November 23, 2020

How Italy’s fashion industry is back after the lockdown

8 min read

Italy is testing its return to normality after over two months of lockdown due to Covid-19. One week after the reopening of companies on May 4, SI asked some key Made in Italy jeanswear and sportswear brands about their next strategies and vision of the future.

 

A most striking result, as recently calculated by SMI-Sistema Moda Italia, the Italian fashion and textile industry has registered a loss of €3.5 billion in the first three months of 2020 when compared with 2019. Forecasts for the whole 2020 say that the loss might reach €9 billion.

 

Although all companies had to close, practically all of them continued to carry ahead the activities they could manage remotely. Over 90% of them requested the state to start short working procedure, 80% asked their employees to do smart working and 13% of them reconverted their activity and started producing sanitary masks and other protective textile items.

 

Italian textile and apparel enterprises are now gradually restarting their activities even if part of their employees are operating remotely, part are back to work according to shifts while always respecting the requested measures of checking one’s temperature and health before entering, while wearing protections and respecting social distancing.

 

FEAR TO GO BACK?
Some might have feared to return to work, though not all the them. For some it was rather a very hopeful beginning: “My workers are not afraid. Most of them are willing, observant and happy to be back,” commented Roberto Ricci, owner, RRD-Roberto Ricci Design.

To support his workers, Enzo Fusco, owner FGF Industries, the company behind Blauer and Ten C, has granted his workers a free insurance that guarantees reimbursements for €100 per day and a €3,000 fixed bonus in case they catch corona or are hospitalized in high-risk ward areas.

 

GETTING READY FOR S/S 2021
Most companies have chosen to offer new s/s 2021 collections. “We are working at our s/s 2021, but dynamics and collections will change,” said Alessandro Marchesi, CEO, Compagnia del Denim, the company behind Two Men Two Women (TMTW), part of Cris Conf group (the same one that owns Pinko). “Our next collection includes carryovers, though also new interesting and high-quality products that can resonate with retailers, despite we will offer less pieces in total. We will stick to two collections per year though fragmented in more capsules in order to always offer new proposals that retailers can offer–and pay–throughout the year.”

Alessandro Marchesi, Compagnia del Denim

Photo: Compagnia del Denim

Alessandro Marchesi, Compagnia del Denim

For Fusco, the situation looks hard: “Out of our total sales for s/s 2020, 60-70% of our foreign clients have already paid, though many Italians haven’t. For this season we will not get back unsold pieces, but we can exchange them with new merchandise. We will not make discounts, though, in order to help our customers, who could pay in 90 days, we have prolonged their payment times of another 90 days reaching a total of 180. For s/s 2021 we will offer a new collection but it will be 40% smaller than our usual ones.”

Enzo Fusco, FGF Industries

Enzo Fusco, FGF Industries

Similarly RRD has reduced its offer. “We believe in the continuity of our brand and not offering new products at all costs. Our aim is a reciprocal support to our wholesale retail distribution. We won’t give particular facilitations but will walk side by side with them supporting them as winning teams that represent us on the territory.”

Of a different opinion is Dondup’s CEO Matteo Anchisi who doesn’t believe that offering carryover products can be strategic: “We will offer our s/s 2021 collection between 10 and 15 July offering new proposals only as we think the consumer won’t be looking for ‘old’ products.”

From left: Matteo Marzotto and Matteo Anchisi, Dondup

From left: Matteo Marzotto and Matteo Anchisi, Dondup

SETTING NEW TARGETS
Hand Picked, a Made in Italy brand produced by Giada, is trying to understand how to best meet the needs of a changing market. “It is important understanding how our consumers’ interests are evolving,” commented Franco Catania, president, Giada. “Surely we will increase our eco-friendly procedures by selecting environmentally friendly materials, recycling water in processes and using energy from solar panels, though also key for us is now getting back to more essential products and seasonal offers catered upon real market needs.”

Focusing on one’s own specialty is definitely a must for Roy Roger’s. “Our s/s 2021 will be more concentrated and will offer products we are stronger for such as denim characterized by great research washes and fabrics, products that are not extreme but meant to exalt tradition and authenticity,” commented Niccolò Biondi, CEO, Roy Roger’s.

Niccolò Biondi, Roy Roger's

Niccolò Biondi, Roy Roger’s

Federico Corneli, owner, Haikure, is also defining a new business model for his brand: “We aim to offer omnichannel digital strategies. For instance, we want to upgrade from Shopify to Shopify Plus. We want to study our customers’ journey and all of its touch points in order to get the best from our campaigns and maximize our customer experience. Moreover, starting from September, we want to launch monthly temporary capsules to be only sold via our digital platform.”

