Assocalzaturifici - Trade Association for Italian Shoemakers (Z1621) 16.09.22-1

Assocalzaturifici Chair Giovanna Ceolini: “The industry as a whole has seen significant recovery, but high energy costs, raw materials costs and the consequences of the conflict between Russia and Ukraine (with the value of exports to the two markets down -30%, a total drop of -46% since the start of the war) are putting short-term growth at risk. Our member companies are satisfied with sales to North America and the main EU markets, though spring lockdowns slowed sales in China. But recovery has been uneven: while designer brands are performing very well, half our member companies have not yet returned to pre-Covid sales figures”


Exports grew 24% in terms of value and 15% in terms of quantity in the first 5 months of the year as compared to the same period in 2021

Milan, 16 September 2022

The Italian footwear industry continues on the road to recovery, with further growth in sales (+14.5% in the sample of member companies surveyed) in the first half of the year, following upon a total growth rate of +18.7% in 2021. The figures emerging from the latest report by the Confindustria Moda Research Centre for Assocalzaturifici reveal double-digit growth in exports and Italian household purchases. According to Assocalzaturifici Chair Giovanna Ceolini: “The industry as a whole has seen significant recovery, but high energy costs, raw materials costs and the consequences of the conflict between Russia and Ukraine (with the value of exports to the two markets down -30%, a total drop of -46% since the start of the war) are putting short-term growth at risk. Our member companies are satisfied with sales to North America and the main EU markets, though spring lockdowns slowed sales in China. While designer brands are performing very well, half our member companies have not yet returned to pre-Covid sales figures.”

In detail, exports grew 24% in terms of value, 15% in terms of quantity in the first 5 months of 2022 as compared to the same period in 2021. This performance exceeded pre-pandemic volumes of sale (+2.4%), though it is significant that sales of footwear with leather uppers, traditionally an Italian speciality, are still well below the volume registered three years ago (-10.5% compared to January - May 2019). Among export destinations, the European Union is performing well (+23% by value), led by France and Germany (the two top foreign markets for Italian footwear in terms of volume); growth in the US and Canada is even stronger (around +65% in terms of value), supported by advantageous exchange rates; the Far East is also performing well, +15% in terms of quantity) due to lockdowns imposed by the authorities in a number of major cities; the Arab Emirates performed particularly well; and sales to the United Kingdom are recovering following the post-Brexit slowdown. Exports to Russia and Ukraine have halted due to the outbreak of war, with dire consequences for the footwear districts that traditionally serve these markets.

The industry’s balance of trade is positive by 2.18 billion Euro (+14.5% compared to January - May 2021).

Sales on the domestic market continued to approach the (unsatisfactory) levels of three years ago: household purchases were up +18.2% by value and +14% in terms of quantity in the first 6 months of the year. All market sectors performed well in January - June 2021: sales of classic men’s and women’s footwear styles (which suffered the most from lockdowns) grew by around +20% in terms of both quantity and value, while sales of children’s and teens’ shoes grew by around 10% (approaching pre-pandemic levels). Sales of sporting footwear and sneakers were up 13% in terms of volume (the only sector to exceed 2019 figures); slippers did not perform so well (just over +7%), though this increase was sufficient to bring the sector up to pre-pandemic levels, in view of the increased use of slippers during the months of isolation and therefore less shrinkage of sales in this sector in 2020. As for online sales: following the boom registered at the height of the pandemic in 2020, which forcibly changed people’s buying habits, and the slowdown of 2021, in the first 6 months of this year online sales slowed further (with a trend of -8.9% in terms of volume, -4.4% in terms of value), while still remaining well above the figures for the first half of 2019 (+24% in terms of quantity).

Shopping associated with international tourism has improved somewhat, but the number of tourists travelling to Italy and their spending, while well above 2021 figures, according to surveys conducted by Istat and Banca d’Italia, are still -25% to -30% lower than in the corresponding months in 2019.

The return to regular levels of production following the shock caused by the pandemic reversed the trend in employment: chamber of commerce figures indicate a positive balance as of the end of June of 1,062 employees more than at the end of 2021 (+1.5%), which is however insufficient to make up for last year’s losses. This represents a recovery in the wake of the falling employment figures of the past 6 years – during which the number of employees working in the industry fell by more than 6,400 – accompanied by reduced use of social security instruments (-80% use of wage support by the leather industry in the first 6 months of 2021, though the number of hours is still double the figure for the first half of 2019). Compared to the first half of 2021, all Italian regions report a conspicuous reduction in the number of hours of wage support authorised: Marche (-72.3%) ranked first in use of wage support during the half (1.9 million hours, equal to 24% of the Italian total), followed by Campania (1.7 million, - 76.3%). Use of wage support dropped -77% in Veneto, -89% in Tuscany (-84% in Florence), -76% in Lombardy, -90% in Puglia and about -88% in Emilia Romagna. Yet all regions still use more hours of wage support than they did before Covid.

The process of natural selection continues among enterprises, with 95 footwear factories closing in the first half of the year.

Assocalzaturifici - Trade Association for Italian Shoemakers (Z1614) 04.08.22-2


Giovanna Ceolini has been appointed acting Chair of Assocalzaturifici. In the wake of former Chair Siro Badon’s recent resignation, art.12, paragraph 6 of the Assocalzaturifici Articles of Association specifies that “in the event of advance resignation from the post of Chair, the most senior Vice Chair in terms of age will temporarily serve as acting Chair until the procedures for election of a new Chair can be completed”. Giovanna Ceolini has therefore been designated Chair, and accepted the appointment; in addition to matters of ordinary administration, she will oversee the establishment of the Appointment Commission.

“I hope to count on the support of the entire organisational structure and all our members in getting through this difficult time,” says Ceolini. “In the midst of these troubling times, as industry slowly recovers from the effects of the pandemic, we are preparing for an outstanding edition of MICAM that will confirm the event’s status as an essential business opportunity and economic driver for the entire footwear industry, which plays a leading role in Italian manufacturing industry”.

