Italy’s leather goods segment is continuing its recovery in the third quarter of 2021 as well, but the levels reached in 2019 are still far. So: good on 2020, but only 1 out of 4 companies interviewed has claimed to have reached or surpassed the revenue reached during the January-September period of 2019. Simply put, luxury brands continue their amazing run, but SMBs struggle. According to estimates by the Economic Center of Confindustria Moda, conducted for Assopellettieri, revenue is between 15% and 20% lower than the same period of 2019. The price increase of raw materials and energy, along with the concerns regarding the pandemic, are the main clouds in the horizon of 2022.
Good on 2020, not so much on 2019
Italy’s leather goods’ segment increased its revenue by 19.8% and orders by 24.3%, during the 3rd quarter of 2021. The first 9 months closed with exports up 23.7% on yearly base, while sales within the borders grew 16.3%. Yet, pre-pandemic levels remain distant. Exports are still 10% lower and retails sales are -13%.
Luxury brand’s speed
While everything is happening, luxury brands travel at a different speed than SMBs. The proof resides with exports towards France (which has clear third-party dynamics), up 33% on 2020 and 20% on 2019. China also performed well (42.5% on 2019), along with South Korea (+23% compared to two years ago). Meanwhile, Europe isn’t performing nearly as well, with the UK, Switzerland, and the Netherlands at the bottom of the ranking. Small businesses continue to struggle, as 3 out of 4 interviewees published revenues below pre-Covid. And more: 42% say their revenue is “much lower”.
Annual forecasts
According to the projections for the entire year (2021) based on the sample research conducted by Assopellettieri, Italian leather goods should close the year with a 25% revenue growth, but still with a gap of between -15% and -20% compared to 2019. Assopellettieri does point out that the progressive recovery currently taking place is being slowed by the strong increase of raw material prices and energy costs. While the future remains uncertain due to the pandemic’s evolution, the volume of orders during the first 9 months of 2021 saw 165 businesses closing and 2 out of 5 declaring a decrease in the number of employees.
Read also:
