Italy, which accounts for about 40% of the world’s production of luxury goods, was severely affected by the Covid 19 crisis , which had a significant impact on demand. Brands are reducing their orders and requesting additional payment terms.
Several craftsmen, supplying major luxury brands, are seeing orders fall by 20-50% in May and June compared to last year. Some are concerned about the lack of orders beyond the summer.
Demand for high-end clothing and accessories is expected to fall by 35% this year and revenues may not return before 2022-23 to an estimated 280 billion euros in 2019, according to the consultancy Bain.
“If things do not return to normal in the coming months, there are fears that from September onwards the situation will deteriorate further and many luxury suppliers, especially smaller ones, could go bankrupt,” said David Rulli, head of fashion at the Confindustria business lobby in Florence.
Indeed, some medium-sized luxury brands are trying to protect their margins by asking for price reductions from artisans to compensate for sales lost during the lockdown.
Furthermore, despite a tentative recovery, producers are not in a position to ensure their business under optimal conditions.
“At this time of the year, I would present my fabrics for next year’s fall and winter collections, but no one is thinking about it at the moment. Besides, you can’t show the fabrics on video, people have to touch them,” said the CEO of silk manufacturer Serica 1870 Filippo Baldazzi.
However, the houses are still aware of the value of this exceptional craft. The industry employs 400,000 people in Italy, valuable suppliers that the brands cannot afford to lose. Some labels are trying to juggle their own objectives with the needs of their suppliers in order to ensure the sustainability of this industry.
“Real luxury is in the small details. I think a lot of bands, including foreign ones, have realised that once these craftsmen are forced to close down, this kind of sophisticated work stops with them,” Filippo Baldazzi continued.
Featured photo : © Gucci
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