Assocalzaturifici - Trade Association for Italian Shoemakers (Z1612) 27.07.22-3

Siro Badon submitted his resignation as Assocalzaturifici Chair yesterday. Elected in June of 2019, he has resigned his post for personal and professional reasons as a result of his workload in his company, which prevents him from continuing to guarantee constant availability for the association. Badon, who thanks his staff for their hard work, has led Assocalzaturifici through a difficult time affected by the consequences of the pandemic that has had such a huge impact on the footwear industry.

Assocalzaturifici - Trade Association for Italian Shoemakers (Z1609) 12.07.22-4
The Chair Siro Badon: "We don't need money randomly thrown at us as a stopgap in emergencies; what we do need is a new industrial policy that promotes our excellence, both in terms of brand and industry"

Topics that emerged in the association's annual meeting, held in Bologna

During the annual meeting of Assocalzaturifici in Bologna, the Chair Siro Badon described the current state of the footwear sector, which experienced an improvement in terms of production levels last year.

Badon explained how "Recovery must also mean coming to terms with serious uncertainty and a looming recession caused by the Russia-Ukraine conflict, which is exacerbating certain phenomena, like the spiralling costs of raw materials, energy and rampant inflation. From our survey it emerged that 7 associations out of 10 reported a worsening of their economic situation, from the second quarter of 2022. These data leave us no choice but to exercise great caution in the second half of this year. Some districts have been hit especially hard, Marche and Emilia Romagna in particular, as both regions are highly exposed on markets affected by the war; as a result they will experience a progressive and significant drop in exports from the second half of this year. The crisis caused by the conflict has inevitably become a central issue for our association. This mainly comes down to two reasons, strategic and political in nature. In strategic terms, the conflict has required different footwear companies to embrace diversification, insofar as their revenue is heavily dependent on these markets. The banking system has been hit hard by sanctions, making it extremely difficult to make sales, whereas finding different markets takes time and requires the investment of resources precisely at a time in which they are scarce, because fewer orders are being confirmed. In political terms, our government has very limited room for manoeuvre. At this time, most resources are being used to buffer the consequences of energy price hikes and for income support".

Badon's talk was followed by the presentation of the magazine "L'Impronta", an Assocalzaturifici project developed by Strategy Innovation, a spin off of the Ca'Foscari University of Venice in partnership with M&C Saatchi. Carlo Bagnoli, Full Professor of Strategic Innovation at the University's Management Department and scientific director of the spin off Strategy Innovation explained the founding myth of Italian production for footwear companies and the image of Italian footwear held by clientèle in certain countries like the USA, Russia and China, while also covering the topic of sustainability. In Impronta, Bagnoli indicates future pathways for Italian and other companies, divided into four sections: prints from Italy and the world, sustainable pathways, from the environment to social and animals, and guiding prints, recognising the right print.

Digitalisation and sustainability emerged as priorities for the industry. Badon affirmed that "Without digital skills and an approach to new sustainable production standards, not only does internationalisation become tough, but in the medium term, so does surviving global competition. Unfortunately, being good at production alone no longer cuts it in Italy. This is why two years ago Assocalzaturifici launched a few projects, mid-pandemic, in order to accompany companies on new b2b platforms including MICAM Milano Digital. Sustainability is a pillar on which a solid strategy for industry must be built. Sustainability is no longer just a whim, or a finite target: it is increasingly the starting point for footwear industries investing in research to guarantee high standards of eco-compatibility for their production processes. We strongly believe in this, in fact we have launched an important project for sustainability certification specifically for the footwear industry. VCS, Verified and Certified Steps, is a registered trademark awarded to companies that complete an assessment, measurement and above all, improvement pathway, which focuses on performance in all major aspects of business sustainability, based on internationally recognised standards. I believe this is of immense value in a market that is increasingly looking for sustainable products from sustainable companies. The value of the VCS project has been confirmed by the interest of many important companies, including large fashion groups".

SPIN 360, which has integrally implemented the entire system's logic, mathematics and programming, delivered an in-depth presentation of VCS. Spin 360 explained the project every step of the way, from the pilot phase, involving 3 companies in the footwear industry, to the presentation of districts and the illustration of the scientific committee, including business people of the industry, brands and representatives of Confindustria Moda.

The launch of MICAM was also announced, set to take place in September, with the special area: MICAM Sustainability Lab powered by VCS al pad. 3.

LIVETREND was another novelty presented on occasion of the meeting: an innovative trend and market analysis platform that collects and analyses thousands of images from e-commerce, social media and fashion shows, every single day.

Siro Badon affirmed that "Research and the study of trends are fundamental for the production of collections". I believe that today, companies need to innovate with increasing attention and invest in new technologies for the creative part regarding collections.

The LIVETREND analysis illustrates that the fashion industry will increase investments in innovation and technology over the next few years, with reference to specific figures who are up to the task of working on such contents. MICAM and Assocalzaturifici have partnered with LIVETREND to develop specific algorithms for the footwear industry, to identify trends, diversified based on the market, and with the possibility to customise search keys according to brand requirements.

Lastly, Badon described the association's activities over the last year, from projects in partnership with other Confindustria Moda associations and ICE, to the Memorandum of Intent with Sistema Moda Italia and Trade Union Organisations.

Badon did not hesitate on solutions for overcoming the crisis: "We need to restore the centrality of the manufacturing industry and plan a progressive, general cut of the cost of work. This means a structural review of the tax wedge, the downsizing of employer and employee tax burdens. This is one way of freeing up resources that would enable business people to be competitive once more on international markets and invest in communication, product and process innovation at all levels. These measures would also boost the purchasing power of Italian families and relaunch consumption. We don't need money randomly thrown at us as a stopgap in emergencies; what we do need is a new industrial policy that promotes our excellence, both in terms of brands and industry".

