Siro Badon, Chair of Assocalzaturifici: “To get through this difficult period we need to invest in ourselves and in our skills. It is essential to train new professionals that are able to innovate Italian footwear manufacturing companies”
THE ITALIAN FOOTWEAR INDUSTRY: IN THE FIRST HALF OF 2019 EXPORTS INCREASED BY +7.1% IN VALUE
Exports are the only positive note within the sector, even though volumes decreased. On the employment front the number of companies and the industry workforce continue to fall: -119 footwear manufacturers (including both industrial and craft operators), which amounts to a -2.6% reduction, and 492 less workers (-0.7%) compared to December 2018.
Italian footwear appeals to foreign markets: in the first six months of 2019 Italian exports for the sector increased significantly by +7.1% in value (the average price is now 47.55 Euro/pair, +8.2%). This figure comes from the report on the Italian Footwear Industry–First half of 2019 – that was prepared by the Confindustria Moda Research Centre for Assocalzaturifici. The snapshot to emerge from the sectoral report reveals that, despite the performance of exports, certain difficulties still remain due primarily to chronically weak domestic consumption - after a decade of slow decline, in the first half of this year the reduction in household spending intensified (-3.7% in quantity, with much more negative trends for traditional retail). To this we must add the climate of uncertainty at an international level: from the probable continuation of trade tensions and protectionist approaches, to the slowdown of major economies (foremostly China and Germany), through to the lack of a recovery in key markets for certain footwear manufacturing districts. These include Russia where, after a trend reversal in 2018, we are once again seeing reductions of over 15%, and then we have the uncertainties over the timing and mechanics of Brexit, with the danger of a “no deal” still looming large. “To get through this difficult period we need to invest in ourselves and in our skills – states Siro Badon, Chair of Assocalzaturifici –. It is essential to train new professionals that are able to innovate Italian footwear manufacturing companies and fully espouse our tradition and the standards of excellence that characterise our production. Training, combined with targeted internationalisation strategies and important trade fair events like Micam, is the concrete response through which we can kick-start the process of relaunching Italian footwear and confirm our global leadership. The sector is crucial for our economy and can be a driver for Italian industry as a whole".
The evolution of foreign sales, that was positive overall and led to a significant consolidation in the trade surplus for the first 6 months of the year (+10.7%), actually conceals acute differences in company performances. Indeed, alongside outstanding results for many international luxury brands, which a large number of companies operate for as subcontractors (as demonstrated by the significant increases in trade flows towards Switzerland - a traditional logistics and distribution hub for major brands - and France), there is also a fairly significant number of companies still struggling to get back on track and experience positive trends. There is no shortage of expanding markets (with double-figure increases in value for North America and the Far East), but these increases are often accompanied by reductions in volume (of almost -4% for the US and Canada; more limited decreases, -1.1%, for countries in the Far East, with Japan faring poorly).
Specifically, production fell by -2.3% in volume, although smaller companies in the sample that was surveyed (i.e. those with turnover of less than 15 million) experienced reductions of -4.5%, while in terms of domestic consumption the only segment to perform positively was sports shoes/sneakers (+0.8% quantity and +2.9% in value), with significant decreases for “classic” footwear for men and women (-9.5% and -8.3% in volume respectively). With regard to sales channels, online sales continue to increase (+10.3% in volume and +17.3% in expenditure), accounting for 11% of the total volume of sales in the period, while performance was poor for traditional retail (-11% in pairs sold, with a reduction of almost 16% in expenditure) and itinerant traders (with reductions in the region of -14%).
In terms of employment, the reduction in the number of companies and the industry workforce continued: the first half of 2019 closed with a balance of - 119 footwear manufacturers (including both industrial and craft operators), which amounts to a -2.6% reduction, and 492 less workers (-0.7%) compared to December 2018. These reductions are even more severe if we also factor in - in addition to footwear manufacturers - producers of components (-75 companies and -493 workers). Therefore, on the whole, we have 194 less companies and 985 less workers compared to the end of 2018. In geographical terms, there were reductions in the number of companies for all seven of the main footwear manufacturing regions, with the sole exception of Lombardy (+13 units). In terms of the workforce, there were increases in Tuscany (+117 workers) and Puglia. As was the case in 2018, Marche is the region that fared worst, in terms of both production units (-95) and number of workers (-1164). Veneto ended the first half of the year with a reduction of 30 companies, considering footwear manufacturers and component producers, and a small reduction in its workforce (-20 workers compared to the end of 2018). The number of active companies in Emilia Romagna and Campania fell by 12 and 6 units respectively, with a corresponding loss of 149 and 128 jobs. The workforce in Lombardy fell by 57 units (-0.8%). Finally, in the first 6 months of the year authorised wage support hours for companies in the leather supply chain increased by 27.1% to almost 4 million hours.
Milan, 06 November 2019