Italian fashion industry expects record results in 2022
“In 2022, we are going to reach and even exceed the level of sales generated before the 2008 crisis, recording the [Italian] fashion industry’s highest revenue in the last 20 years,” said Carlo Capasa, president of the Italian Fashion Chamber, speaking on Wednesday at the presentation of the forthcoming Milan Fashion Week Women. Of course, Capasa could not avoid underlining the critical issues currently affecting the sector, above all the rise in energy costs which is severely penalizing Italy’s supply chain, manufacturers especially. Still, the outlook for the final part of 2022 remains optimistic.
The 2022 revenue of the Italian fashion and luxury industry as a whole, including textiles, leather goods, apparel, footwear, jewellery, beauty products and eyewear, is expected to reach €92 billion, up 10.5% over 2021. A forecast that is justified by an “extraordinary” performance in H1, which closed with a 25% rise in revenue. “Even if the sector was to stop growing in H2, thanks to the record-breaking first six months of the year we can predict a rise in sales in the region of 10-11% for 2022 as a whole,” said Capasa.
These positive results are partly explained by the price hikes introduced to compensate for the increase in energy and raw material costs. As noted in the report published by CNMI, “excluding the [consumer] price increase effect, what we might call ‘real’ revenue has grown by over 18% above the level recorded before the 2008 financial crisis.”
Italian companies are currently reaping sizeable benefits from the depreciation of the euro against the US dollar, and their exports have grown significantly towards all countries, with the notable exception of Russia and Hong Kong. Between January and May 2022, Italian fashion exports increased by 21.9% compared to the same period a year earlier. For 2022 as a whole, the value of exports by the Italian fashion industry is expected to reach €79.4 billion.
In the first five months of 2022, Italian fashion sales have been booming especially in the USA (up by 59.7%), South Korea (up by 34.1%), Spain (up by 31.5%), France (up by 25.1%) and Germany (up by 20.2%). As well as in the UK (up by 22.3%), where sales showed a strong recovery after slumping in Brexit's aftermath.
In the same period, exports towards mainland China instead slowed down, growing by only 8.5%, while those towards Hong Kong decreased by 3.2%. Another negative result came from Russia, where Italian fashion sales plummeted, in the wake of the EU sanctions against the country following its invasion of Ukraine. Italian fashion exports towards Russia fell by 26%, fine jewellery exports dropped by 68%, costume jewellery exports fell by 23% and eyewear exports by 56%.
Driven by a renewed rise in domestic demand, Italy's apparel imports have surged in the first five months of the year, growing 35.5%. In the same period, the industry as a whole, including apparel, textiles and accessories, generated a €15 billion trade surplus, and is forecasting €28.8 billion for the entire 2022.
The main concern for the Italian fashion industry is the energy crisis. Capasa said that “it will have a major impact, because our manufacturing sector is energy-hungry. Previously, energy costs amounted to 10% of a textile producer's revenue. Now, they have reached the 30% threshold, and beyond. If prices will continue to rise, many companies may be forced to stop producing,” he warned.
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