World Footwear

Trade

Italians worried about the industry's performance

Dec 23, 2014 Italy
Italians worried about the industry's performance
The Italian Footwear Association announced data revealing a serious risk of another decline in domestic footwear production. If this forecast reveals accurate, it will mean Italian production will be under the 200 million pairs threshold for the 3rd time in just 6 years
After the crisis at the end of 2008, with Italian production under the critical threshold of 200 million pairs, the industry had begun a slow but steady recovery which was interrupted in 2012 by a new critical threshold of 198.5 million pairs. In 2013, with the growth of exports outside the European Union (EU), production grew over the 200 million mark. Despite the good performance last year, Assocalzaturifici believes there are serious risks that recovery will halt again for a third decline in 2014. "The data for the third quarter 2014 confirm the not totally positive dynamics of the first half", stated Cleto Sagripanti, President of Assocalzaturifici. According to the Italian Association, demand is weak in some foreign markets and falling in Italy.

According to the latest figures from Assocalzaturifici Research Department, in the first eight months of the year, there was a substantial stagnation in exports (-0.1% in quantity), but an increase in average selling prices (+4%) resulted in an increase in value terms (+3.9%). Exports reached the 154.4 million pairs sold (roughly less 110 000 pairs less than in January to August 2013 and 9 million pairs less than 2008).

The same source identified three main trends in the destination markets for Italian footwear: stability in the EU as a whole (although with different performances within each country), a cooling off of the Far East growth and a major slowdown in Eastern Europe. The negative trend in Eastern Europe, and in particular the double-digit declines in CIS countries, such as Russia (-22% in value), Ukraine (-29%) and Kazakhstan (-14%) are at the centre of the Italian worries. To these adds the negative performance in the Japanese market (-5%).

"The export situation is very worrying, mainly because certain countries, our historic customers, such as Russia, Ukraine and Japan, are in the throes of an economic crisis that cannot avoid having repercussions on our companies", adds President Sagripanti, concluding: "It will require some time for other countries to take their place and this constitutes the real risk of this new decline that seems to be looming on the horizon".

In the meantime, a survey by Assocalzaturifici to a sample of their members, showed that in the first nine months of 2014 production was hit with an average reduction of 2.3% in real terms, which, according to the Italian Association can lead to a new decline in the industry's output below the 200 million threshold.

Facing such negative forecasts, Assocalzaturifici and its President, Mr Cleto Sagripanti, are claiming the need to take exceptional measures to avoid another downturn in the footwear industry, which would mean the third dip in a period of six years. Again, Assocalzaturifici is claiming the need to go ahead with the compulsory origin labelling legislation, an indispensable measure to protect the industry in Europe. Further support from the government, in the form of tax credit for expenditure in innovation and a reduction in the taxation of investments for the renewal of collections and the production of samples are other examples of the measures the Association is asking for.

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