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Fashion Industry Promised $2.1B From Italian Gov’t

Italy government promises large aid package to support Italian fashion companies during the global recession.

MILAN — The Italian minister of economic development, Claudio Scajola, has followed up on his promise to help support the fashion industry during the global recession.

This story first appeared in the April 10, 2009 issue of WWD.  Subscribe Today.

The Italian government has approved 1.6 billion euros, or $2.1 billion at current exchange, for small- and medium-size Italian companies to assist them in obtaining “credit lines to boost exports [and] further resources for companies that are part of the textile-fashion-footwear districts.”

“It’s a small, positive sign of goodwill, but limited in its weight and will not be able to solve the crisis,” said Mario Boselli, head of the Italian Chamber of Fashion.

Scajola said last month the government was “set on sustaining a pivotal sector for the Made in Italy [label] and for all the Italian economy.” A month earlier, Italian fashion associations, including Sistema Moda Italia and the Chamber, had expressed frustration, saying the government ignored the fashion industry, while approving a stimulus package of about $2.54 billion to boost business in the auto and domestic appliances sectors.

It’s estimated that Italy’s fashion industry employs 800,000 people and has 30,000 distribution companies.

In 2008, the fashion industry reported a 4 percent drop in revenues, reaching 66.4 billion euros, or $97.6 billion at average exchange, compared with the previous year. Exports grew 1.2 percent to 42.6 billion euros, or $62.6 billion, but the domestic market showed an “unexpectedly quick and intense” 4 percent drop.

For the first half of 2009, the association expects a 2 percent decline in the sale of raw goods, such as textiles and hides, despite a stronger U.S. dollar, but it forecasts a 5 percent drop in sales of clothing and accessories to 63.1 billion euros, or $79.5 billion.