after metallurgic, according to a 2018 study from CRIBIS Industry Monitor and economic think-tank Nomisma – “than the health one,” he warned.
As of Thursday, Italy’s Coronavirus-related death toll increased by 525 on Thursday, down from an increase of 578 the day before. Although, the number of new cases “accelerated sharply to 3,786 from a previous 2,667,” according to Al Jazeera. As for the nation’s economy, which is the third largest in the eurozone, the International Monetary Fund forecast this week that it will shrink by 9.1 percent this year, “the steepest drop in gross domestic product of any large European economy.”
Meanwhile, fashion industry giants like Gucci’s parent company Kering have put forth slashed outlooks for the year. Paris-based conglomerate Kering, for which Gucci sales consist of the bulk of its annual revenues, revealed last month that it expects “consolidated revenue for the first quarter of 2020, ending March 31, will be down by between 13 percent and 14 percent in reported terms (approximately 15 percent in comparable terms) compared to the first quarter of 2019. The group, which also owns Saint Laurent, Balenciaga, and Bottega Veneta, among other luxury brands, said that it expects “sharp” impacts for the second quarter, as well, as consumer opt out of luxury spending amidst the global health crisis.
Patrizio Bertelli, the CEO of Milan-based Prada Group, stated last month that “the coronavirus outbreak has interrupted our growth trajectory,”noting that the group is “expecting a negative impact on this year’s results and implementing a comprehensive contingency plan to mitigate it, relying on our flexible supply chain and lean organization.”
The calls from industry entities come days after the BBC reported that “a limited number of shops and businesses [in certain regions] have been allowed to reopen.”
Share
