MILAN — Italy’s fashion industry looks set to experience some bright moments in 2015 as the weaker euro sustains exports, especially in the second half of the year.
According to the Fashion Economic Trends study published Thursday by the country’s Chamber of Fashion, industry revenues are expected to grow by 2.9 percent in the first six months of 2015 and accelerate 8.8 percent in the second half for overall yearly growth of 5.5 percent.
Weakness in the single currency could even lead to a return of some delocalized production to Italy, “as demonstrated by the experience of the American economy during the period of the weak dollar,” the Chamber study said.
According to the study, fashion industry revenues grew 3 percent in 2014 — slower than initial forecasts, released in February, of 3.7 percent growth — with a slowdown in the final quarter. “However, this scenario changed rapidly at the beginning of 2015 following an acceleration in the weakening of the euro, which already began in the second half of 2014.”
The more than expected slow-down in 2014 was due to “stagnating prices, which remained very weak also in the first quarter of 2015,” in part the result of continued weakness in domestic demand that kept downward pressure on prices. This pressure was pronounced in textiles and apparel, especially in the third and fourth quarters of 2014.
Overall, retail sales in Italy were down 1.1 percent in 2014 compared to 2013; however, apparel and shoes did well in specialized stores in key foreign markets, including France (up 2.9 percent), Germany (up 1.8 percent, although they deteriorated steadily through the year), the U.K. (up 2.8 percent) and Spain (up 2.2 percent).
In the U.S., apparel and shoe sales increased 2 percent while women’s wear sales jumped 5.4 percent. In Japan, overall fashion sales were flat, with the exception of accessories, which were up 3.9 percent, while in China larger fashion retailers saw sales increase almost 10 percent.
In terms of markets, for the first time in a decade, exports to European Union countries of “Made in Italy” fashion increased at a faster rate (5.1 percent) than exports to extra-EU (3.4 percent) areas.
Outside Europe, sales growth was most pronounced in the U.S. (up 8.9 percent) and Hong Kong (up 7 percent), while Russia (down 14.3 percent) was in free-fall.
China was the Italian leather goods industry’s seventh largest customer last year; combined with Hong Kong it would have been the second biggest customer, after France. Although Chinese imports into Italy also increased in the year, the overall trade balance remained stable, according to the study.
With the exception of a slow-down in Russia (which is an important market for Italian purveyors of luxury), the industry’s key markets in 2015 are all on a positive footing. Citing European Commission research, the study said that for the first time since 2007 all economies in the EU will return to growth. EU-wide gross domestic product is seen rising 1.7 percent, while the euro area is expected to grow 1.3 percent. In the U.S., GDP is seen growing by 3.5 percent while in China expansion is expected to “again” top 7 percent.
Total industry revenues are seen at 64.57 billion euros, or $72.32 billion at current exchange rates, in 2015 compared with 61.21 billion euros, or $81.41 billion, last year. Thanks to the weakening euro, exports are seen jumping 7.3 percent, compared to 4.3 percent growth in 2014 on 2013.
The effect of the euro’s near 30 percent slide over the past year — the currency is at its weakest against the dollar since 2003 — is clear as luxury goods and fashion industry players report first quarter results, which are getting a big boost as dollar earnings get translated into the single currency. “The current exchange rate puts an end to a very long period during which a Super Euro gravely penalized Italian exporters,” the study said, adding that the potential boon to exports should help dampen the many “risk factors that remain on international markets, in particular the slowdown in growth in emerging markets.”