Tela Genova, a jeans brand that’s part of Caucci Group, is redesigning its business and investment plan. “We want to focus less on a wild research of new materials. We are rather focusing on our strong points–denim, first of all–while giving new worth to remainders and products we already have inside the company. The rush to waste is over and the cycle of a product is prolonging,” commented Cristiano Caucci, owner. “We are also studying new B2B investments on multimedia catalogs and digital tools in order to reach as many clients as possible.”

Cristiano Caucci, Caucci Group

Cristiano Caucci, Caucci Group

RETHINKING CALENDARS
Approaching the market with refocused timings is also key. Ricci believes that it is important to keep focused on the two “classic” seasons per year. “We think it’s time to rebalance the offer in the market. We prefer to offer collections twice a year rather than offering useless ephemeral products. Moreover, it’s not helping constantly anticipating deliveries as this damages quality.” He continues: “It’s better avoiding sales strategies that make you focus on quantity over quality. Also key is selling products in the right seasons–that is s/s in summer and f/w in winter, by delivering f/w in July and s/s in February. By constantly anticipating a brand ends up delivering lower quality products that are not giving a real service to consumers.”

Due to the  coronavirus sales will start on August 1 all over Italy. This decision meets a request that entrepreneurs have been asking for and would like to continue happening according to a new calendar. As Ricci says, also sales should regularly start later, at the end of the season, differently from what happened before: “Postponing sales at the end of the season is key–in Italy and all over Europe. The old system is ill and needs to be changed.” Biondi agrees: “It’s fundamental moving summer sales to mid- August and beginning of February for fall/winter ones as seasons have moved ahead of two months: in October we are still wearing cotton sweaters and three weeks after sales are starting. The same happens for the warm season that is not starting before the end of April. This is not helping retailers’ earning and keeps consumers waiting for sales. Even harder now that stores have remained closed for so long.”

 

IS MADE IN ITALY STILL MAKING A DIFFERENCE?
Apart from very few companies that still produce their own collections internally, Made in Italy is generally a weird topic as most of the Italian laboratories jeanswear and sportswear brands are working with are no longer run by Italian entrepreneurs and workers. Marchesi explained: “Through the years the old Italian laboratories have been replaced with Chinese ones thanks to their highly profitable price-quality ratio and for being so widespread over the territory –the only laboratories that are run by Italians and have survived are now collaborating with high-end designer brands. Despite this, Chinese laboratories have learnt significant skills and knowledge by staying connected with the Italian textile sector and reached important quality levels.” Moreover, as Marchesi explained, if they had had gone back to China many small-medium size Italian companies would have not been able to reopen in contexts as the present one. For this reason Italian-based laboratories and manufacturer are still a guarantee for good quality Italian products.

Biondi thinks that Made in Italy is no longer only a synonym for quality but also expresses a desire for rebirth as by purchasing a Made in Italy product one supports Italian workers, and therefore rewards the country. “It’s a form of greater protection for those who work with sacrifice and passion since generations despite other countries based all their activities on low-cost,” he said.

Matteo Marzotto, president, Dondup, commented: “Italy is the most important macrodistrict in terms of fashion luxury for high-end textile and fashion but also for leather goods, footwear, jewels, eyewear and design, in less words, lifestyle and aspirational products. Veneto alone produces 38% of components of worldwide fashion luxury and practically all the rest is 90% produced in the rest of Italy. Thinking that a situation like this one is putting at risk such competences is worrying me most. Despite huge luxury groups produce here, it’s not an entrepreneur’s responsibility but politics should take care of this situation by setting actual preserving measures.”

Also Catania believes in the high value of Italian hand labor: “Italian manufacturing companies are our economy’s diamond head. We think they are an added value to what the foreign markets offers. An eventual reshoring could happen if, for instance, the government applied a tax exemption for our industry.”

Franco Catania, Giada

Franco Catania, Giada

WHAT’S THE FUTURE LIKE?
Difficulties will not vanish soon. “I think that most solid and healthy companies will survive maybe taking more market quotas from other who didn’t make it, though we will suffer for at least the next two years,” commented Anchisi.

Despite the situation Italian entrepreneurs are bold and ready to face the battle of next months and years, as explained by Fusco: “Entrepreneurs need to have courage. I’ve been working for long and I could have retired already but I continue to run my company as I like this work and I’m happy I give a job to people I feel proud and responsible for. This lockdown has been a long test for us Italians, but we have shown we are strong and creative people who never withdraw and fear nothing. Despite no support came from our government during the lockdown we asked to let us open our companies and start working again. Italy is there and alive.”

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