Fashion textiles on the brakes. Tamborini (Smi): 'Falling volumes put companies at risk'

The use of redundancy funds 'four times higher than in the first quarter of 2023'. And the volumes of companies that, depending on the type of activity, 'are down by 20 to 70 per cent in these months'. The signs that 2024 is going to be a tough year for Italian fashion textiles are all there, despite the fact that the accounts of some made-in-Italy companies continue to have a plus sign in front of them: 'We need to understand which is the dynamic of prices and which is the dynamic of pieces: there is only one letter of difference, but the effects on the factories are very different'. He doesn't mince words, Sergio Tamborini, president of Sistema moda Italia, an association that brings together around 40 thousand companies in the textile-fashion sector, which in 2023 recorded 64 billion euro in revenues (+2% on 2022).

The figure, revised downwards compared to the preliminary results, may not be reached this year: 'It is complex to make forecasts at this historic moment,' he explains, '2024 is not a good year: the first 3-4 months are expressing the same results as at the end of last year, and it is possible that we will not reach the same consolidated turnover results as in 2023. Of course, there are another six months or so to run and it is not clear what lies ahead." According to the Annual Apparel Textile Survey conducted between March and April 2024, 62% of respondents think that conditions will worsen and only 28% believe in an improvement.

The global geopolitical situation, the rising costs of raw materials, consumer prices and interest rates are putting a strain on end customers: 'The consumer is changing, the European middle classes are no longer able to buy a certain amount of products at certain prices and are turning to other sources of supply,' Tamborini continues, 'and China is problematic, the purchasing power of the Chinese has dropped and the signs, also with regard to the luxury market, are not comforting.

Overall, the sector's exports reached EUR 38.7 billion (+0.4%) in 2023 and rose by 3.1% to EUR 6.6 billion in the first two months of the year, with the industry's upstream sector, however, suffering (-9.6%).

The management of the difficult economic moment is just one of the important steps that Smi - whose members employ around 300,000 workers - will manage during 2024: 'We will work on the renewal of the national collective labour agreement,' Tamborini continues, 'which we hope to conclude by the end of the year. It is a delicate step, both because the moment is complex and because we have to make the sector attractive to a new and young component that will have to enter to work in fashion textile companies. There are also new professional skills that are in demand'. The sector's economic trend is likely to weigh on future new hirings: 71% of companies estimate that the number of employees will remain unchanged.Among the challenges that fashion textile companies must or will have to face is that of revisiting business models in the light of both new consumer demands and new European regulations: "We are living in a moment of contradictions between the constant talk of sustainability," Tamborini continues, "and the success of phenomena such as Shein. Since those phenomena will be hard to stop, we could work on a new industry that is recycling to reuse products both in the same sector and in others'. The consortia (including Retex.Green, the one created by Smi) set up in view of the application of the law on extended producer responsibility are, however, on standby due to the lack of a decree from the Ministry of the Environment: 'We have been insistently requesting this for some time,' the president of Smi concludes, 'because it is an opportunity for Italy, as ours is one of the few countries that still keeps the textile chain intact within its borders.