Brussels – COVID-19 pandemic, energy crisis, rising prices of raw materials and changes in international relations. Italian fashion exports have had a hard time over the past two years, but 2022 could be the flagship year of the Italian second largest industrial sector’s recovery to pre-pandemic levels.
“If we manage to contain the Omicron wave by February, at the end of this year we will be able to recover all 2020 losses and reach 70 billion euros of export earning, without losing jobs”. This is the expectation of Carlo Capasa, president of the Camera nazionale della moda italiana (the association which disciplines, co-ordinates and promotes the development of this crucial industrial sector for the country), in a long interview with Eunews.
Mr. Capasa, what do the data on Italian fashion exports tell us?
“Italian exports to the top-10 EU and non-EU countries double-digit grew in 2021. The third quarter of last year stabilized at the levels of the same period in 2019 and we recovered about 16 billion euros out of 24 lost in 2020. At this pace, we will recover the remaining eight billion in 2022 and exports are expected to grow, compared to the last pre-COVID year”.
What is the legacy of these two years of pandemic?
“There is a significant push toward aggregations into larger industrial groups. In Italy, where 90 percent of the 67 thousand companies employs fewer than 15 employees, this is a problem. We need ad hoc measures for the growth of industrial districts, through digitalized systems which help companies’ efficiency and investments. Not just e-commerce, but also Industry 4.0, virtual fashion, 3D modeling and real-time data transfer to suppliers. This is all part of our proposal, as part of the National Recovery and Resilience Plan, to invest 12 billion euros over six years in the innovation, uniqueness and competitiveness of this economic sector”.
How was this proposal received?
“I would say quite well. We need to defend our position as the world’s leading high-range manufacturers by focusing on serious investments. The Milan Fashion Week in September 2021, with its live-stream for 56 million users worldwide, demonstrated that the way forward is the implementation of complex digital tools. Moreover, we need investments on professional schools, in order to teach traditional jobs to young people, and also new facilities for workers’ re-skilling and up-skilling on digitalization and sustainability”.
In 2022, there will be many challenges, starting with rising raw material costs and supply chain difficulties.
“We will definitely feel the impact of both the energy prices’ structural issue and the inflation temporary problem. I am concerned, because all these costs cannot fall on the final price of the product. For this reason, we need to think differently about stocks and environmental and social sustainability. By now, the fast-fashion wave is on the wane, because the idea of ‘disposable clothing’ is against the logic of preservation and recycling. Thanks to digitization, we are trying to produce more limited collections: it is a virtuous process, that optimizes production and reduces warehouse waste, with a good margin in the policies on the final price of the product”.
Are you also concerned about restrictions related to the Omicron variant?
“For the Italian fashion exports, this is an important issue. In a few weeks there will be the Milan Women’s Fashion Week: we received many requests for participation from buyers and journalists coming from countries like Russia, Japan, Korea, Eastern Europe and the Middle East. Because of the strict digital COVID certificate policy, they have great difficulty to enter Italy and, in any case, they could not even access the fashion shows. This is why last Friday [January 28, ed] we proposed to the national government a ‘green corridor’ strictly controlled. People who arrive here – by invitation and in agreement with the consulate – and who got a vaccine not approved by the European Union, will have to show a negative COVD-19 test on arrival and be tested again after 72 hours: only in case of a second negative result, they can move freely for a week. We expect an answer from the government within this week: it would be a way to reactivate the economy in a responsible and safe way, also with the contribution of tourism from non-EU countries”.
Speaking of Russia, what are the risks for Italian fashion exports with the tensions in Ukraine?
“We are concerned, because every geopolitical problem has a negative impact on fashion as well. For the Italian exports, Russia is an important market and in 2021 it recorded a growth of about 20 percent. We hope that this situation will be resolved as soon as possible: when international relations are tense and goods do not circulate freely, Italy is one of the first countries affected by global trade tensions”.
Let’s close on the issue of free trade. The only drop in export turnover in 2021 was with post-Brexit UK. Why?
“First of all, because of a change in laws in the UK: now, foreign tourists can no more shop on a tax-free basis. Then, because of greater difficulties in shopping trips, which led to a collapse in the consumer/tourist segment from the Arab world. And, finally, for logistical issues, linked to the import of goods: at customs, there have been major bottlenecks and very complex stock management issues”.
Yet, we should all have been ready for Brexit long ago.
“This is true, but the lack of organization on trade has been evident. A regulation was set only when Brexit already happened. We have to remember that goods were stuck in customs and no one knew how to unlock them at the beginning of 2021, while British officials were giving conflicting information. The situation is not completely solved yet: the checks carried out on the huge amount of goods have put a strain on unprepared customs for this sudden change. The Italian fashion industry is proving that the UK has less capacity to face Brexit than the European Union“.