Assocalzaturifici - Trade Association for Italian Shoemakers (Z1606) 11.07.22-5

Siro Badon, Chair of Assocalzaturifici: “Consolidation of the recovery that began in 2021 is over shadowed by the clouds on the horizon. The effects of the Russia/Ukraine conflict, the steep rise in energy costs and the failure of raw materials price increases to slow down are halting recovery” THE ITALIAN FOOTWEAR INDUSTRY: EXPORTS GREW IN THE FIRST QUARTER OF 2022 (+21.4% IN VALUE), AS DID HOUSEHOLD SPENDING (+20.6%), THOUGH A SLOWDOWN IS ALREADY EXPECTED STARTING IN THE SECOND QUARTER. The snapshot of the industry provided by the Confindustria Moda Research Centre for Assocalzaturifici was presented at the association’s national meeting. In terms of regional trends: Veneto (+10.7% in value over January-March 2021) and Tuscany (+26.6%) continue to rank first in terms of exports (together, the two regions account for just under half of Italy’s total for the period analysed), followed by Lombardy (+33%) and Marche (+19%).

The Italian footwear industry has consolidated the recovery that began last year, with growth in exports (+21.4% in value) and household spending (+20.6%) in the first quarter of 2022. This is the snapshot of the industry provided by the Confindustria Moda Research Centre for Assocalzaturifici, presented at the association's national meeting along with the actual results for 2021, a year in which the industry’s total sales climbed back to 12.7 billion euro (+18.7%, though still below the pre-Covid 2019 figure of 14.3 billion) and national production rose to 148.8 million pairs (+13.8%).

In the first quarter of 2022, sales, industrial production, exports and domestic consumption registered double-digit growth as compared to the same period in 2021. This favoured an initial release of tension regarding employment: though the number of active enterprises continued to fall (-36 was the balance since the beginning of the year), the employment trend began to reverse at the end of March, with a timid rise over last December (+209 people, +0.3%), following the decidedly negative trend of recent years (-4,300 employees in the past two years alone). The return to a level of production that was less penalising than that of the pandemic months also resulted in a downturn of resort to social security instruments (-72% in the first 5 months with respect to 2021), though the number of hours of wage support authorised in the leather industry (7.1 million) is still more than double that of January-May 2019 (+121%).

There is still considerable uncertainty about the future scenario, requiring a certain degree of prudence, according to Assocalzaturifici Chair Siro Badon: “The progressive recovery that is bringing companies in the industry back to pre-pandemic levels (almost two out of three companies closed the year 2021 with sales figures remaining below those of 2019) has, since the end of February, faced the outbreak of conflict between Russia and Ukraine, resulting in the collapse of exports to these countries from March onwards (sales on these two markets dropped by -52% in value in March-April). The effects have been felt particularly severely in footwear districts that traditionally export to these areas (such as Marche and Romagna), which saw cancellation of shipments due for delivery and orders in their portfolio. In addition to the effects of the war, we have seen a steep rise in energy costs and no significant reduction in raw materials prices, which have been high for many months, in addition to fears of new variants of the virus”.

Taking a closer look at the figures for the first quarter of the year, it appears clear that purchases by Italian households were up +15.4% in quantity and +20.6% in value in the first 3 months of 2022 over the figures for the same period in 2021, but there is still a gap of around 10% as compared to the situation before the pandemic. The strongest recovery in terms of percentages has been in the sectors that suffered the most from the effects of lockdowns and restrictions in 2020: classic men’s and women's shoes (sales of both increased around 30%, in terms of both number of pairs and value, over the first 3 months of 2021). Shopping by tourists visiting Italy is still far from 2019 levels, despite a partial recovery of arrivals in 2021 and an encouraging start to 2022 as the situation of the pandemic improved.

Exports were up +11.7% in quantity and +21.4% in value over the first 3 months of 2021 (with average prices up +8.7%). Including pure trading operations, 58.7 million pairs were exported (-4.9% compared to the first quarter of 2019), worth 3 billion euro. EU markets are recovering (+9% in volume and +18% in value, with a peak of +22% in value in France, due to supplies of footwear to designer brands, a figure of +16% for Germany, +20% for Spain and +37% for the Netherlands). The increases in non-EU27 countries were even higher (+18% in quantity and +25% in value). These include: +70% in value in the USA (already well exceeding pre-Covid 2019 levels); a return to growth in South Korea (+16%, in terms of both value and number of pairs), after the slowdown of 2021 that interrupted a long period of growth in the previous decade; and good results in China (+28% in value). Negative trends were seen, of course, in Russia and Ukraine, particularly after the conflict broke out at the end of February. Exports to Russia shrank by -51% in value in March, while exports to Ukraine were down -95%. Cumulative figures after the first 3 months of the year – unfortunately destined to worsen as the war continues – indicate a drop of around -20%, in terms of both value and number of pairs, for Russia and -48% in value (-56.5% in quantity) for Ukraine, as compared to January-March 2021. According to Eurostat, footwear exports to Russia dropped -37% in value in the month of April, while exports to Ukraine fell by -81%.

At the regional level, Veneto (+10.7% in value over January-March 2021) and Tuscany (+26.6%) performed best in terms of exports (representing just over half of Italy’s total exports in the period analysed), followed by Lombardy (+33%). Increases of around 20% were recorded in Puglia (+22.3%), Emilia Romagna (+20.1%, despite a figure of -1% for Forlì-Cesena) and Marche (+19% despite a drop of -35% in the value of exports to Russia and -51% in exports to Ukraine). Marche (the region ranking fourth in number of exports) and Campania (ninth, with +15%) were the only regions among principal Italy’s footwear-producing areas to fail to match the figure for exports in the first quarter of 2019 in terms of value (falling below it by -14% and -21.5%, respectively).

The ranking by province is still led by Florence (+30.3%, a share of around 20% of the national total), ahead of Milan (+37.3%) and Treviso (+16.3%). Growth was moderate in Verona (+4.7%, ranking seventh); while Vicenza, the sixth ranking region, saw a drop of -19%. Good results in Fermo (the fourth province in terms of exports, at +16.6%) are destined to slow down in the months to come due to the fact that many companies in the district export to the Russian market.

