The trends in the first few months of 2020 as recorded by Confindustria Moda Research Centre for Assocalzaturifici:  THE ITALIAN FOOTWEAR INDUSTRY: A STEEP DROP IN EXPORTS (IN MARCH – 33.7% BY VOLUME AND -30% BY VALUE) AND DOMESTIC SALES (-33.7% IN THE FIRST FOUR MONTHS OF THE YEAR BY VALUE, -29.7% BY VOLUME)

Covid-19 has had serious repercussions for Italy’s footwear industry, which registered a steep drop in both exports and domestic sales in the early months of 2020. The figures collected and processed by the Confindustria Moda Research Centre for Assocalzaturifici speak clearly: in the month of March, exports were  -33.7% lower by quantity, -30% in terms of value, while domestic consumption dropped -29.7% by volume, -33.7% in terms of expenditure. “The figures confirm the negative trend revealed a few weeks ago in our survey of the impact of the pandemic on Italy’s footwear industry, conducted in the midst of the lockdown,” reports Assocalzaturifici Chair Siro Badon. “In the first quarter of the year, enterprises suffered an average drop in sales of -38.4%,and the industry is estimated to have lost 1.7 billion euro. Moreover,use of wage support in April-May increased 2437%, with 31.5 million hours authorised, as compared to 1.2 million in the same period in 2019. This means almost four times as many hours as in the whole of last year, in only two months. The situation was made critical by the combination of a number of negative factors:the impossibility of working during the medical emergency and household demand, which was heavily penalised by the interruption of sales through brick-and-mortar stores in March and April, plus a tendency to be very cautious about making purchases. We attempted to combat the effects of this slowdown through intense dialogue with national institutions, requesting reinforcement of line 394. It is essential for Simest to be able to provide funding to Italian companies participating in international trade fairs held in Italy, such as MICAM, scheduled for September. Some of this funding must take the form of non-repayable grants. This is the only real way for small to mid-sized enterprises to get going again on world markets”.

The survey of household purchases reveals widespread shrinkage in all product categories, with a decrease more than 30% in terms of both volume and value compared to January – April 2019 (with the exception of slippers and lounge footwear, down -17% in terms of the number of pairs and -16% in terms of expenditure) with an average drop in price of -5.7%. The Italian market has slowed down sharply, despite the understandable growth of online purchases. According to the market research firm Sita Ricerca, web sales in the fashion industry grew in the first quarter of the year by +14% in terms of value to represent a 23% share of total expenditure, as compared to 13.1% in 2019.

 

In  international trade, 52.7 million pairs of shoes were exported in the first 3 months of the year – including pure marketing operations: more than 9 million less than in January – March 2019, worth 2.43 billion euro (-14.7% by volume, -9.2% by value). The trend was destined to worsen in April, another month of prolonged inactivity, when Istat’s monthly index of production in the footwear industry registered a drop of -89.3%, following upon a -55.2% drop in March. A decline of close to -20% by volume was registered in exports of shoes with leather or fabric uppers (-17.4% for both types compared to the first three months of 2019) and slippers (-20.5%). The drop in exports of synthetic shoes was less marked (-8.6%), the only sector to reveal a slight positive trend in terms of value (+1.2%).Breakdown by geographic area reveals a significant drop both within the EU (considering 27 countries this year, following Brexit) and outside the EU. Flows to EU markets were down -12.6% in terms of volume and -8.2% in terms of value, while exports outside the EU shrank even further, -18.2% in terms of quantity and -10.1% in terms of value. Exports were down on all markets, with very few exceptions only one of the top 15
destinations for Italian footwear exports to grow in volume was Poland. South Korea
registered growth of +17.2% in terms of value while limiting losses in terms of quantity
to -2.7%. Exports to Germany, which already revealed a negative trend in 2019, dropped -6.1% in terms of number of pairs, -3.3% in terms of value. Exports to China and Hong Kong dropped sharply (-23% in terms of quantity for both), while the drop in the number of pairs exported to CIS countries was similar (-23.4%). The USA also performed poorly (-15.2%). Exports to Switzerland and France, which ranked first and second in terms of value, dropped by more than 20% in volume. The trade balance for the first three months of the year remained positive by 1 billion euro, but shrank by -15%.