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MILAN — Italian yarn manufacturers remain wary of signs of the dollar’s recovery, while fighting off stronger international competition in the lead-up to the 57th edition of the Pitti Filati yarn fair. This year’s show will run July 6-8 at the Fortezza da Basso in Florence.

The latest exchange rate for one euro is $1.21, compared with $1.36 in 2004. The depressed rate sparked a drastic downturn in yarn manufacturers’ sales.

“The dollar has flipped from $1.20 to $1.25 to $1.23 and back again to $1.20 in the past week,” said Giacomo Festa Bianchet, chief executive officer of Loro Festa. “I hope it stays where it is, but I have no idea what is going to happen, and I’m not guessing where it will end up.”

To most industry players, the up-and-down exchange rate isn’t the market’s major challenge. Instead, executives here have noted that Italy’s biggest competitors have successfully evolved their cheaper, lower-quality product.

“The dollar is giving us a little bit of hope, but business in general is suffering greatly from knitwear manufacturing in China, Turkey and India,” said Stefano Borsini, president of Igea. “They have become aggressive and, at the same time, bettered the quality of their product. Before it was only low quality; now they are capable of creating a low-to-medium quality product.”

The advancements of outside markets have pushed Italian yarn manufacturers to develop faster lead times and produce yarns that fill in gaps in the market in which the competition hasn’t yet been able to succeed.

Lanerossi, a yarn company owned by the Marzotto Group and Verzoletto Group, has reorganized to include more product in its portfolio. The company renamed itself Filivivi and has added two lines to its existing classic line Lanerossi to offer customers new luxury, fantasy and technological yarns. The company has developed a classic wool yarn that can be washed at 40 degrees, in addition to a wool, alpaca and acrylic mix sport yarn that the company said won’t lose its color with age.

“This is our response to the market, so we can offer the whole panorama of yarns,” said Eugenio Piscopo, product manager of Filivivi. “We have also upped our service and cut our lead times to one week with stock service product, and increased our capacity 15 million kilos annually.”

This story first appeared in the June 28, 2005 issue of WWD. Subscribe Today.

Lanerossi is not the only one spinning something new. Loro Festa will present Woollen, a carded line of natural fiber-based yarns including angora, Donegal, wool and cashmere mixes in intense melanges, and solid hues of naturals, browns and burnt reds.

“You cannot find these sorts of yarns in China,” said Festa Bianchet of Loro Festa. “I started doing them custom-made and they became so popular I decided to make them part of our collection.”

Bianchet added that the company had done slightly better in the first two quarters of 2005 compared with the same period in 2004. “It’s been very unpredictable and the second part of the year remains completely open,” he said.

Luxury yarn producer Zegna Baruffa is approaching the Chinese market in another way. In the past year, the company has opened stock service factories in Shanghai and Hong Kong. Marketing manager Mila Zegna Baruffa said the additions “were a big challenge for us.” At Pitti Filati, the company will show voluminous, ultralight wool-polyamide mix yarns. Added texture includes micro-boucle and knotted effects in melanges such as raspberry, sky blue and grass green.

Igea has also focused its collection on thicker yarns with affects of tweed and boucle, as well as a mix of natural yarns with nylon for comfort and stretch. Traditional yarns like alpaca and mohair have been reinterpreted this season by using shorter hair lengths mixed with metal to give a sparkling look.

Cotton yarn specialist Emilcotoni has expanded its line to include winter-weight cottons, including a cashmere cotton mix and a fluffy cotton yarn with a wool hand.

“Cotton has always been a key summer yarn, but now we are increasing its importance as a winter one,” said Lorenzo Struzzi, director of Emilcotoni. The company has also quickened its stock service to be capable of delivering a choice of 100 colors within 48 hours worldwide.

Loro Piana has triumphed over the past year with double-digit growth for the first two quarters of 2005 compared with the same period last year. Luciano Bandi, yarn division director of Loro Piana, attributed the figures to new American customers searching for higher-quality cashmere yarns.

At Pitti Filati, the company will present some fantasy hairy cashmere yarns that look like they have been spray-painted with color. In addition, Loro Piana has perfected a very lightweight cashmere yarn that, when knitted, can produce a sweater that feels like a shawl.

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