MILAN — Out of the industries affected by the severe restrictions imposed on nonessential manufacturing activities by the Italian government to battle the coronavirus epidemic across the country, the national jewelry sector will be heavily impacted due to its fragmented makeup of small, highly interconnected companies. Representing an industry valued at over 7.4 billion euros, and strongly focused on exports, Federorafi president Ivana Ciabatti discussed with WWD the repercussions of the national restrictive measures on the jewelry sector, why they are going to have a significant domino effect on the whole supply chain and the pillars to use to build the post-crisis renaissance.
WWD: What do you think of the decree that will become effective on Wednesday?
Ivana Ciabatti: With the latest decree, we actually get into a state-of-war economy. The suspension of all the nonessential activities will result for the jewelry sector in the closure of all the manufacturing companies, with the only exception of all those activities that enterprises will be able to manage through smart working. Once again, on Sunday, as soon as we learned about the Prime Ministerial Decree, we gave our full support to the correct arguments that Confindustria’s President Vincenzo Boccia listed in his letter to the government and we also highlighted an aspect that we underlined within Confindustria Moda: It’s crucial to give the companies the technical time to close ongoing processes to avoid the breakdown of the only full supply chain in the Western world and at the same time to avoid the possibility that entrepreneurs would not respect the decree to protect their companies and their employees. I think it was definitely a smart decision to give the different prefects the power to evaluate each single case.
WWD: What’s the real impact of these restrictions on the jewelry sector? Do you have any forecasts?
I.C.: We don’t have numbers yet since the situation is constantly evolving. The impact is and will be devastating on a sector consisting of small and medium-sized companies, as well as micro entities, highly interconnected and with a limited capacity to finance themselves with their own resources. The closure of the jewelry stores in Italy and then, step by step, in the other countries is generating a domino effect across the whole supply chain, which will make the restart highly complicated. At this point, stores have been closed for a while, retailers have no incomes, which means that they are not able to pay their suppliers, banks and landlords… and this happens backwards across the supply chain with a progression that’s not linear, but geometric if not exponential. The longer this period of restrictions will be, unfortunately, the bigger will be the number of those companies that won’t be able to restart when the emergency is over.
WWD: What do you think are the most urgent measures that the government should take to support the sector you represent?
I.C.: Over these past weeks, Confindustria made requests reflecting the needs of entrepreneurs. Of course, the first request has been to avoid the total shutdown of the productive chain, while adopting all the measures to protect the health of employees. Other fundamental measures that the government needs to adopt are the general suspension of tax payment deadlines; the development of social welfare strategies to protect jobs; the immediate injection of liquidity and the urgency of facilitating the access to credit, also, for example, for the already existing loans for use. Without these measures and dedicated fundings, companies will have to proceed with layoffs or won’t have the money to pay their employees. The measures have to be extraordinary not only in terms of amounts, but especially, in terms of access: Italy is the champion of bureaucracy…we have to simplify and simplify!
WWD: Trade shows, most of them postponed, are still crucial for the jewelry sector. What do think is going to happen to them?
I.C.: We have asked ICE [Italian Trade Agency] to create a dedicated service to legally safeguard those exhibitors of international trade shows which are postponing dates without considering the reimbursement of those deposits that were already made… also considering that several trade shows might not allow the access to Italian products and exhibitors. We really don’t want that, along with the losses caused by the production’s shutdown and the missed orders, companies have to deal with problems linked to the missed refunding of their deposits already paid to trade shows.
WWD: What are the options for the jewelry segment to try to overcome this deadlock?
I.C.: We continue to work on projects focused on the promotion and commercialization of products on international markets. It seems that some areas of the world, including China, are recovering from the health crisis. For this reason, we have to focus on those markets with large-scale and highly strategic initiatives. For this reason, we are already setting specific requests to the ICE Agency and to the Ministry of Foreign Affairs and International Cooperation.
WWD: When the health crisis is over, what’s going to be the cure for the industry?
I.C.: First of all, we need a significant plan of public investments and extraordinary measures, a sort of “shock plan” to support liquidity and credit until the manufacturing and distributive chains will be back to full capacity. We will definitely have to innovate the way jewels are distributed with investments more focused on online/offline hybrid platforms both in Italy and abroad. Then, it will be crucial to support in a more strategic way the presence of Made in Italy products and Italian companies on the international markets, considering that our sector exports 85 percent of what it produces. It’s highly important to show the world that the industry of Made in Italy — beautiful and exquisitely crafted products — has already restarted, facing and overcoming with great determination, courage and knowledge another incredible challenge!