Coronavirus crisis has abruptly interrupted many businesses and industries, plunging many sectors into a crisis from which a way out is still not to be seen. The artisans’ sector, in particular, is struggling to get up and is further tested due to fashion brands asking for a reduction in payments or extensions to make up for the losses of unsold goods.
Italy normally guarantees the luxury sector 40% of manufacturing, but today this percentage has rapidly fallen.
According to reports to Reuters, Hugo Boss and Max Mara have tried to obtain discounts of 8% and 7% respectively on their products. Boss has also requested an extension of payment equal to 120 days from delivery against the 10 expected days. Reuters also spoke to some artisans, who reported a 20 to 50% drop in orders in May and June.
David Rulli, president of the fashion section of Confindustria in Florence, warns of the risk of the disappearance of small and medium-sized enterprises precisely because of the drop in demand: “If the situation does not return to normal in the next two months, the fear is that from September onwards the situation will further worsen and that many luxury suppliers, in particular the smaller ones, will fail ”.
According to Bain, the consulting agency, the demand for luxury clothes and accessories in the world could drop by 35% this year. If, however, some luxury brands are working to lower prices, there are more powerful fashion houses such as Chanel, Gucci, and Louis Vuitton that are increasing prices of leather pieces, imagining a scenario in which the wealthier consumers will continue to buy luxury goods.
Concerning the orders for raw materials, Filippo Baldazzi, CEO of Serica 1870, the textile company that supplies Brunello Cucinelli, Kering and LVMH declared: “We have enough orders to arrive until July, but I am very worried about the second part of the year”. He added that: “At this time of year, I would usually be presenting fabrics for next year’s fall/winter collections, but none of my clients are thinking about it at the moment. And then, you can’t present the fabrics in a video call, you have to touch them”.