The balance of trade in the industry was positive in the first quarter by 1.28 billion euro (+12.8% over the same period last year).

While the demographics for number of enterprises and employment saw a continuation of the process of selection among companies (-36 over December 2021), despite the positive balance of the number of employees (+209, or +0.3%), probably a bounce-back after several quarters of marked decline. If footwear component manufacturers are taken into account, these balances are -119 enterprises and +140 employees.

Assocalzaturifici - Trade Association for Italian Shoemakers (Z1599) 06.05.22-6
President Siro Badon Statement

"I want Assocalzaturifici’s position regarding the participation of Italian footwear companies in the Moscow trade fair to be perfectly clear: the trade association complies with the sanctions imposed by the international community against the country that started this war, but I cannot help sympathising with these companies, because the task of our association is supporting all our companies, even those that could not withdraw their requests to participate in the trade fair due to contractual obligations undertaken before the start of the war in Ukraine. Russia and Ukraine, now practically inaccessible due to the war, account for more than 50 percent of the sales of many of these companies.”

Assocalzaturifici Chair Siro Badon invites us to consider the matter more closely.

"We’re talking about shutting the door on two very important markets, right after a two-year pandemic. Companies that do business in the countries now involved in the conflict find themselves dealing with a very difficult situation. Footwear companies that work with Russia and, of course, Ukraine are not violating any European sanctions. They have worked and continue to work in compliance with international law, courageously facing the consequences of a conflict that has had a devastating economic impact on a number of Italy’s industrial districts. Districts our association represents, and for which it must speak up. Assocalzaturifici, under the wing of Confidustria Moda, is working with the institutions to ensure that no-one is left behind at this dramatic time in history. We are asking the government to pass a number of essential measures to address this exceptionally critical situation. We are equally aware of the need to promote mechanisms for structural growth of our SMEs in order to support companies’ international growth, the diversification of their products, and therefore their approach to new markets abroad. Having only a few destination markets, or depending heavily on certain high-risk countries, cannot guarantee stability and growth, as we are seeing not only in our own case but on the energy market. When the biggest supplier is out of the picture and you have no alternative, you risk a crisis. This is why we say it is time to put a stop to the controversy and invite everyone to imagine what our member companies are going through every day. They have been protecting their business relations with important customers, like so many other Italian companies that are continuing to work in the country, simply because they cannot stop, and they hope to resume their business relationships again as soon as possible. Now this is resilience, not an attempt to get around the sanctions, as some people have been implying in the past few days. And this represents my own personal hope. What we are going through is not only a time of economic difficulty, but a humanitarian tragedy. Widening or continuing the conflict would result in even greater and more dramatic economic damage not only to the footwear industry, but to the country as a whole. The increase in raw materials and energy costs is obvious to everyone, and I know that Confindustria continues to be in contact with the Draghi government, that they are aware of what we are going through. This is why I insist that this is not the time to fuel controversy in the industry, because we are facing some very important challenges.”

Assocalzaturifici - Trade Association for Italian Shoemakers (Z1590) 12.04.22-7
La Moda Italiana@Almaty closes

La Moda Italiana@Almaty in Almaty, Kazakhstan closed on a note of cautious optimism among Italian operators at the event, which was organised by Assocalzaturifici in partnership with the Italian fashion industry association EMI, Ente Moda Italia, with the support of the Italian Embassy, the practical assistance of ITA Agency, and in collaboration with the Italian Furriers’ Association AIP and the Italian leather goods association Assopellettieri. The event held at Dom Priemov in Almaty April 6 through 8 registered significant numbers of local buyers: more than 200 from the provinces of Kazakhstan, Mongolia, Tajikistan, Uzbekistan, and Kyrgyzstan. 50 Italian fashion brands represented the best of Italian fashion at the event.

The exhibition was completed with an evening event sponsored by MICAM Milano in the presence of His Excellency the Italian Ambassador to Nur-Sultan, Marco Alberti, preceded by a discussion of Fashion and sustainability: scenarios and trends in Italy and Kazakhstan, organised by the Italian Embassy in Nur-Sultan investigating the prospects of the market and the new drivers of sustainable consumption. The event, attended by the entire Kazakh fashion community, focused on VCS Verified & Certified Steps certification, a project launched by Assocalzaturifici in the last edition of the fair in the new area MICAM Green Zone and presented for the occasion to an audience of more than 30 opinion leaders from Almaty, entrepreneurs, buyers, bloggers and influencers at LA PRIMA in Almaty with the participation of Lilia Rakh, an expert on fashion for 32 years and one of the world’s top 500 fashion leaders.

The attenuation of the pandemic and the consequent upswing of international markets in 2021 has favoured recovery in Central Asia, as elsewhere. With almost 207,000 pairs and an average price tag of 83.08 Euro a pair, exports to Kazakhstan registered a growth rate of +12.8% over the previous year in the first 11 months of 2021. The regions of Marche, Emilia Romagna and Lombardy manufacture three quarters of the footwear exported to the country. Almaty also represented an opportunity to establish contact with buyers in Uzbekistan, a market that has been growing for Italian exports in terms of both quantity (+31.6%) and value (+3.8%). Together, Kazakhstan and Uzbekistan import Italian footwear worth more than 20 million Euro.

Assocalzaturifici - Trade Association for Italian Shoemakers (Z1588) 05.04.22-8

It’s almost time for La Moda Italiana@Almaty, organised by Assocalzaturifici in partnership with the Italian fashion industry association EMI, Ente Moda Italia, with the support of the Italian Embassy and the practical assistance of ITA Agency, and in collaboration with the Italian Furriers’ Association AIP and the Italian leather goods association Assopellettieri.

