Assocalzaturifici: THE FOOTWEAR INDUSTRY: TENTATIVE RECOVERY FOR EXPORT

Magazine for Textiles, Clothing, Leather and Technology

Siro Badon, Chair of Assocalzaturifici: “The recovery is still a long way off but the weakening of the severity of the pandemic means we can see some light at the end of the tunnel”

THE FOOTWEAR INDUSTRY: TENTATIVE RECOVERY FOR EXPORT (+3% IN VALUE TERMS) IN THE FIRST QUARTER OF 2021 BUT WE’RE STILL NOWHERE NEAR PRE-COVID LEVELS

The snapshot for the sector from the Confindustria Moda Research Centre for Assocalzaturifici Regional geography of exports: positive performances from Tuscany (+28.7% on the first 3 months of 2020), Veneto (+6.2%), Piedmont (+11.5%) and Puglia (+2.5%); downturn for Marche (-11.7%) and Emilia Romagna (-32.1%); Lombardy is stable (- 0.7%). In the league table for provinces, there was a giant leap forward for Florence (+44%, with a +16% increase compared even with the first quarter of 2019), which sits comfortably in the top spot (with an 18.2% share of the national total).

Company demographics: compared to December there was a reduction of -123 companies and -587 workers amongst manufactures of footwear and components.

Tentative signs of a resurgence in the first quarter of 2021 for the footwear industry thanks to exports (+0.3% in quantity and +3% in value) but pre-covid levels remain out of grasp. According to the latest figures from the Confindustria Moda Research Centre for Assocalzaturifici, after the unprecedented crashes in 2020, which saw the loss of about 1/4 in turnover and national production, the gradual improvement in the epidemiological situation and the resulting easing of covid restrictions in Italy and many other countries, has driven a return to slightly less negative business levels in early 2021 compared to the previous quarter, but the figures remain significantly below par.

“The recovery is still a long way off but the weakening of the severity of the pandemic means we can see some light at the end of the tunnel – explains Siro Badon, Chair of Assocalzaturifici – On the foreign front the rebound in March was at least sufficient to bring results for the quarterback to early 2020 levels, but the same cannot be said about the Italian market, where the closure of stores in shopping centres on weekends – that was only revoked last May – caused a further reduction in household consumption compared to the first 3 months of 2020. Recovery will take some time and there will be hefty consequences in terms of selection amongst companies and employment trends. In particular, production in the first quarter is down -6.4% compared to January-March 2020 and by about -30% from the same period in 2019, prior to the start of the pandemic. In the Italian market, purchases are down – 3.5% in quantity and -6.9% in terms of expenditure, with a shortfall of more than -20% on 2019 levels.”

Assocalzaturifici’s report also shows that the average price per pair of shoes bought by Italian households decreased by -3.5% in the first quarter as a result of the increased share on the total for leisure footwear and slippers, with lower prices than shoes for formal occasions. Only athletic footwear and sneakers showed an increase in consumption (+7.8% in volume) but it is far from exceptional.

In terms of exports, there were increased flows towards Switzerland (+13% in quantity) and France (+8% in quantity), both of which are linked to outsourced production for international luxury brands, while outside Europe the increase in China (+44.4% in volume and +74.8% in value compared to the first 3 months of 2020), particularly in the higher end of the market (the average price towards this market increased by 21%) especially favoured leading fashion brands. These performances have been buoyed by the country’s economic expansion, ‘revenge spending’ by consumers after the restrictions imposed upon them during the emergency phase of the pandemic, and the direct entrance of goods that had previously moved through Hong Kong (which instead saw a -11.4% reduction in incoming footwear from Italy). Current exports to China are well above pre-Covid levels in 2019 (+11.2% in volume and +24% in value). “These positive performances – continues Badon – stand in contrast to the stagnant trends for some important traditional outlet markets, like Germany (-0.8% in quantity), the US (which followed its -30% drop in 2020 with a modest +3.5% in volume and a -8.6% in value) and Spain (-5.9% in quantity), on top of the collapse in sales in the UK (with a slump of more than 40% compared to January-March 2020)”. The balance of trade for the first three months shows a surplus of 1.13 billion euro (+11.2%), although it is still -4.3% less than it was two years ago.

Trends varied at a regional level. Among the 7 export regions, there were significant increases in value for Tuscany (+28.7% on January-March 2020) and positive results for Veneto (+6.2%), Piedmont (+11.5%) and Puglia (+2.5%). On the other hand, Marche (-11.7% overall, with Fermo and Ascoli in negative territory once again, with -16.5% and -22.7% respectively and a timid +4.5% for Macerata) and Emilia Romagna (-32.1%, with a logistics-linked collapse in Piacenza’s flows, -80%, and no change for Forlì-Cesena, +0.5%) experienced new falls. Lombardy (-0.7%) is essentially stable. However, with the sole exception of Piedmont, all regions are below 2019 pre-Covid export levels. In the league table for provinces, there was a giant leap forward for Florence (+44%, with a +16% increase compared even with the first quarter of 2019), which sits comfortably in the top spot (with an 18.2% share of the national total). In assessing these figures we do, however, have to consider distortions resulting from situations where there are discrepancies between the manufacturing province/region and the place where export goods are actually dispatched from. This explains the strong recent growth (thanks to new logistics sites, that are often linked to online sales or storage facilities for luxury brand multinationals) in exports from areas that do not have a deep tradition in footwear manufacturing; as well as the sudden slumps.

Finally, in terms of company demographics, at the end of March, there were 4,097 active footwear manufacturers in Italy, across both industrial and craft sectors (55 less than in December 2020, which corresponds to -1.3%) and a workforce of 71,644 (-238 or 0.3% less). When component manufacturers are taken into account, the fall compared to the final balance for 2020 is even more marked: -123 enterprises and -587 employees. These figures do raise some concern for the stability of employment in the coming months, especially when the ban on dismissals is lifted. The wage support hours (CIG) authorised by INPS in the first four months of the year for companies in the Leather Supply Chain remain exceptionally high – 24 million – despite being – 6.8% down on the same period last year. To put this in context, in the same period two years ago, prior to the outbreak of the pandemic, there had been 2.8 million authorised hours, while 10.3 million hours were authorised in 2010, at the height of the global economic crisis. Campania (+53%), Emilia Romagna (+28.5%) and Umbria (+92%) are the regions with the biggest increases compared to 2020. Tuscany (-2.2%) in the region with the highest number of hours authorised in the quarter (6.1 million), followed by Campania (5.1 million) and Marche (3.7 million hours).

 

 

Source: www.assocalzaturifici.it