«The sales recorded at the end of 2021 and the beginning of the year are very encouraging. Our sector reached a turnover of 83.3 billion euros last year, with a growth of 21.2 %. In the first two months of 2022, growth was 25%, with a strong rise in exports. Frankly, we expected less. Despite the current tensions, we expect to recover and even exceed our pre-pandemic level in 2022,» said the president of the National Chamber of Italian Fashion (CNMI), Carlo Capasa, on the occasion of the presentation of the Milan Fashion Week program in June.

The uncertainties linked to the current geopolitical situation inevitably condition the forecasts for 2022. However, between textiles, leather goods, clothing, footwear, jewelry, beauty and eyewear, the Camera della Moda has a turnover of 92 billion euros, up 10.5% compared to 2021 and 2.1% compared to 2019. Italian fashion exports, in particular, increased by 23 % between January and February 2022, compared to the same period of the previous year. Driven by the recovery in domestic demand, imports soared 30.8 % in the first two months of the year.

Carlo Capasa said he is confident, but remains realistic, evoking the many criticisms affecting the fashion sector. Starting with inflation, which reached 6 % in April in Italy, while prices of fashion items rose only 1.3 %. Meanwhile, in March, industrial prices of fashion products rose by 36% year-on-year, due to the increase in energy and raw material prices.

«So far, brands have absorbed this inflation that has affected the production sector, but if the trend persists, the situation is likely to worsen. Before, the cost of energy for a tissue producer represented 10 % of its turnover. Today it is 30%,» explained the CNMI president.

Added to this is the pandemic in China, which through massive confinements is blocking important production centers, but also key destinations for Italian products, such as Shanghai and Beijing. Last but not least, the war in Ukraine and the European sanctions against Russia are having a strong impact on Italian fashion SMEs, and not only on footwear in the Marche region, which were the most exposed to the Russian market.

The European Union has banned the export to Russia of any luxury goods worth more than 300 euros. A threshold that, theoretically, allowed many transalpine companies to continue doing business with Russian distributors, as it refers to wholesale and not retail. However, banks are blocking all types of transactions with Russia.

«We respect the sanctions, but by not accepting payments from our Russian customers, the banks are preventing us from shipping our products. Since Russia accounted for 50% of our exports and Ukraine for 25%, we are firmly affected. Our stocks are bursting at the seams,» criticized Giulio di Sabato, president of the Best Showroom association and owner of the Milan showroom Sari Spazio, which distributes brands such as Philipp Plein and Malloni.

«SMEs contribute almost half of total fashion turnover; 70% of them export, 50% to Russia,» he recalled.

«They employ thousands of people. The situation is serious. Many Italian companies are at risk of going bankrupt,» he warned.

«The problem is really very serious, it’s a tragedy,» added Gigliola Maule, president of the Camera Showroom Milano association.

«We are practically impacted for two seasons, as we have not been able to deliver spring-summer 2022 and we cannot market autumn-winter 2022/23. Russia has long supported the Italian market, especially in the last five years, allowing many small brands to survive, while half of the stores have closed in the country. I don’t know if we will last another season,» he concluded.

According to figures published by the CNMI, Italian exports to Russia had already slowed down at the beginning of the year, registering an increase of 9.1% between January and February, clearly below average, and plummeted by 50.9% in March, compared to the same month of the previous year.