Carlo Capasa

MILAN — Carlo Capasa, president of Italy’s Camera della Moda, calls it the industry’s Marshall Plan — but in this case the head of the association is asking the Italian government, not the American one, for aid.

Just as the Marshall Plan was passed at the end of World War II, in 1948, Capasa compared the coronavirus outbreak to a war. “There’s the deaths, the economic crisis, most of the companies closed or producing only in part,” he said.

In an interview on Thursday, Capasa told WWD that the Camera della Moda had submitted a document “detailing a number of proposals for action in support of the fashion industry” to Italy’s Prime Minister Giuseppe Conte and to the appropriate ministries as the country grapples with the health emergency.

With a turnover of 90 billion euros and 600,000 workers, the fashion industry is the second most important nationwide, the largest luxury fashion producer in the world and the biggest fashion producer in Europe, accounting for 41 percent of production in the continent, followed by Germany, representing 11 percent of the total, said Capasa. “It’s Italy’s jewel in the crown, we can’t afford to lose it.”

Citing “unforeseen and unavoidable consequences” for the industry that will surely impact, at least for the rest of 2020, its financial equilibrium, production and employment levels, Capasa cited “an efficient but delicate and complex” pipeline that spans from the tiny artisan to small and medium-sized enterprises up to the international and established brands. “We can’t conceive of Italy’s pipeline to be on its knees, it would not ever recover. We must save all of it.”

“The Italian supply chain, known worldwide, is at risk, one of the most affected by the COVID-19, with tourism and transportation. We rely on a web of districts, if one collapses, the others will be impacted, with delays in production,” continued Capasa. “All has stopped here, the stores are closed, there is no demand because nobody is in the mood to shop, not even online. Although China, Korea and Japan are restarting, the other markets are now being impacted. However, we don’t want to feel sorry for ourselves and we must understand how to react.”

To avoid losing even one single job, “whatever it takes,” the Camera drew out “essential measures, the minimum necessary” to help support the industry, “a strategic asset that must be preserved.”

He also admitted that it was “difficult to find solutions” that would work for everyone as the companies are so different, each with its own “architecture, creativity, production and distribution.”

Capasa declined to estimate losses for the industry, given the “many obstacles appearing every day.”

While acknowledging that the “Cure Italy,” 25 billion euro package allocated by the government incorporated some of the measures suggested by the Camera, Capasa said the association hoped additional measures will be taken in the future.

Here, the CNMI’s proposals:

• Cuts in fiscal and social security charges to contain labor costs for companies affected by the crisis.

• Measures to ease the temporary unilateral reduction of up to 35 to 40 percent in working hours for all employees on permanent or fixed-term labor contracts. The goal is to insure employment for all, albeit at a reduced level.

• Funding for a special layoff fund for the most severe cases of corporate crisis.

• Acknowledgment of the situation of force majeure to allow a temporary self-reduction of up to 50 percent of rental contract amounts, with suspension of the civil law consequences that this would entail (termination of contracts, legal action, court orders, etc.). This measure to be balanced with tax cuts for owners of commercial properties (IMU).

• More aid for economic growth.

• Set-up of a guarantee fund to help banks defer mortgage deadlines, freeze interest rates and grant or increase credit lines needed to ward off the otherwise probable financial crisis.

• Measures to speed up the Public Administration’s payments to companies, in order to introduce liquidity directly into the system without going through banks and thus increasing businesses’ resilience in the process.

• Suspension of advance tax payments of June and November, which in view of the likely collapse of profitability in 2020, would dangerously affect businesses’ financial balance, creating further credit payables to the treasury in a moment of difficulty.

• Tax incentives to promote the relocation of production toward Made in Italy.

• Doubling of tax deductions for investments in digital marketing to push the only distribution channel that might not be overly affected by the emergency.

• Direct aids to small and medium enterprises, including artisans, in order to allow for a quick recovery and avoid demolishing the typical unique texture that characterizes the Made in Italy and the industry, at global level, of high-quality products.

In addition, the Camera has presented detailed projects for two particularly important measures:

• Extension of the intellectual property Patent Box legislation for brands until June 30, 2021. This would enable Italian companies, especially luxury, to defend the value of brands Made in Italy. The date of June 30, 2021, is dictated by OECD rules, under which brands may be included in Patent Box legislation up to that date.

• Raising of the percentages currently allowed for research and development tax credit. In particular, an increase in the percentage for design costs fixed for the sector from 6 percent to 12 percent and also, if possible, of the maximum cap from 1.5 million to 3 million euros. Extension of the provision — currently envisaged only for 2020 — for at least three years.

The association is working with the Italian Trade Agency (ICE), the Ministry of Foreign Affairs and International Co-operation and the other industry associations, on a series of promotion and communication initiatives for the fashion industry, which will be implemented in the second half of the year. “We have to be ready for when things will restart. We are thinking about the relaunch of Italy and of our values,” said Capasa.

He said that for the time being, Milan’s Men’s Fashion Week is confirmed for June, but he admitted it was “too early” for a final decision. “We need more time, maybe after Easter we will have more visibility. Maybe we change the way we present, or maybe the dates,” he mused. On March 23, the Camera will Skype with the other fashion associations in the world to discuss the situation, added Capasa.

“Camera Nazionale della Moda Italiana and its associates are in direct contact with the Italian institutions and reaffirm to the government their willingness to give a real and effective contribution, in this moment that calls for collaboration and unity,” said Capasa.