The snapshot for the sector from the Confindustria Moda Research Centre for Assocalzaturifici
Milan, 08 March 2021.
Siro Badon, Chair of Assocalzaturifici: “As well as losing about 1/4 of national production and turnover, we also have to report a severe reduction in consumption by Italian households, in both expenditure (-23.1%)
and volumes (-17.4%).
The Covid-19 pandemic has hit the Italian footwear industry hard, with double-digit reductions across all the main variables. According to the latest figures from Confindustria Moda Research Centre for Assocalzaturifici, compared to 2019, turnover in 2020 was down to 10.72 billion euro (-25.2%) and Italian production fell to 130.5 million pairs (-27.1%). There was also a significant decrease in exports, in terms of both value (-14.7%) and volume (-17.4%).
“The year 2020 had severe economic consequences for our sector – explains Assocalzaturifici’s Chair, Siro Badon. – The data is clear. As well as losing about 1/4 of national production and turnover, we also have to report a severe reduction in consumption by Italian households, in both expenditure (-23.1%) and volumes (-17.4%). This was a major drop, despite a doubledigit increase in online sales, which was not sufficient to offset the collapse of sales linked with tourism in Italy, especially in the luxury segments. And if we factor in the criticalities emerging from the company demographics – with reductions of -4% in both the number of companies and the direct workforce, as well as a spike in wage support (C.I.G.) in the Leather Area (+900% in the number of authorised hours, ten times 2019 levels) – the picture is anything but comforting”.
Assocalzaturifici’s report looks in detail at exports, with this analysis revealing that of the top 10 foreign markets in value terms, there was an increase for South Korea alone (+14.3% in the first 11 months), although it too was down -5.2% in quantity. Losses were more limited in Switzerland (-7.6%, the destination for products produced by subcontractors for international luxury brands) and China (-4.4%), which saw a strong recovery (+43%) in the two-month period October-November. There was a marked reduction in sales towards partners within the European Union (-13% in value for the EU27) and outside the EU (-18%), where North America saw a loss of -30% in value, with -20% for the CIS area, -25% for the Middle East and -13% for the Far East. The balance of trade surplus is expected to fall to 4.2 billion euro (a -14% reduction compared to 2019).
After the collapse in levels of business during the first part of the year, as a result of the lockdown, there was just some respite in the severity of the decline in the next two quarters (although this still remained in double-digit territory), as opposed to a V-shaped recovery. The second wave of the virus in the autumn immediately put a stop to the tentative hints of a recovery (in September foreign sales and purchases from Italian households were on a par with levels for the same month in 2019). In particular, in the final quarter of the year exports and consumption (with sales over Christmas affected by the restrictive measures) were still very unsatisfactory.
“The trend is expected to remain negative in the first quarter of 2021 – says Badon – after beginning with a very lacklustre sales season: according to our surveys, the sector’s entrepreneurs expect an additional average reduction in their turnover of -15.1% in year-onyear terms. The recovery is clearly put off until the second half of 2021, if we assume that a satisfactory and comprehensive vaccination plan will progressively restore normal conditions, even though a return to pre-Covid levels is still some way off”.
In terms of consumption, according to Sita Ricerca’s Fashion Consumer Panel for Assocalzaturifici, 26 million less pairs of shoes were bought in Italy in 2020 compared to the previous year. The average price per pair fell by -6.8% including as a result of the greater use of slippers and informal footwear with a lower unit value during the lockdown when many people were at home.
The most severely affected merceological segments were “classic” shoes for men and women (which saw reductions of just under -30% in quantity), while for children’s footwear and sports shoes/sneakers the fall was around -15%. The reduction was less severe in the slippers and lounge footwear segment, which fell by -6.1% in terms of the number of pairs sold and -5.3% in terms of expenditure.
With regard to sales channels, there was a strong increase in online sales (+30% in quantity and +17% in expenditure). Online shopping’s share of the total market (following its constant increase in recent years) went from 14.1% in the final balance in 2019 to 21.4%. Just seven years ago (2013), online shopping accounted for a mere 3.6% of Italian families’ purchases of footwear.
All other sales channels closed 2020 with major losses: -28% in pairs purchased from traditional
retailers (with a -42% reduction in expenditure); -44.4% in the sales of itinerant traders; reductions of between -20 and -25% for retail chains, department stores and specialised large stores.