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Unica Exhibitors Upbeat Despite Dollar Woes

Italian textile manufacturers are hopeful about the year ahead, despite a possible recession and a worsening euro-dollar exchange rate.

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MILAN — Italian textile manufacturers are hopeful about the year ahead, despite a possible recession and a worsening euro-dollar exchange rate.

This story first appeared in the February 5, 2008 issue of WWD.  Subscribe Today.

Executives from some of Italy’s top textile mills, set to present their spring and summer 2009 fabric collections at Milano Unica on Feb. 12 to 15 at the Milan fairgrounds, are mostly forecasting positive results for 2008, after many recorded substantial gains last year. The increases helped some mills absorb the exchange rate difference and avoid raising fabric prices.

“Even if the economic trend cites a slowdown, we are guardedly optimistic,” said Simone Canclini, president of Como-based mill Canclini. The cotton manufacturer recorded a 20 percent increase in 2007 sales, bringing the mill’s volume to 42 million euros, or $57.6 million at average exchange for the year.

“Our outlook for the year is gray,” said Guido Capelli, product manager of Gruppo Dondi. “But there is a need for European product and many American clients understand that, so they will buy our textiles anyway.”

Gruppo Dondi’s 2007 sales gained 23 percent to 30 million euros, or $41.1 million, with much of the growth coming from the U.S. market. Capelli said higher sales enabled the firm to counteract the exchange rate discrepancy.

Like many other mills exhibiting at Milano Unica, Prato-based Lanificio Lamberto was forced to increase its fabric prices 10 percent. Raffaele Riela, vice president of Lanificio Lamberto, said the mill kept the price rise low by absorbing some of the exchange rate difference. Riela said he didn’t expect the increase to significantly affect orders.

“We showed our pre-collection to many American clients last month and the reaction was extremely positive and enthusiastic,” Riela said. “The demand is there.”

Leveraging Italian quality and creativity has also helped Waltex Tricot grow.

“Our clients only ask for creativity and high quality products, that is our strength,” said Amos Camilleti, international sales director.

After a 50 percent sales gain in 2006 to 9 million euros, or $11.3 million, and a 30 percent rise in 2007 to 12 million euros, or $16.4 million, Waltex Tricot is bullish about a 20 percent increase for 2008.

“Seventy percent of our sales still come from the Italian market,” but the firm plans to increase foreign market sales by next year, said Camilleti, adding the company expects to raise U.S. sales to $1 million in 2008 from $300,000 last year.

To counteract the euro’s strength, Prato-based mill Ultra purchased lower-priced raw materials in Asia.

“If we want to keep our high-level standards, we have to cut down the costs at the origin,” said Stefano Rigotti, Ultra’s chief executive officer, adding that the quality of raw materials in Asia had increased dramatically.

Ultra closed 2007 with sales up 8 percent to 20 million euros, or $27.4 million.

“Next year will be a year of consolidation,” Rigotti said. “We hope to maintain the same figures of 2007, but it won’t be easy due to the current U.S. dollar situation.”

Exchange rate woes haven’t dampened a wave of new trends for spring 2009, which highlight color, innovative finishes and a new spin on organic fabrics.

After launching an organic linen last summer, Crespi 1797 will show two new organic fabrics: a cotton stretch and a cotton and linen blend. Crespi 1797 will also unveil five naturally dyed colors at Milano Unica. Each organic dye was developed so it could offer three gradients of color, including an intense, uniform version that hadn’t been seen before in organic dyes, ceo Francesca Crespi said.

Further amplifying its color collection, Crespi 1797 will also show 24 new hues that have a minimum impact on the environment, as well as the mill’s 48 new colors for the season.

“For us, organic isn’t a flyaway trend; we are seeing solid results,” said Crespi, citing an American customer that recently ordered 10,000 meters of organic linen.

Ultra and Lanificio Lamberto both addressed the organic textile trend by adding organic cottons to their offer. While Ultra went for a simple naturally dyed organic cotton, Lanificio Lamberto blended its organic cotton with silk, viscose and linen.

Iridescent finishes on linen, silk and cotton blends are also an important trend. Canclini’s floral-printed cottons have a glossy, silk-like hand, while Crespi 1797 has linen with a shantung silk finish. Gruppo Dondi’s linen, viscose and cotton jersey collection sports shimmering finishes, some with a subtle smattering of metallic yarn in the weave. Lanificio Lamberto experimented with enzyme finishes to get a clean, soft touch to its linen, cotton and silk blended jacquards in floral and ethnic designs.

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