World Footwear


Italy: footwear SMEs in difficult situation

Jan 26, 2021 Italy
Italy: footwear SMEs in difficult situation
The Italian government has split the country’s regions into three zones, which determine the extent of restrictions applied in each moment. There are currently no restrictions to footwear manufacturing, but Assocalzaturifici's President says the situation is not good for SMEs
The Italian footwear industry continues to operate normally. There are no limitations in this respect, but according to Assocalzaturifici's President, Siro Badon, “the situation in which SMEs - the backbone of the footwear industry - find themselves is not good”. Historically, these firms tend to sell their goods abroad rather than on the domestic market, so they have been “hit particularly hard” by the pandemic. “On top of this, there still is not a sufficiently high level of digitalization in the sector and this is testing their resilience to the limits at this particular moment in time”. The Italian Footwear Association is trying to increase awareness amongst their member companies on the topic, by launching “specific programs and initiatives, but the path is still long”.

Current Situation

The system introduced by the Italian government splits the country’s regions into three zones, identified by three colours (yellow, orange and red) and determines the extent of restrictions regarding several aspects such as mobility and shopping, and opening hours for bars and restaurants.

Travel and mobility restrictions do not apply in the case of proven work purposes. As a result, there are no hold-ups in the production chain and in the supply of raw materials - except, as far as the latter are concerned, "where difficulties arise in dealing with countries which have adopted different means of combatting the epidemic".

Retail sales are curtailed in the red zones. Shopping centres and outlets are closed to the public at weekends. "It’s also true to say that our changed way of life, which for a large portion of the population translates into smart working, together with the aura of uncertainty surrounding the future have greatly diminished the desire to buy. And even e-commerce sales, which have soared rapidly - often out of necessity - have not helped significantly to resolve the crisis the sector is going through", states Siro Badon.
At present, there are no specific measures in place for footwear and leather goods companies and Assocalzaturifici is trying to use their influence to “put pressure on the institutions to ensure that the various elements of the supply chain obtain financial support to compensate their losses".  

2020: a Bad Year for the Industry

According to Assocalzaturifici, the "reintroduction of restrictive measures, weak sales volumes over Christmas and the fact that revival of demand has once again been delayed, will have serious repercussions on the resilience of the sector". In 2020, the sector registered a reduction in the number of active companies (-101 in the first 9 months) and in the workforce (down by approximately 2 600). If component manufacturers are added to the equation, the negative balance rises to -231 companies and -3 453 employees. "So, despite the boom in online sales, 2020 is expected to be a bad year for sales of footwear in Italy - also in view of the drastic drop in tourist flows from abroad and the loss of revenues deriving from them, particularly as regards the luxury segments", Mr. Badon concludes.   

Footwear Industry in Italy

Italy, one of the leaders in the global footwear industry, faced various macroeconomic complications in 2019. With domestic consumption still stagnant and international markets growing slowly, fashion brands registered a modest increase in the value of exports. This brought the Italian trade surplus to its highest level in 5 years, whereas production and export volumes fell, according to the World Footwear Yearbook (available HERE).