MILAN — Chiaroscuro.
It is a season of “light and dark,” as the curtain rises on Milan Fashion Week Sept. 17. Italy’s luxury industry continues to grow, fueled by exports — yet it is also slowed by a sputtering local economy. Economic sanctions against Russia over the crisis in Ukraine cast an additional cloud of uncertainty going forward, but industry executives remain upbeat about prospects.
“Our business is luxury and it’s always been subject to geopolitical tensions, but it continues to grow,” said Michele Norsa, chief executive officer of Salvatore Ferragamo SpA. “We should not focus on specific political situations, but optimize business globally.”
“I am not worried about the effect of wars because if you consider more than 2,000 years of history, this is one of the most peaceful moments in the world in general,” said Brunello Cucinelli. “Obviously, with seven billion people around the world, there will always be confrontations, but I cannot think that those who write up their companies’ budgets would not take a crisis in some country into account.”
As reported, Cucinelli’s namesake company posted revenues of 175.8 million euros, or $239 million, in the first half of 2014, up 11.6 percent compared with the same period last year.
According to the Fashion Economic Trends report compiled by Italy’s Chamber of Fashion, the country’s textile, clothing, leather goods and footwear industry is expected to report a 4.2 percent rise in sales in 2014, mainly boosted by exports, for a total of 61.9 billion euros, or $80 billion at current exchange. However, the study urged “more flexibility in the economic policies in Europe,” and a change in the growth rate, as revenues are forecast to climb only 1.2 percent in the first half of 2015. Exports in 2014 are expected to gain 4.8 percent to 47.4 billion euros, or $61.3 billion, but only 1.8 percent in the first half of 2015.
The industry’s performance in the second quarter this year was defined as “disappointing,” with sales up 3 percent and below expectations. Leather goods and apparel performed better than textiles and footwear.
RELATED STORY: Milan Preview — Ones to Watch >>
In the first four months of the year, exports grew 5 percent, showing an acceleration in the EU, which was up 7 percent. China continued to be strong, with Hong Kong up 9.6 percent, as well as the U.S., up 11.6 percent. Hurt by the growing tensions, sales in Russia dropped 11 percent. Japan was also down 6 percent. The research expects improvements in the third quarter and a slowdown in the last three months of the year.
Norsa said he was “still very positive about China,” where the company is seeing double-digit growth, supported by second- and third-tier cities, and, while conceding the situation in Russia is “delicate,” with a domestic impact and, even more on travelers, he was “positive in the medium range.”
The Florence-based company has not stopped investing in Russia, as it just reopened its Moscow boutique, doubling its space. In the first half, group revenues rose 6 percent, to 659 million euros, or $902.8 million, compared with the same period last year.
The executive was also upbeat about the agreement between airline companies Alitalia and Etihad, which is expected to implement direct flights and “bring visitors directly to Italy.” Another important element, he said, is the Expo, to be hosted in Italy in the spring. “We will see a positive contribution starting this fall and for the year to come.”
To wit, Milan is getting a makeover gearing up for the Expo — a city-wide international event focused on nutrition and promoting Italian culture, arts, food, industrial know-how and, of course, fashion — with construction sites sprouting throughout the city. Shopping arcade Galleria Vittorio Emanuele is being revamped with the help of Prada and Versace, which will unveil its flagship in that location during fashion week. Kicking off with Gucci on Wednesday, the week wraps up on Sept. 21 with Marni, which marks its 20th anniversary with a special charity installation of artful projects, and Ferragamo, which is also launching a fragrance on Sept. 19. As reported, Giorgio Armani, who for several seasons had been closing fashion week, moved his show ahead, to Sept. 20.
Among the news on the runways are Jil Sander’s first collection designed by Rodolfo Paglialunga, and Giambattista Valli unveiling his Giamba line.
Jane Reeve, ceo of Milan’s Chamber of Fashion, expressed satisfaction with the “well-spread out” schedule of young designers’ shows and the “increased visibility” they achieved. For example, Angelos Bratis, who will present at Armani’s theater, as well as Stella Jean and Andrea Incontri, are positioned ahead of Gucci on Sept. 17, and Marco De Vincenzo has a slot just before Etro the following day.
“Fashion is an exercise in stretching and we are working on having an international perspective, with additional side events and more closely involved with the city,” Reeve emphasized. “We are doing things that open up to the city.”
Cases in point: short films from the first Fashion Film Festival Milano will run throughout the week, and Renzo Rosso will deliver a lecture on Sept. 21 at the Expo Gate to about 70 students on supporting young talents as part of Gateway to Fashion Future. It’s open to the public and conceived by Expo Gate in partnership with the Chamber of Fashion, and will showcase collections by designers from the most prestigious fashion schools. “We asked him as he is a great speaker and a great entrepreneurial example,” said Reeve.