Italy: Recovery led by brand exports

Footwear industry: double-digit recovery in 2021 (turnover +16.2% over 12 months, according to the earliest projections) despite a -10 to -15% gap compared to 2019. Recovery is uneven: the big names are making great progress, while 2 out of 3 companies close the year with revenues below pre-Covid levels. Uncertainty is caused by a fresh outbreak of the pandemic. Higher raw materials and energy costs are slowing recovery. 

 

The footwear sector got going again in 2021 after the shock of 2020: the figures for the first 9 months – despite a weak third quarter, when domestic and foreign demand was not much higher than in the previous year, after the strong recovery of the previous quarter (compared to reduced business during the lockdown) – reveal double-digit recovery in the principal economic variables, though the gap compared to the situation prior to the pandemic has not yet been closed.

 

The best results were achieved by exports, which – led by the big international luxury brands – registered +17.6% by value over 2020 and almost reached prepandemic levels (-2.7%, despite a drop of -7% in volume); France (+25%) and Switzerland (+19%), markets traditionally associated with work on contract, performed well, as did the USA (+38%) and China (+50%, abundantly exceeding 2019 levels, by +26%). 

 

The positive balance of trade is stronger this year (+24.6%). Domestic demand, on the other hand, is slow to recover: +10.5% in household spending, still 15% less than two years ago; shopping by international tourists remains low. 

 

Recovery appears not to be for all, and is proceeding more slowly for many companies: 3 out of 10 companies have experienced further shrinkage of sales; only 46% of them saw growth above +10% (a fairly modest rate in view of the low levels of 2020). 

 

According to the panel of member companies surveyed by Confindustria Moda Research Centre, the initial projections for the end of the year as a whole suggest a rise in sales of +16.2% over 2020, while maintaining a gap of -10 to -15% below pre-pandemic 2019 levels (-13.1% is the average estimated percentage). 2 out of 3 companies are still seeing lower sales than in 2019 (“significantly lower” according to 42% of the sample).

 

Fears of a new wave of the pandemic hindering the return to normality are added to increased raw materials and energy costs.

 

The results of long months of unusual crisis are beginning to show: -82 footwear companies and -940 employees in the first three quarters of 2021, including both industrial and craft operators, while use of wage support instruments in the leather industry, though -8.7% lower than in 2020, are still exceptionally high (60.8 million hours authorised, more than 9 times the figure for 2019).

 

The July-September quarter saw recovery continue, though much more slowly than the previous quarter, due to physiological flattening of the curve, also confirmed by Istat figures on trends in industrial production in the summer months.

 

The sample surveyed by Confindustria Moda Research Centre revealed that 2 footwear companies out of 3 registered growth of revenues (56% of respondents) or at least no change (10%) compared to the third quarter of 2020.

 

Average growth of turnover was around +15.3%. The order portfolio also grew (+14%). The panel of companies surveyed estimated that sales were about +19.5% higher in the first 9 months of the year than in the first 3 quarters of 2020.