Brazilian Trade Shows: Optimism Reigns

A strong domestic economy has Brazilian fairs feeling fine.

A strong domestic economy has Brazilian fairs feeling fine.

This story first appeared in the November 18, 2008 issue of WWD.  Subscribe Today.

Brazilian fashion show organizers believe that a strong domestic market will maintain local buyer turnout at January events, despite the global financial crisis. They are also expecting no drop in foreign buyer turnout thanks to more price-competitive apparel, even though this advantage could be offset by looming recessions in buyers’ home countries.

Organizers said domestic sales at fashion fairs in January should stay strong because Brazil is, unlike many countries, not in a recession. Because of controlled inflation, rising employment and a healthy trade balance, the economy is expected to grow by 3 percent in 2009, economic analysts said. This is less than the 4.5 percent growth predicted before the global economic slowdown.

Foreign sales at fashion fairs in January are harder to predict, organizers said. Between September, when the global financial crisis began, and November, the remittance of dollars from Brazil to cover losses elsewhere caused the greenback, in shorter supply, to appreciate 28 percent against the real. This has made dollar-based Brazilian exports more competitive abroad. But because the United States is on the brink of a recession, which also looms over Europe, this could limit the purchases of U.S. and European foreign buyers at fashion fairs here, organizers said.

The Jan. 18 to 23 edition of São Paulo Fashion Week, held at the Bienal Cultural Center in Ibirapuera Park, will feature up-market, fashion-forward winter 2009 collections from 40 stylists, about the same number as the 39 designers at its year-earlier event. Some 70,000 visitors and 30 foreign buyers are expected, similar to last January.

“Because of a still-strong domestic market, we expect robust local sales at SPFW, and are less worried about the export market because it represents a small percent of Brazil’s total fashion market,” said show organizer Graça Cabral. “Export sales at the SPFW will depend on whether the dollar’s appreciation [against the real] remains stable, favoring dollar-based exports…and the likely recessions in the United States and Europe. We are more hopeful that our other foreign fashion markets, the Mideast and to a lesser extent Japan, will be more resilient.”

The Jan. 12 to 17 edition of Fashion Rio, held at the Gloria Marina, will attract local and foreign buyers looking for more affordable mainstream collections. The event, expected to draw 80,000 visitors and more than 100 foreign buyers, will feature around 44 designers and the Fashion Business tent, a salon shared by 150 exhibitors.

Show organizers do not, however, know if this edition’s salon will generate the $205 million worth of domestic orders and $15.5 million worth of foreign orders placed last January.

“At the next Fashion Rio, we are hoping domestic orders stay strong…but we’re still in the middle of the turbulence caused by the global financial crisis and it’s hard to predict the extent to which it will affect us,” said João Paulo Alcantara, a Fashion Rio organizer. “Foreign orders at Fashion Rio are also hard to predict. ”

The annual Jan. 12 to 15 Couromoda footwear fair at São Paulo’s Anhembi Park will feature 1,200 exhibitors, including more athletic footwear and sportswear exhibitors. Some 77,000 local visitors and 3,000 foreign ones from 70 countries are expected to attend.

“The global financial crisis is not expected to greatly affect orders at the Couromoda because it is mainly a domestic fair and local shoe retailers will, after the Christmas season, be very low on stock,” said Jefferson Santos, the general director of the Couromoda.

Rafael Cervone Neto, an executive director of the Brazilian Association of Brazilian Textile and Apparel Industries, was more optimistic than fashion show organizers about local and foreign business at the upcoming events.

“Brazil has a very strong domestic market for textiles and clothing, one which does $43 billion in business a year, and is not overly reliant either on credit or on exports, which only accounts for $2.3 billion of that annual total. That’s why, with the economy expected to grow by at least 3 percent next year, I expect local fashion sales at the next SPFW and Fashion Rio to be strong,” he said.