MILAN — After the country’s coronavirus outbreak, Italians are entering a phase of assessment as a can-do spirit is starting to spread – almost a call to arms to support the economy and the image of the country abroad — although no one is wearing rose-colored glasses as they gauge the expected impact on business.
Working with China has been and continues to be a priority for the Italian fashion industry and the Camera della Moda launch of the “China, we are with you” project during Milan Fashion Week that ran Feb. 19 to 24 was a success, according to Deloitte, as 16 million Chinese followed the live-streaming of shows. The initiative was set up to live-stream the shows, create dedicated social media platforms to comment on the collections and ad-hoc videos, backstage content and interviews to allow Chinese buyers and designers to partake remotely in the fashion experience.
China accounts for one-third of luxury sales and Deloitte through its latest edition of the report “Global Powers of Luxury Goods 2019” underscored how, out of the 100 biggest companies active in the fashion and luxury sector, 24 are Italian and two-thirds operate in the apparel and shoe sectors.
“Despite the uncertainties of the moment, enhanced by the coronavirus, it’s important that our country continue to support the fashion and luxury industry for its strategic relevance. The sector generates 34 percent of the economic value added and employs 22 percent of workers in the Eurozone,” according to a note issued by Deloitte on Friday.
“The impact of the coronavirus on the economy is a global issue,” said Patrizia Arienti, consumer leader, Fashion & Luxury EMEA at Deloitte. “And the fashion and luxury sector, which by definition has a global reach, cannot remain inert, following the latest developments. The sector is inevitably showing a slowdown, but we are confident that Italian fashion and luxury companies are strong enough to bear the economic impact.”
Arienti pointed to the “first encouraging signs” coming from China, where the coronavirus has peaked and then stabilized. At the same time, however, Deloitte is urging to map out a “necessary action plan focused on this sector which will see all the involvement of institutions and companies. Deloitte is ready to do its own part, including the counter-measures necessary to adopt in this phase.”
As Italian consumer demand has been slowing, the country has been relying on exports. Italian exports in the textile, fashion and accessories sectors last year surpassed 63 billion euros, up 2.17 percent compared with the previous year, said Deloitte.
Echoing Deloitte, just as the Italian government urged people to avoid panic and return to a degree of normality, as reported, Lapo Elkann on Friday sent out a tweet with a photo of the Italian flag and the hashtag #proudtobeitalian inviting “creative minds and entrepreneurs of Italian excellence to join forces to study concrete actions together and without politics [all in capital letters]” for the good of the country, whose “attractiveness and credibility are in danger.” Elkann, founder of eyewear company Italia Independent and scion of the Agnelli family, concluded by saying that his offices and his home are “always [in caps] open.”
Elkann elaborated by saying that he believes “it’s a social duty to be involved for the good of our country and in a moment such as this it’s important to do it all together. To relaunch Italy is a priority. Only working together we can bring back the value of the Italian brand in the eyes of the world.” Mido, the international eyewear trade show, shortly after tweeted its allegiance — with a red heart.
Meanwhile, Altagamma, in partnership with Boston Consulting Group and AB Bernstein, presented the “Coronavirus outbreak impact assessment on #luxury industry” survey. The luxury goods association said 40 percent of members expect an impact worldwide but mostly in China, although Chinese travelers are also a concern, with the majority of respondents expecting an impact in the next three to six months. It also stated that 61 percent of chief executive officers and chief financial officers expect to reach pre-virus revenue targets in 2021. Altagamma also expects a potential decline of around 10 billion euros in earnings before interest, taxes, depreciation and amortization in 2020 and a sales decline of between 30 billion and 40 billion euros in the personal luxury market. Also, the survey forecasts that between 10 million and 15 million of potentially unsold products destined for China will cause a potential sustainability issue.