From April 6 through 8 the traditional trade fair will be back to help small to mid-sized Italian makers of footwear, leather goods, clothing and accessories penetrate the Central Asian market. 50 Italian fashion brands will represent the best of Italian fashion at the event. Over 250 highly qualified buyers are expected to attend the three-day event, featuring a packed programme of meetings and workshops held through partnerships with the ITA Agency, which organises an incoming programme for all the principal markets in Central Asia and all the provinces of Kazakhstan. Now a middleincome country, Kazakhstan has great potential for development and a very high rate of fidelity to Italian-made goods, demonstrating the population’s appreciation of their handcrafted quality, beyond the usual dynamics of brand awareness.

The attenuation of the pandemic and the subsequent recovery of world markets in 2021 favoured an upswing in Kazakhstan, the 44th largest market for Italian footwear exports in terms of value, 51st by quantity. With almost 207,000 pairs and an average price tag of 83.08 Euro a pair, exports to Kazakhstan registered a growth rate of +12.8% in the first 11 months of 2021 as compared to the previous year. The regions of Marche, Emilia Romagna and Lombardy manufacture three quarters of the footwear exported to the country. Almaty also offers an opportunity to establish contact with buyers in Uzbekistan, a growing market for Italian footwear exports in terms of both quantity (+31.6%) and value (+3.8%). Together, Kazakhstan and Uzbekistan import Italian footwear worth more than 20 million Euro.


According to Assocalzaturifici Chair Siro Badon: “At this time of great geopolitical tension, which has had an impact on world markets, Kazakhstan has a very important role to play. Following the social tension and dramatic clashes in the country at the beginning of the year, the government has announced a series of political, institutional and economic reforms; once they go into effect, the reforms will also improve the business climate. Kazakhstan continues to be a market of great interest for Italian companies wanting to expand and consolidate their sales in Central Asia, where Almaty is a very important logistics hub, especially for Uzbekistan. The country has of course felt the economic and financial impact of the war in Ukraine, starting with partial devaluation of the country’s currency.

But the response has been encouraging so far, as demonstrated by confirmation of orders placed for this season’s collections, which are very much appreciated by consumers with sophisticated tastes, great purchasing power and a predilection for everything Italian. To facilitate this exchange, we have signed an agreement with air carrier NEOS S.p.a. that will allow us to take our entrepreneurs to the country safely despite the difficulties involved in the current circumstances, with all the convenience of a direct flight from Milan”.

“The Almaty event has become an essential date on the calendar for the Italian fashion industry,” says Roberto Tadini, Chair of AIP, the Italian Furriers’ Association. “The Kazakhstani market is of particular interest to furriers. We are living in a very complicated time, but by working all together, with Assocalzaturifici, Assopellettieri, Emi and ITA, we continue to offer important opportunities for our companies to do business and help them bring Italian fashions to Kazakhstan.”

“I agree with my colleague, the Chair of Assocalzaturifici, that Kazakhstan, because of its geographical location and neutrality in the current conflict, stands to play an important role for exports of Italian products to former CIS nations,” says Assopellettieri Chair Franco Gabbrielli. “At this time it is very important to continue serving these markets and providing our historic partners with support. The fact that we can do this together with other trade associations in the fashion industry is in itself a great achievement.”

“Kazakhstan would seem to be the only gateway to the Russian market at the moment,” says Alberto Scaccioni, CEO of Ente Moda Italia. “We have always considered La moda Italiana@Almaty to be an event of great interest for small to mid-sized Italian companies, and it is now more important than ever to be there, due to both the country’s domestic market and its location. I'm very confident that this edition of the event will be a great success.”

Martino Castellani, Director of ITA Almaty, comments that “it has always been a pleasure to work with Assocalzaturifici, EMI and our other partners on an event that has become a tradition, but is also becoming more and more important, both for our own companies and for the local market. After the disorders of this January, the situation in Kazakhstan has returned to normal, and despite an initial drop in the value of the local currency due to the Ukraine crisis, the exchange rate has now returned to the level of May 2021, and is therefore also largely back to normal. And so we believe all the pieces of the puzzle are in place to make this edition a success, with the participation of 40 Italian companies and more than 250 buyers invited from all over Central Asia, including, of course, all the principal Kazakhstani buyers.

The ITA office in Almaty and its Punto di Corrispondenza office in Tashkent have been working on promotion of the event all over Central Asia, contacting hundreds of buyers in an area 12 times the size of Italy and meeting with great interest among them, revealing the popularity of Italian fashions among the local population”.

“Last year, Italian exports exceeded pre-Covid levels,” points out Ambassador Marco Alberti. “We are seeing new dynamism in business, as well as effective dialogue between public and private, as a result of constant commitment on the part of the Ministry of Foreign Affairs and Minister Di Maio himself. Italy is out there, and Italian companies want to demonstrate once again the importance of Kazakhstan for the growth of their exports. We’re working on this despite the difficulties inherent in the current international situation, working with ITA to take advantage of all the unused potential for our exports in the country. We’re happy that Assocalzaturifici, with Assopellettieri, AIP, the Italian Furriers’ Association, and EMI, or Ente Moda Italia, have confirmed their mission in the country, an essential opportunity to underline the quality of Italian-made goods for various stakeholders as well as the sustainability of Italian fashions and the country’s unique products.”

Opportunities for learning more about the Kazakh market organised by MICAM Milano will include a meeting with buyers and the press scheduled for 7 April at La Prima in Almaty, during an event introduced by a talk on “Fashion and Sustainability: scenarios and trends in Italy and Kazakhstan”, presented by the Italian Embassy with the participation of His Excellency Ambassador Marco Alberti, Assocalzaturifici, and a team of local bloggers, who will discuss the prospects of the market and the new drivers of sustainable consumption in the Central Asian country.

Assocalzaturifici - Trade Association for Italian Shoemakers (Z1577) 03.03.22-9
The Italian footwear industry mounted a recovery in 2021. Indeed, turnover increased by +18.7% on 2020 to reach 12.7 billion euro. However, this is still short of pre-covid levels (- 11% compared to 2019). This is the snapshot taken by Confindustria Moda Research Centre on behalf of Assocalzaturifici for a sector where luxury brands are driving exports and where distinct trends can be seen for companies (only one in three is back to pre-pandemic levels) and over which a shadow is being cast by the constantly evolving geopolitical situation in Ukraine.

