MILAN — Italy’s fashion industry saw its share of moving pieces at major fashion houses in 2016, both in design and management. Alessandro Sartori will debut his first collection for Ermenegildo Zegna in January, as will Guillaume Meilland for Salvatore Ferragamo’s men’s wear under new chief executive officer Eraldo Poletto. Men’s wear brands Corneliani, Boglioli and Pal Zileri will all kick off the year with new ceos — Paolo Roviera, Andrea Perrone and Giovanni Mannucci, respectively. In February, Bottega Veneta, under new ceo Claus-Dietrich Lahrs, and Gucci will each show their first co-ed shows. The Roberto Cavalli company is in the midst of a reorganization helmed by ceo Gian Giacomo Ferraris, which has led Peter Dundas to exit the brand as creative director. Francesco Risso will show his first presentation for Marni in January after Consuelo Castiglioni’s exit.
In Italy, political uncertainty has been avoided for now following the defeat of Prime Minister Matteo Renzi’s referendum and subsequent resignation, but the country is grappling with a banking crisis and government debt of $2.48 trillion, according to Italian government data, as well as an ongoing high tax burden and a slow judicial system, just as interventions on the issue of migrants arriving in and passing through Italy continue to be a priority.
The unemployment rate in Italy decreased to 11.6 percent in October 2016 from 11.7 percent in the previous month. However, the economy shed 30,000 jobs and 82,000 more people left the labor force, according to Tradingeconomics.com.
Consumer confidence has been under pressure throughout the year, and, in December, Raj Badiani, senior Italian economist at IHS Global Insight, said in a research note that “households are increasingly fearful of accumulating risks, namely growing political tensions, the country’s banking sector tensions and disappointing labor market developments in recent months. The political mess and the prospect of a particularly hostile future general election could spark a further retreat in consumer confidence during 2017, which would be a major risk to our assessment that consumer spending will underpin near-term growth prospects.”
In December, Italy’s President Sergio Mattarella appointed former Foreign Minister Paolo Gentiloni as new prime minister following Renzi’s resignation. Renzi had been promoting a referendum to vote on a change in the country’s constitution, which he claimed would streamline Italy’s government decisions. Renzi, who had vowed to step down if he lost the referendum, took full responsibility for the defeat. Opposition parties have been lamenting the fact that Gentiloni is entirely aligned with Renzi and that his government mirrors that of his predecessor and are clamoring for new elections. These, however, will depend on a new electoral law that is being drawn up and needs to be approved by parliament. In the meantime, Rome’s administration under beleaguered mayor Virginia Raggi continues to be plagued by scandals and the mayor of Milan, Giuseppe Sala, has returned to work after temporarily suspending himself from office as his role as the commissioner of the Milan Expo in 2015 was under investigation.
Following Renzi’s resignation, Luca Solca, managing director and sector head of global luxury goods at Exane BNP Paribas, predicted “more austerity” for Italy. “Italy has used debt and devaluation in the past to absorb social tensions. The problem is both are no longer available now,” he wrote.
A weaker euro, on the other hand, is providing a breather, as is solid business with the U.K. following the Brexit vote and the reappearance of Russian shoppers.
According to Focus-Economics.com, in 2017 “Italy’s economic growth should broadly mirror this year’s subdued performance, as stronger growth in exports is expected to offset weaker domestic demand. Nevertheless, Italy remains exposed to both internal and external risks: a worsening in the conditions of the banking sector and a weaker global environment represent the main downside risks to growth.” Analysts, the site said, expect the Italian economy to expand 0.8 percent in 2017.
Financial instability continues to hit the Italian banking sector. The Italian state is rescuing storied bank Monte dei Paschi di Siena through a bailout package of 20 billion euros, or $20.9 billion at current exchange.
According to revised data released by the National Statistical Institute, Italian consumer prices fell 0.1 percent from the previous month in November.