With the current Coronavirus pandemic, Italy has locked down all nonessential manufacturing businesses. And as per Confindustria Moda, this will have a tremendous impact on the country’s fashion supply chain as it will drag down companies that supply to many local and international brands.
Initiatives to continue supplies
To minimise looses, textile firms in the country are planning to relocate manufacturing closer to their clients. They are developing new products; and most of the entrepreneurs, including Stefano Albini, President, Albini Group, shipped goods ahead of the lockdown in order to pave way for what is hoped to be a brisk return to business.
Another textile company, Vitale Barberis Canonico, is leveraging its stock service to provide three-day delivery of goods to those companies that manufacture in countries that are not under lockdown. It is trying to build a structure that will enable it to provide quick solutions to its customers. Despite these initiatives, these companies face several concerns, including the survival of smaller, often family-run third-party suppliers have little to no access to credit and liquidity.
The Italian government’s measures issued with the March decree are not enough to support those businesses. Therefore, Andrea Crespi, Managing Director of Italian high-performance fabrics company Eurojersey has called for European intervention to directly inject cash flow and offset the costs during this two- to three-month shutdown period.
Barberis Canonico is allowing its clients to postpone payments given its solid financial situation. The company forecasts orders to decrease roughly by 20 per cent and sales to drop from March also because the lockdown in the rest of Europe might stretch beyond April 6.
Barberis Canonico also forecasts merchandise for spring 2021 to be reduced as the warehouses of the firm’s apparel clients are now packed with potentially unsold spring 2020 fashion items,
Botto Paola, however makes optimistic projections for fall 2021 season. The company expects high-performance man-made fabrics to benefit from the new scenario he forecast. According to the company a revenge spending attitude will boost the sector’s performance when health concerns are over. The company predicts a return to tailoring as a reaction to the long period of quarantine. Barberis Canonico adopts a more cautious approach as she is skeptical if customers will need formalwear that is primarily linked to social occasions, including work, travel and ceremonies. According to the company, the current scenario calls for even more innovations.
On, the other hand, Crespi views companies that have genuinely implemented eco-friendly initiatives will continue to do so. Eurojersey will continue to focus on the industry’s environmental costs. The company hopes China’s recovery will help offset losses in the first two months of the year which amounted to at least 50 percent for luxury brands.