“The acceleration in exports in the fourth quarter allowed the footwear industry to close 2021 with the same double-digit increases seen in the first half of the year - explains the Chair of Assocalzaturifici, Siro Badon - After the sector’s collapse in 2020 as a result of the severe impact of the lockdowns and restrictions over the two waves of the pandemic, there was a natural rebound effect in the second quarter followed by a less intense growth trend. All the main variables saw significant increases in value of between +15 and +20% (Italian household spending was up +15.6%, production and exports were up by around +17%, while turnover was up +18.7%). But the recovery is fragmented and often still not sufficiently fast, which means a significant share of companies have still not returned to 2019 revenue levels, before the pandemic began. While large international luxury groups have picked up steam and are driving sales for the sector in foreign markets, many small and medium companies have not survived the shock of the crisis (chamber of commerce data on company demographics reveal a negative balance of -171 units, equivalent to a - 4.1% drop) and many more are still experiencing difficulties, as indicated by the use of social security instruments which remains exceptionally high (albeit lower than in 2020). Moreover, there is major uncertainty surrounding Russia's military operation in Ukraine and the risks for the commercial impact on trade by Italian companies with countries that have always been important due to demand for high-end and luxury goods In 2021 Italy exported footwear to the two countries for a total combined value of approximately 317 million euro and the shortfall on pre-covid levels (where combined sales were 346.4 million euro) was gradually being eroded (after a combined increase of +9.3% on 2020)”.

In detail, exports enjoyed the second-best result ever, including net of inflation (with a final figure of 10.3 billion euro). The two leading export destinations, Switzerland and France, that are traditionally linked to manufacturing on contract, fared particularly well (with the former increasing by +16.2% in value terms on 2020 during the first 11 months of the year, and the latter up +24%). But the USA (+42%) and China (+37.5%) also saw a strong performance and the latter is now well above 2019 levels.

From the leading 20 destination markets, only 3 experienced a fall in 2021: UK, Japan and South Korea (with the latter bringing to an end its stretch of robust and constant growth over the previous years). Finally, there is concern for the Russian-Ukrainian situation which will inevitably put the brakes on the recovery described above given the strategic importance of these two markets for Italian footwear.

The balance of trade surplus is up (+22% between January and November), and is expected to be just under 5.2 billion for the year as a whole.

On the domestic front, however, despite an increase of +15.6% in value terms and +12.1% in volume, Italian household spending is still 11.1% down on 2019 levels, which were already highly unsatisfactory. The analysis by merceological category reveals increases of around +16% in expenditure on 2020 for classic men's shoes and +18% for classic women's shoes; both these items had been severely affected in 2020 due to the sharp reduction in occasions for using them and are still approximately -20% down on pre-pandemic levels; there was a +14% increase for children's shoes; a +16.3% increase for sports shoes and sneakers (where the shortfall on 2019 stands at -4%). Finally, there was a limited increase for slippers (+6%), but this was sufficient to make up the gap with the pre-covid situation (+0.3%), given their widespread use during the time people were confined to their homes in 2020 and the resulting more modest reduction in purchases for the category.

Expenditure by foreign tourists continues to be well below pre-pandemic levels.

In terms of employment, in 2021 there were a total of 3,981 active footwear manufacturers in Italy, representing a negative balance of -171 units compared to December 2020. The sector's workforce fell to 70,586, i.e. there were -1,296 less workers than in 2020 (-1.8%) If component manufacturers are also taken into account, the balance is even more negative: -312 companies and -2,067 employees compared to 2020, across both industrial and craft sectors. The number of active companies is down for all regions. In terms of the workforce, Campania and Puglia are the only two regions bucking the trend (+95 and +148 units). The Marche and Tuscany reported the largest reductions in absolute terms for both active companies (-114 and -65 units respectively) and workforce (-1,269 and -624).

Finally, after the 2020 peak, following the suspension of working activities during the lockdown (83 million hours), in 2021 authorisations granted by INPS for the leather supply chain fell to 68.2 million (-17.8%), but remain 8 times higher than in 2019 (+722%), which demonstrates exactly how complex the situation remains. Indeed, the price increase for raw materials (that continued throughout all of 2021) and energy are eating away companies' margins and putting at risk the sector's recovery.

Assocalzaturifici - Trade Association for Italian Shoemakers (Z1558) 04.01.22-10
First 9 months of 2021

The following report is an exclusive and original piece of work prepared by Confindustria Moda for Assocalzaturifici. It is designed for distribution by mail (email and ordinary mail) and cannot be redistributed, reproduced, published or altered in any of its parts by parties who have not been expressly authorised to do so. All copyrights are reserved. This document is for informational purposes only and does not represent an offer or solicitation to carry out any transaction.

Footwear industry: double-digit recovery in 2021 (turnover +16.2% over 12 months, according to the earliest projections) despite a -10 to -15% gap compared to 2019. Recovery is uneven: the big names are making great progress, while 2 out of 3 companies close the year with revenues below pre-Covid levels. Uncertainty is caused by a fresh outbreak of the pandemic. Higher raw materials and energy costs are slowing recovery.

The footwear sector got going again in 2021 after the shock of 2020: the figures for the first 9 months – despite a weak third quarter, when domestic and foreign demand was not much higher than in the previous year, after the strong recovery of the previous quarter (compared to reduced business during the lockdown) – reveal double-digit recovery in the principal economic variables, though the gap compared to the situation prior to the pandemic has not yet been closed.

The best results were achieved by exports, which – led by the big international luxury brands – registered +17.6% by value over 2020 and almost reached pre-pandemic levels (-2.7%, despite a drop of -7% in volume); France (+25%) and Switzerland (+19%), markets traditionally associated with work on contract, performed well, as did the USA (+38%) and China (+50%, abundantly exceeding 2019 levels, by +26%).

The positive balance of trade is stronger this year (+24.6%). Domestic demand, on the other hand, is slow to recover: +10.5% in household spending, still 15% less than two years ago; shopping by international tourists remains low.

