By and  on September 27, 2005

MILAN — After four years of self-pitying diatribes over increasing Asian competition, European economic malaise and unfavorable exchange rates, Italians are accepting reality and working to not only survive but to thrive in the new sourcing landscape.

The Italian textile, leather and manufacturing industry is a rigorous patchwork of individual companies with a strong independent work ethic. So when hundreds of competing mills came together this month for the new textile supershow Milano Unica, it was evidence that these firms are determined to defend their own businesses and support Italy's manufacturing prowess.

After years of fractional textile shows, followed by months of internal bickering over everything from dates to food, organizers from Ideabiella, Moda In, Shirt Avenue and Ideacomo found common ground with Unica. More than 25,000 people attended the four-day event, demonstrating the country's resounding textiles reputation.

"This was a season of change," said Pier Luigi Loro Piana, president of Ideabiella and co-chief executive officer of Loro Piana. "It's our job to manage change and to know when to change."

As the Italian manufacturing industry has come to learn, change is never easy but often necessary. Targeting the luxury sector, improving client service and investing in infrastructure are just some of the ways Italians are reversing years of decreasing market share.

Between 2001 and 2004, nearly 6,000 mills and apparel manufacturing plants shuttered, laying off more than 66,000 workers, according to research gathered by trade organization Sistema Moda Italia. As of last year, there were 67,457 mills and clothing companies employing more than 500,000 people.

Over that same period, textile and apparel makers' revenue dropped 12.3 percent to 42.55 billion euros, or $51.96 billion at current exchange rates. Of that total, exports slid 11.3 percent to 26.6 billion euros, or $32.48 billion.

Tanneries have also been struggling. About 5 percent of Italy's leather manufacturers closed between 2002 and 2004, according to data from industry organization Unione Nazionale Industria Conciaria, which organizes the biannual Lineapelle fair in Bologna. There are about 2,500 tanneries in Italy, employing 28,500 people.

Many of the textile and leather companies that ended up closing weren't prepared for the challenges of a new era, several executives said.

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