...a sign that the prolonged crisis is now being felt by many sections of the population, and no longer only by the poorest. The situation described in the survey of the Market Research Office of Assocalzaturifici – the association that represents Italian footwear manufacturers and that, as every year, has put together a report on its member companies – confirms that while the footwear industry has lots of „foreign“ highs, it also has many „domestic“ lows.

Production registers +2,9% in value and +1,4% in quantity (first 3 q of 2013)

Footwear manufacturers are finally enjoying a return in production growth, especially due to the acceleration registered in the third quarter of 2013, which has brought about positive changes not only in value (as already noted in the first half of the year), but also in volume. The average increase in production in the first nine monthes of 2013 is 1,4% in terms od quantity and 2,9% in term sof value.“This, however, is still only a partial recovery, and one achieved against a very low starting point. Even if confirmed in the results of the last quarter, such a recovery will not compensate for the decline registered in 2012 (Which closed at -4.4%, equal to in excess of 9 million fewer pairs of shoes produced compared to 2011),“ explained Cleto Sagripanti, President of Assocalzaturifici. „Nevertheless, this result may be viewed as a sign of vitality in the Italian footwear sector.“

Domestic sonsumption: -4,8% in quantity despite discounts

Consumption in the first nine months of 2013 fell by -4,8% in volume and 7,1% in value, signalling a further decrease in average prices due mainly to two factors. Consumers are more careful about what they buy, and demand has shifted towards products with a more favourable quality/price ratio. At the same time, however, distributors have to „chase consumer“ with aggressive discount policies.

„Traditional retailers,“ explained Mr Sagripanti, „are among the elements of the distribution chain most affected by the crisis, with shoe shops registering a double-digit decline. As if that wasn´t enough, discount/slashed prices/sales account for more than 50% of total sales, due to the increase in the number of promotions throughout the year and not only during the canonical sales periods. In addition, difficulties in the retail industry often result in late payments and minor loan defaults that end up undermining the entire supply chain´s financial system, being transmitted upstream from customers to suppliers.“

Forecast: Real recovery is still a long way off

The current situation is expected to continue for the first half of 2014, for which the businesses surveyed mainly expect an increase in orders, although as many as 38% expect a decrease in production. Foreign orders are expected to far exceed domestic orders, as in 2013.

„Once again,“ said Cleto Sagripanti, „the industry will be marked by highs and loss: successful forays into far-off foreign markets will be contrasted by an internal market in steep decline. In our industry, it is no longer enough to export, even to a large number of countries: it is important to be really global, to sell practically everywhere.“

„For this to be possible, however,“ added the president of Assocalzaturifici, „another of Italy´s structural problems and that is access to finance. If you then consider the problem of defaulted and delayed payments, it is clear that access to finance is the first constraint on the growth of Italian firms, and therefore the first constraint on internationalisation.“

(23/01/2014)