Recovery appears not to be for all, and is proceeding more slowly for many companies: 3 out of 10 companies have experienced further shrinkage of sales; only 46% of them saw growth above +10% (a fairly modest rate in view of the low levels of 2020).

According to the panel of member companies surveyed by Confindustria Moda Research Centre, the initial projections for the end of the year as a whole suggest a rise in sales of +16.2% over 2020, while maintaining a gap of -10 to -15% below pre-pandemic 2019 levels (-13.1% is the average estimated percentage). 2 out of 3 companies are still seeing lower sales than in 2019 (“significantly lower” according to 42% of the sample).

Fears of a new wave of the pandemic hindering the return to normality are added to increased raw materials and energy costs.

The results of long months of unusual crisis are beginning to show: -82 footwear companies and -940 employees in the first three quarters of 2021, including both industrial and craft operators, while use of wage support instruments in the leather industry, though -8.7% lower than in 2020, are still exceptionally high (60.8 million hours authorised, more than 9 times the figure for 2019).

The July-September quarter saw recovery continue, though much more slowly than the previous quarter, due to physiological flattening of the curve, also confirmed by Istat figures on trends in industrial production in the summer months.

The sample surveyed by Confindustria Moda Research Centre revealed that 2 footwear companies out of 3 registered growth of revenues (56% of respondents) or at least no change (10%) compared to the third quarter of 2020.

Average growth of turnover was around +15.3%. The order portfolio also grew (+14%).

The panel of companies surveyed estimated that sales were about +19.5% higher in the first 9 months of the year than in the first 3 quarters of 2020.

While the majority of companies reported at least some signs of recovery, registering an increase over the heavily penalised figures for the first 9 moths of 2020, recovery was not equally vigorous for all, and above all, in many cases it was not sufficient to make up for the losses suffered in the previous year. Only 1/3 of companies declared that it had passed, or at least reached, the sales reported in January to September 2019, before Covid.

A further slowdown of recovery is expected for the fourth quarter, somewhat attenuating the intensity of growth experienced in previous months.

Asked to offer an initial assessment of the end of the year, 3 out of 5 footwear companies responded that they expected to see sales up over 2020; specifically, 30% of the interviewees expect to close the year 2021 with an increase of more than +20%, and 16% of the sample expected to see a growth rate of “between +10% and +20%”. If respondents are weighted by size, the Research Centre estimates an average annual growth rate for the panel of around +16.2% over 2020, which is not negligible, but neither is it sufficient to reach 2019 levels (-13.1% compared to them).

A fresh outbreak of the pandemic and the spectre of new restrictions – in Italy and in countries which import Italian footwear, with consequent effects on local commerce and distribution – and the rise in raw materials prices, which shows no signs of attenuation, and in energy costs constitute elements of uncertainty and risk compromising the current scenario. According to 96% of the respondents, the increase in raw materials prices will have an impact on their company’s recovery; there is similar concern about increased energy costs (80%).

● On the domestic market, household spending has grown in the first 9 months of the year – according to Sita Ricerca Fashion Consumer panel – by +10.5% in terms of value over the same period in 2020 (+8.8% in terms of quantity). After leaping up in the second quarter (+43%), in the third quarter spending remained the same as in the previous year (-0.5%), slowed by September’s negative trend (-3.7% year-on-year).

The gap compared to the pre-pandemic situation, which already showed the effects of a decade of continuous erosion of spending, remains around -15% by value (-11% by volume).

The breakdown by product category reveals increases of around +6% in expenditure over the first 9 months of 2020 for classic men's shoes and +10% for classic women's shoes (although both items are still down more than -20% compared to pre-pandemic levels); there were also increases of +7.6% for children's footwear; +14.2% for sport shoes and sneakers (which are down -7% compared to 2019); there was a limited increase in sales of slippers (+4.2%), the type of footwear that was used most prevalently during the lockdown, and which is unsurprisingly now closer to its pre-Covid levels (-2.8%).

● Once again, the most positive results came from exports, which still represent the driver of the sector (with more than 85% of national production destined for international markets).

The foreseeable rise in the months of March and April (when sales were double the 2020 levels, severely compromised by the lockdown) and the robust recovery of May and June (+35% year-on-year, in terms of both volume and value), was followed by a rather weak third quarter (also as a result of comparison with months in 2020 that showed an initial rise in sales), displaying only modest increases over the same period in the previous year (+0.6% in terms of value, +2.7% in terms of quantity).

Istat's official cumulative figures register a year-on-year increase in the first 9 months of the year of +17.6% by value (only slightly weaker than the performance achieved by products of Italian manufacture in general in the period under consideration, +19.5% in terms of value), with a figure of +16.3% more pairs (average prices up by +1.1%).

Including pure trading operations, a total of just under 148 million pairs of shoes was exported, and the threshold of 7.5 billion euro was exceeded once again, a result second only to the record level achieved in 2019 (both in absolute terms and taking inflation into account).

Compared to the pre-crisis situation of January-September 2019, although current levels are approximately 7% lower in terms of volume, they are only down -2.7% in terms of value.

This result is made possible primarily by the brilliant performance of the big international luxury brands, which have in a number of cases already reached and gone well beyond their pre-pandemic revenues. It is no coincidence therefore that Switzerland - the leading export destination in terms of value, and a traditional logistics and distribution hub for many top fashion brands - has not only experienced an increase of almost 20% compared to January-September of last year but already exceeded the same period in 2019 by 8.1%.

But the average performance of sales abroad conceals a highly diverse situation, in which many small to mid-sized companies (as demonstrated by the survey responses) still have a long way to go before returning to the number of customers and orders they were seeing before the crisis began.

Practically all of the top 20 destinations for Italian footwear exports reveal a positive trend (almost always with two-digit recovery rates, at least in terms of value) compared to the first 9 months of 2020.

