PORTO, Portugal — With Portugal’s central bank forecasting higher-than-expected economic growth this year, the country’s textile and apparel industry is confident that the weaker euro will play a crucial role in driving its rebound.
At the fall 2015 shows that unfolded between the nation’s capital Lisbon and the financial hub of Porto, Portugal’s hand-crafted, rich textiles were a main protagonist on the runway.
For the first time since the European financial crisis, the sector reported an increase in employment of 4,000 jobs in 2014. Overall, the sector reported sales of 6.43 billion euros or $7.85 billion in 2014 at average exchange for the year, up from 5.77 billion euros or $7.63 billion in 2012, and inching closer to the 6.9 billion euro or $9.97 billion mark the industry achieved in its precrisis heyday in 2007.
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According to a report by ATC, Portugal’s Clothing and Textile Federation, and Eurotex, Portugal ranked the sixth largest manufacturer of clothing and textiles in the EU (tied with Belgium) in 2013. Portugal produced four percent of the region’s fabrics and apparel. Italy ranks first, Germany second and France, third. Also in 2013, Portugal ranked number four in market share, owning seven percent of all clothing and textile companies in the European Union.
The industry that counts Balenciaga, Céline, Neil Barrett and Inditex among its clients, is ready for the world to take notice of its technological prowess.
Here, WWD discusses the region with Paulo Vaz, general director of the ATC.
WWD: How much do you think that Portugal Textiles drives what we see on the runway, especially here at Portugal Fashion Week?
Paulo P.V.: Fashion and design are two important drivers because they give our industry a very important edge of individuality. We present this uniqueness to our international customers. While rooted in tradition, our textile makers focus on new products and very fresh fashion that is seen on the runway here. We are also very close to our clients. This is the secret to our survival and also the way we are working to increase our presence in the future. More service, more technology and more internationalization.
WWD: What are your main markets?
P.V.: We export to 180 countries in the world. Our best markets are still the European market that purchases about 80 percent of everything we produce. Spain, France, Italy, United Kingdom and Germany are our top single markets.
WWD: How does Portugal distinguish itself from the textile heartlands in the rest of Europe?
P.V.: We are very lucky to have a very important technological facet of our industry that is helping our companies shift from the traditional textiles to the modern technical textiles. They are working in many areas in terms of automotive industry, too, as well as health and construction….Some of the most interesting products are the new materials created for home textiles and hosiery. For instance, we are developing new yarns and new fabrics that can incorporate cosmetics and remedy therapeutic issues.
There are also advances in the automotive industry in terms of developing upholstery for car seats and also for the engine as some parts of the engine are now made with textiles, and components designed to be more light and more resistant. They are also working in the aeronautics and space industry.
WWD: Have you seen an increase in the world’s top designers that opt for Portuguese fabrics?
P.V.: Big brands that seek a solution for their special projects work with Portuguese textile makers. I can say almost everyone is working with Portuguese companies in this way because we can offer the industry a kind of double advantage: the proximity, not only geographic (80 percent are in Europe), but also the common cultural language. It is simply not the same with a Chinese, Eastern European or North African company. Since most of our clients are from Europe, we speak the same language and share the same rationale. We speak the same cultural language, which is much more important.
WWD: How does Portugal’s textile industry compare to that of a world leader [such as] Italy, for example?
P.V.: Italy and Portugal are two major countries that operate in textiles. Italy is still the leader, but so is Portugal, as we both cater to the same small geographical region. Both these nations’ industries and sectors work together in terms of synergies. Spinners, weavers, knitters and packaging…we have all these services that add to the value that makes us stand out and increases our value. We can find designers, retailers, brokers and logistical operators here in Portugal and that facilitates our competitive advantage.
WWD: What fabrics is Portugal most famous for?
P.V.: We are very strong in the manufacturing of crochet, lace and all types of knitwear. We are also leaders in terms of cotton and wool.
WWD: Many fashion-industry insiders say labor is economical here. What is the average salary for a seamstress that works in the clothing industry in Portugal?
P.V.: The monthly salary for labor is about 850 euro ($922.26) per month.
WWD: What is the outlook for the year ahead?
P.V.: After 2014, which was a very good year [exports rose again for the second consecutive year], we can now talk about recovery for an industry that has experienced a very difficult decade. We have experienced several shocks from liberalization of worldwide trade, the entry of China in the WTO and then the international crisis in 2008, and finally the problems we faced in 2011 here in Portugal due to the financial crisis. I think we have overcome all these hard situations. We are optimistic about the future.
Data from January and February show us that the market is recovering in terms of sales up 23 percent versus the same period in 2014. This was due mainly to exports, as we are more competitive in the United States.
WWD: Are you entering into new markets in terms of exports?
P.V.: The industry is reacting very well. Portuguese manufacturers increased their presence in international markets. Not only traditional markets like Europe, but also in emerging markets like Colombia, Brazil, Angola, Mexico and China…This is the trend that we believe we can maintain and we can even develop in the near future.
WWD: How do you expect the euro to boost the industry?
P.V.: No doubt that we will benefit from the markets that operate with the dollar, including the United States, which was in the past a very important market for our country.
WWD: Why doesn’t Modtissimo attract as many visitors as Milano Unica or Première Vision in Paris?
P.V.: While it is the most famous in the Iberian peninsula and one of the oldest exhibitions terms of fabrics and accessories, Modtissimo is more regional. We are not competing in the same way as PV and Milano Unica but we know it is important in for the region and for the Portuguese market.
WWD: Inditex is a huge client for Portugal. How does this affect the industry?
P.V.: Portugal is quite important for Inditex. The company buys around 600 and 700 million euros of Portuguese fabrics. It is very important for their business model to have this high-quality industry and high-reactive industry nearby because Portugal for Inditex is only two hours away by car. Portugal is important for Inditex in terms of retail as Portugal is its number-one market outside of Spain. They have about 700 shops in Portugal and they sell more than 1 billion euros ($1.09 billion) here. We are also the first market where Inditex exported their model and opened their first shop outside Spain. Zara was opened here in Portugal in 1988.