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Italy is fashion paradise lost as the domestic market slumps and retail prices fall

Travel certainly broadens the mind. On the train to the Micam footwear fair in Milan this week I fell into conversation with a buyer from Nigeria.

She told me of her regular frustration at buying from Italian companies because their size ranges are too small. In her two shops in the capital city Abuja and in Lagos, she has plenty of demand for high-fashion women’s shoes in sizes up to 43 and 44, but is often left frustrated at the choice from southern European suppliers. British brands hoping to trade with this fast-developing west African market, please note.

The Italian footwear industry certainly needs to find new customers outside its borders. The noticeably lower footfall at the show, several exhibitors told me, was largely due to the number of stay-away domestic buyers. The reasons given ranged from “the weather was nice on Sunday for the first time in weeks” to the more ominous “too many of them owe us money so daren’t show their face”. It was not so long ago that the British view of Italy was of a fashion paradise in which indies thrived while being served by home-based manufacturers of fine product. In short, all the things some would like the UK and Ireland to be.

Unfortunately for Italy the reality is somewhat different. It has experienced a fall in the number of small indies for some years now and the same thing has been happening among the thousands of family-owned manufacturing units in the textile, clothing, footwear and accessories sectors. In his review of the Italian market in 2013, Cleto Sagripanti, the president of footwear trade body Assocalzaturifici, which organises Micam, reported that production had increased by 3.3% in value and 1.8% in volume.

The value of exports rose 5.6% to just over €8bn, while pairage rose 2.6% to almost 220 million pairs. But this good news masked a dangerous reality. Describing a “collapse” in domestic consumption, the trade body revealed that in 2013 purchase volumes in Italy slipped by 4.1% while value dropped 6.1%. The differential was caused by a “significant” 2.1% fall in average prices. Sagripanti observed: “The dramatic fall-off in domestic consumption and retail sales cannot be overlooked.”

The myth that Italians are happy to pay more for their fashion was burst by the revelation that in 2013, 57% of domestic purchases in Italy were prompted by “discounts and slashed prices”. All sounds terribly familiar, doesn’t it? The shoe trade body estimates that the independent multi-brand retailing sector is “suffering considerably”, with drops of 10% to 15% in volume and 15% to 20% against the background of the prevailing deflationary spiral. Sagripanti pointed out the dangers to the Italian footwear industry of the ongoing decline: “This implies a desertification (sic) of our market and the inestimable loss of a distribution heritage that is one of the competitive advantages of the Italian industry; the ability to understand our consumers and detect emerging trends through the retail distribution. No domestic industry can be strong without a domestic market and no domestic market can exist without a healthy distribution system.”

The report also included a familiar Italian plea for country-of-origin labelling on product. “In Europe, the risk is that triggering a battle based purely on prices will end up making production in Europe unsustainable, even at the higher end of the market.”

Last year, Italian footwear exports to the UK increased 5.4% by value, implying that we are buying fewer, more expensive, shoes and boots from them. If the Italians want to see what their future could look like they should examine the structure of the UK market. And maybe start making some larger sizes for keen Nigerian buyers.

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