MILAN — Some of Italy’s most famous brands are a bit less Italian than you might think.

Missoni cuts its sport shirts in Romania. Prada stitches some of its shoes in Serbia. Giorgio Armani gets pieces of his diffusion lines from places like Hungary and China. Benetton manufactures in several countries including Croatia, Tunisia, India and Turkey.

Even the president of Italy’s Camera Nazionale Della Moda Italiana, Mario Boselli, owns his own factory in Slovakia making synthetic yarns.

Italian companies are fleeing Italy. The production of textiles, apparel, leather and leather goods in Italy dropped 8.7 percent in 2002, according to figures from the Camera. In 2001 that figure was actually positive, showing a 2.8 percent rise.

“The situation is not the rosiest,” said Giulia Pirovono, the Camera’s general director.

The high cost of doing business in Italy and the inflexibility of its labor market are forcing more and more companies to go abroad to manufacture their goods, whether it be entirely or only in part.

Boselli has been producing synthetic fibers in Slovakia since 1999. He said labor costs are a sixth of what they would be in Italy while energy costs are about half as expensive.

“When it comes to certain products, the choice of Italian companies is either you stop manufacturing them or you make them elsewhere,” he said.

Italy’s geographic proximity to northern Africa and Eastern Europe make those countries particularly fertile ground for the outsourcing of low-cost production.

“In China and the Far East, costs are even lower, but those countries are also farther away, so it is easier to control operations in Romania,” said Marco Tempestini, president of Unimpresa Romania, an association of Italian companies doing business in that country.

Many companies producing abroad are high-volume businesses targeting the low-to-medium segment of the market, such as Italian giant Benetton. These firms, selling clothes at low prices, are feeling the most pressure on their margins.

“It is no longer feasible to produce for the mass market in Italy,” said a Benetton spokesman.

Today about half of Benetton’s manufacturing takes place abroad in countries as varied as Spain, Portugal, Hungary, Croatia and Tunisia. Benetton also produces in India and Turkey but primarily for the local market in those countries.Over the past few years, Marzotto has been shifting its production of yarns and fabrics to countries like the Czech Republic, Lithuania and Tunisia to cut costs and narrow losses at its textile division.

Fashion houses are often reluctant to discuss the issue but they, too, are turning to foreign countries for production. A Prada spokesman said a “very, very small percentage” of the brand’s shoe uppers are assembled in Romania and Serbia using Italian materials.

“We have exploited all of the shoe-upper production in Tuscany,” he said, explaining that Prada sought labor outside Italy because of the rapidly growing demand for its shoes.

Gucci said that shoe uppers for its men’s sneakers are made in Serbia, but all other shoe parts are Italian and the assembly of all shoes is done here.

Many companies operating abroad stress that outsourcing has no impact on quality. It is a common practice for companies to send Italian managers to supervise factories in other countries. Often workers abroad stitch or work with raw materials from Italy.

“The quality has really improved [in these countries]. There are well-organized structures there. You just have to overcome that kind of psychological barrier,” said Angelo Giallorenzo, commercial and marketing director at IT Holding.

IT Holding, which boasts a rich portfolio of licenses to produce diffusion lines such as Versus, Versace Jeans Couture, D&G and Just Cavalli, has been producing basic products like jeans and T-shirts in Morocco and Tunisia for about five years. Workers in Italy put on the finishing touches before they are shipped to stores.

The company is also farming out production of handbags and small leather goods to China. Eventually about 80 percent of these items will be produced there but the production of more specialized items like formal shoes will be kept in Europe.

Of course, there are drawbacks to moving production out of Italy. It increases the complexity of the supply chain, lengthening the time between an order and the actual manufacturing. It also can raise questions over the use of low-paid workers in developing countries. “Every time another link gets added to the chain there is more of a risk of [exploitative labor conditions],” said Tempestini, who is also the ceo of Maglificio Magreb, a knitwear company in Treviso that operates in Romania.“You have to be more careful in countries where there are fewer [labor] laws. [Italian companies] have to take further precautions to compensate.”

And producing abroad is a bit of an ironic twist for Italians who pride themselves as master artisans and sometimes turn melodramatic when describing their craft as an extension of the canon that birthed Michelangelo and Leonardo Da Vinci. Many have expressed the belief that their innate ability to craft leather and fabric is encoded in their DNA.

But an economic downturn can turn what at first seemed sacrilegious into shrewd strategy. And what’s even more dramatic, it may not even matter to the most important person of all — the customer.

Armando Branchini, vice president of consultancy InterCorporate, said ultimately consumers will equate quality more with a brand than with a particular country.

“An Armani product is Armani, whether it is produced in Italy or in Spain or in China,” he said.

Janet Brown, owner of the eponymous boutique in Port Washington, N.Y., said she can’t remember a single time a customer has asked if a particular garment was made in Italy.

“If a woman wants a limited-edition cashmere sweater and it’s made in Timbuktu, she still wants it,” she said.

But just because products are partially manufactured or sewn in other countries doesn’t mean they have to forsake a Made In Italy label.

As Rossano Soldini, president of shoemakers association ANCI, explained, all that is required is that most of the work is done on Italian soil.

“Delocalizing part of the production to stay competitive is OK, but the important thing is that it doesn’t bear the Made In Italy label if it is entirely produced outside of Italy,” said Soldini, who along with others in the fashion industry is asking the Italian government for better vigilance regarding the label.

“If somebody manufactures a product in China it should read Made In China or if it is made in Romania, the label should say Made In Romania. There’s nothing to be ashamed of,” he said. “The consumers have to be informed on where it is produced — then it is up to them.”

To access this article, click here to subscribe or to log in.

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus