In the first quarter of 2020, the Italian fashion and textile companies lost more than 3.5 billion euros in revenues and their sales could decrease by a total of about 9 billion euros by the end of the year.
This is the result of a research conducted by Confindustria Moda, which analyzed the performances of the companies represented by SMI — Sistema Moda Italia, and that have been significantly impacted by the consequences of the coronavirus outbreak in the country since February.
Mainly located in two of the regions most affected by the virus, Lombardy and Piedmont, these companies were forced to shut down their activities during the Italian lockdown, which started on March 9. About 24 percent of them managed to stay open reconverting their activities to produce protective medical disposals, as well as filtering face masks for the community.
According to the research, 42 percent of the companies interviewed registered a loss between 20 and 50 percent of their revenues, while 28 percent of them posted a decrease between 10 and 20 percent. In addition, compared to the same period last year, for 49 percent of the fashion and textile companies the number of collected orders decreased between 50 and 20 percent.
As SMI president Marino Vago highlighted, in order to protect their workforce, 95 percent of the companies included in the research used the wage support measures made available by the government and, to protect the safety of their employees, 80 percent of them activated smart working.
Confindustria Moda’s research also focused on the fact that for the Italian fashion and textile companies, which took part to the survey the biggest issue they had to face during the emergency was the management of the relationships with clients. As Vago noticed, since most of the SMI associates operate in the textile sector, they were significantly affected by the requests of clients, sometimes big fashion groups, to postpone payments or revise contracts. “If sacrifices have to be made, they should be done by everyone,” said Vago, lamenting the disadvantage of the upfront part of the supply chain.
In addition, the research highlighted how the companies in the Italian fashion and textile sector are suffering after a lack of liquidity, “due to the low capitalization rate of the medium and small-sized companies,” Vago said.
In order to relaunch the sector and return to be highly competitive on the markets, companies expect the government to facilitate their business by simplifying bureaucracy procedures and by activating fiscal practices supporting entrepreneurs in this delicate phase.
“I think that more than ever, now it’s crucial for our compartment to behave like an orchestra, exalting collaboration among the parts,” said Vago, who also put the focus on the importance to establish a body overseeing the whole trade show business. “In Italy, we have small, fantastic fairs, but if we work all together we can be competitive and reach new markets.”