Appeared In
Special Issue
WWD Special Report issue 02/27/2015

The appeal and relevance of Made in Italy production is not lost on the government, which has been pumping up investments in the fashion industry and keeping a closer eye on the sector.

This story first appeared in the February 27, 2015 issue of WWD. Subscribe Today.

The country’s deputy minister of economic development, Carlo Calenda, has said the government plans to channel 40 million euros, or $45.5 million at current exchange, into the nation’s fashion industry in 2015. That’s up from an annual average of 5.2 million euros, or $5.9 million, for the past five years. The figure, revealed at last month’s  men’s trade show Pitti Uomo in Florence, is even more than the 36 million euros, or $41 million, that was originally earmarked for 2015.

Among the main goals, the government is working to attract more international buyers, who come from expanding markets, and boost business with Chinese, American, Canadian and Japanese firms. In large part, the government aid will go toward helping promote Italy’s main trade fairs.

Here, Calenda discusses government strategies and Made in Italy production.

WWD: What prompted the government to invest so generously in the industry?
Carlo Calenda: The government has ambitious objectives, aimed at deeply innovating initiatives in support of internationalization. We have set the increase in exports reachable within 2016 at 50 billion euros [$56.7 billion], between mature markets to further enhance, emerging ones in which to expand our quota and new markets with high potential.

Today we face a stagnating local demand, a condition on a par with many mature countries. Also, the most recent data confirm exports are the only dynamic component of our gross domestic product. In 2014, our sales outside Italy grew an additional 2 percent, reaching a record 398 billion euros [$451.7 billion]. Our trade balance was positive at 42.9 billion euros [$48.7 billion]. Never in the preceding years did we reach such a high trade surplus.

In the future, we must do more. Millions of consumers are appearing in world markets seeking products with a strong content of quality and innovation. A middle class that will grow in the next 15 years by 800 million individuals — and not only in emerging markets — is an opportunity that we must know how to catch. Hundreds of millions of new consumers will appear on the global market in [coming] years, an expression of a middle class that is expanding and that favors quality products and admires the concentration of style and innovation represented by Made in Italy.

WWD: What are the first steps to take in the short and medium-terms?
C.C.: The government has recognized the fashion industry’s priorities and has mapped out a plan for the pipeline, in light of the most recent studies on global trends and in the sector. As our first steps, we expect to forge a synergy between the “fashion cities” and the production districts; the definition of a “positioning” that will reflect the natural evolution of successful stories and recognizable elements, such as, for example, the men’s and women’s shows in Milan; men’s and children’s wear in Florence, or scouting activities and enhancing new talents in Rome.

The different production poles, starting from Biella, Como and Prato, will have to bring forward a communal plan to reach a single project to control international markets. Also, the program will allow different areas of production to develop relevant projects specific to industrial lines and sales channels (fashion, textiles and yarns,  [large-scale distribution], etc.).

WWD: I know it’s not easy to beat rivalries locally and within the sector, but have you
noticed if any have already been overcome?

C.C.: The plan is to create a collaboration of the “systems” in markets outside Italy and a synergistic cooperation of the trade fairs in Italy to strengthen Made in Italy. I can absolutely say that it has already had positive effects, and that some existing mental barriers have been overtaken: jewelry is an example [with Arezzo and Vicenza]. The strategic agreement between Fiera Vicenza and Arezzo Fiere in the goldsmith sector stipulated in January on the occasion of the inauguration of Vicenzaoro  (and officially supported by Confindustria and Federorafi)  is a first step toward a coordinated industry trade-show offer.

WWD: What are the main issues?
C.C.: A change of mentality is necessary to overcome rivalries and arrive at a shared vision, to identify clearly the roles that will enhance the different [territory specialties], the wealth of skills and traditional production know-how within the pipeline. I believe that the Made in Italy plan, which is based on these assumptions, will be able to stimulate the system to give its best, overcoming any division.

WWD: What endangers Made in Italy production the most?
C.C.: There are two aspects. On one side, there is an external threat, i.e., the phenomenon of counterfeits of Made in Italy in fashion and accessories. The industry of counterfeits and the imitation of fashion products represents, at national and European levels, a persistent threat for our companies. Italy has adopted legal tools to [address] the matter…and to [try to] prevent the phenomenon. The European Union did not do as much, unfortunately.

In Europe (and this is valid for our country, too), “country-of-origin” labels are not mandatory. A label indicating a product’s origin — already mandatory in all the biggest markets in the world except for Europe — is a proposal that Italy has been carrying out since 2003, and one that has been  on the table of the Council of the European Union  since  2005.

Over the years, we have picked it up several times to try to bypass the opposition of some countries in North Europe. In April,  the Regulation proposal was finally approved by the European Parliament. Aware of the opposition from many governments, we pushed to advance it and to bring it to the Competitiveness Council in December, so it would be clear to the European public [who] the members of the EU [are] who strongly support the need for more transparency and more consumer protection, and those who oppose it.

I want to clearly say to our production system that our battle is not over yet. The proposal of a regulation has not been definitely set aside. As Minister [of economic development Federica] Guidi has clarified, Italy will continue to fight in every way at the European level.

On the other hand, there is an inside issue, which is the risk of losing our classic production and with it the skills and the knowledge. It is thus necessary to safeguard the tradition and know-how of Made in Italy producers.…The fairs will be the showcase of Made in Italy product, communicating their value, and the creativity and artisanal skills of the producers of Italian fashion. Then there will be agreements at the GDO [large-scale distribution] level, which will benefit the entire pipeline but especially small producers: in fact, this will allow quality labels from medium and small companies in the distribution channel that could not otherwise have access to GDO on their own. We also plan to mentor new talents to accelerate the growth of the next generation of Made In Italy designers.

WWD: How will the 40 million euros [$45.4 million] announced this month be invested?
C.C.: We will channel funds to main trade-show events in the fashion and lifestyle system to strengthen their position with competitive trade fairs abroad.

In total, the funds are eight times the average financing in the previous five years.

WWD: How do you plan to attract international buyers?
C.C.: The fairs obviously have the main role in this sense. The government supports them with financial contributions to the trade-show system and the international missions in target countries. Our concerted actions help bring buyers from those markets in contact with Italian producers. In this context, we plan initiatives in markets with the greatest potential, like China, the U.S., Canada and Japan.

WWD: How do you plan to support industry trade shows?
C.C.: They can count on our funding, aimed at strengthening and developing initiatives already mapped out to support the growth and internationalization of companies; [bringing in] foreign operators, the organization of events in foreign markets that have the most potential to develop, training meetings and tools to [match supply and demand] during the events. The main criteria we’ve used for the choice of events are, in order:
· The position of leadership held by the fair in the specific market segment (meaning the importance that the event holds at a global level for the operators in the sector);
· Future growth potential;
· Synergies between groups of trade shows;
· The chance to develop joint operations in the pipeline or the sector abroad [for fairs outside Italy].

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