Exceptions include:

- the United Kingdom, which left the EU last year and has fallen behind by -25% in terms of value, -16% in terms of quantity, presenting gaps of more than -40% compared to 2019;

- Japan (-7.5% in terms of value, -14.5% in terms of the number of pairs, with a gap of around -30% compared to pre-Covid 2019 levels). Partly as a result of the very gradual reduction in tariffs, and especially because of the pandemic, the trade agreement that came into effect in 2019 between Japan and the EU has not yet generated any improvements in the sale of Italian footwear in this market;

- South Korea, which, after steady rises in recent years (growing fourfold in value between 2011 and 2019 and growing +12.3% even in 2020, in the midst of the pandemic), saw expansion halted in the first 3 quarters of 2021 (-5.4% in terms of value, -9.2% in terms of quantity).

Both European Union markets and those outside the EU revealed double-digit growth in value over 2020 (+19% and +16.3%, respectively); but only the EU markets have closed the gap with two years ago.

Within the EU27, recovery was good in France (+25% in value over 2020; another destination for manufacturing on contract for big international fashion brands) and, to a lesser extent, in Germany (+11%), which have always been the two strongest foreign markets by far for Italian footwear manufacturers in terms of volume (together, they account for 1/3 of the pairs sold abroad). Poland, Belgium and Greece stand out for exceeding 2019 levels in terms of both value and number of pairs.

On the other hand, the analysis of flows to non-EU countries shows:

- a continuation (and consolidation) of the very positive trends that emerged in the Chinese market towards the end of 2020. In the first 9 months of the year there was a +31% increase for China in volume and a +50% increase in value compared to 2020, particularly for high-end products (as the average price of sale on this market, already high, increased by another 15%). The main winners are therefore luxury brands as opposed to companies with their own brand, which have always struggled to get a foothold in this market.

Aside from 'revenge spending' by Chinese consumers and the importing of products from luxury brands, which local consumers previously purchased during journeys abroad, these performances were driven by the direct entry into China of goods that previously went through Hong Kong. Current exports to China are significantly above 2019 pre-pandemic levels (+26.4% in value and +4.5% in volume);

- a strong recovery for the US (+38% in value, with +67% in volume, permitting an 8% increase in total footwear exports as compared to the first 9 months of 2019), where the government cancelled in October (after temporarily suspending in June) the decision to apply an additional 25% customs duty on imports of certain consumer goods from Italy (including clothing, bags and footwear), in connection with disputes on digital taxes;

- a fairly lively performance in the Arab Emirates (+30% by value), back to 2019 levels.

The breakdown by product type reveals significant increases in sales of footwear made out of non-traditional materials (+31% in terms of value for exports of products with fabric or synthetic uppers, +41% for rubber shoes), which have all grown abundantly beyond pre-Covid levels in terms of both quantity and value. On the other hand, the recovery for leather footwear was more disappointing, with a +10.4% increase in value over 2020, meaning that the figure is still down -14% compared to 2019 sales (-21% in terms of volume). In this category, it is sports footwear, along with boots and booties, that are achieving the strongest growth (around +25% by value). The performance of walking shoes was unfortunately lacklustre (+5.1% in terms of value, with an even more modest +2.1% in terms of volume), a segment still about 20% worse than two years ago. The performance of this category is even more disappointing if we look at women's walking shoes only (+3.6% by value and -0.8% in terms of the number of pairs, compared to January - September 2020). Slipper exports did not perform well: a recovery rate of less than +10% left this category still well below 2019 pre-pandemic levels.

● Like exports, imports got going again, though at reduced speed (in view of the unspectacular performance of consumption): in the first 9 months they recovered +4.3% in terms of quantity (down 3.1% in the case of leather shoes, however, the only segment to perform worse than in 2020) and +11.7% in terms of value. The gap compared to 2019 volumes remains around -14%.

Imports from China, already the top supplier by far, grew quickly in the third quarter, closing the first 9 months of the year with +2.4% more pairs than in 2020, reversing the negative trend of the first half of the year.

● The trade balance for the sector for the first 9 months of the year was positive by 3.64 billion Euro (+24.6%). For the first time since the start of the year, it was even higher than two years ago: +2.1% higher than the figure for January-September 2019.

● Figures on company demographics and employment clearly reflect the effects of the long period of exceptional crisis induced by the pandemic emergency. The effects of the pandemic have sorely tried companies’ resistance, starting with the small to mid-sized enterprises that have always formed the fabric of the Italian footwear industry.

Compared to the results of 2020, the figures published by Infocamere, representing the official statistics of Italian chambers of commerce, registered a negative balance of -82 enterprises, including both industrial and craft operators, and -940 employees. The number of active footwear companies has therefore fallen to 4,070 (-2% compared to December of last year), with 70,942 direct employees (-1.3%).

Taking into account not only finished shoes but makers of footwear components, the chamber of commerce figures for the first 9 months of the year reveal a negative balance of -186 companies and -1,544 employees.

This unfavourable employment trend is also reflected in the survey of a sample of member companies: while half of the interviewees expect to see stability in the number of employees at the end of 2021 compared to the beginning of the year (53%), 29% report a reduction in the number of employees, 10% more than the number reporting growth (18%).

● After the record-breaking 2020 figures, the number of hours of wage support for companies in the leather industry authorised by INPS, Italy’s national social security institution, in the first 10 months of 2021 was down -8.7% to 60.8 million (still more than nine times the pre-Covid figure of 6.5 million hours reported in January-October 2019, +840%). The decrease was lower than the total for all national sectors of industry (for which a -34.7% decrease was reported in the first 10 months of the year compared to the previous year).

In the leather industry (footwear manufacturers and makers of components+leather goods+tanneries), a strong increase in the first quarter (+1130%) was followed by a drop in the second (-50%) and third (-11%) quarters of the year, confirmed in the month of October (a -51% reduction). In addition to the ordinary component (-8.1% over the first 10 months of 2020), the extraordinary component was also down (by -27.7%); breakdown by beneficiary reveals similar trends for factory workers (-7.8%) and office staff (-11.8%).

Milan, 23 December 2021

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