Italian bank Mediobanca has prepared a study that analyses the performance of major Italian fashion companies, aggregating the financial data of 152 enterprises with headquarters in Italy and individual revenues over €100 million.
The research showed some positive and recovering result compared to previous years, along with an improvement in the containment of emissions and related measures taken to reduce environmental impact.
Drawing 2022 forecasts and expectations for 2023
Despite the uncertain macroeconomic environment and the fourth quarter affected by the resurgence of Covid-19 in China, the year 2022 saw very positive values: the preliminary figures show a 20% growth in turnover at the aggregate level (to €82 billion, +21% over 2019). Driving revenues are foreign sales, accelerating by 24% over 2021. Also progressing are investments, which are expected to stand at +35%.
A further 8% increase in turnover is forecasted for 2023, which would bring the aggregate of Italy's major fashion companies to close to €90 billion, within a macroeconomic slowdown scenario of rising interest rates and slowing inflation. On the sales front, there are signs of recovery in consumption, and the reopening of China as an opportunity and an important driver of growth.
An overview of the largest Italian fashion companies
The 152 largest fashion companies based in Italy recorded an added value equal to 1.3% of national GDP in 2021 and are distributed throughout the peninsula, with prevalence in the North (111 units), followed by the Center (32).
Among manufacturing enterprises, apparel stands out, determining 28.6% of aggregate 2021 revenues, followed by leather, hides and footwear (23.1%). The productions referable to the high-end segment count for 73.2% of the total apparel, leather and textile sectors.
The presence of foreign groups in Italian fashion is confirmed as important: 58 of the 152 companies have foreign ownership controlling 43.6% of aggregate sales (24.2% are French), confirming the overseas appreciation of Made in Italy. The foreign investor prefers the high-end market segment: 87.4% of the aggregate turnover of foreign-controlled companies is related to the luxury segment (58.8% is French).
International projection is one of the most representative characteristics of fashion manufacturing companies: 73.7% of aggregate turnover comes from abroad, led by jewelry (80.3%), eyewear (78%) and leather, leather and footwear (76.9%).
High-end manufacturers specialized in apparel, leather and textile compartments are at higher export levels than those at the cheaper end of the spectrum (73.2% vs. 58.2%), demonstrating greater ability to preside over foreign markets.
The production base of the companies surveyed is mainly Italian: 68% of the manufacturing companies are located in Italy, while the remaining 32% operate in foreign countries: 17% in Europe, 8% in Asia, 5% in Africa and 2% in the Americas.
For high-end companies, the concentration of domestic production is greater, as 83% of their manufacturing base is in Italy and only 17% happens in foreign countries (two-thirds of which are in Europe).
Looking at the best performers
Considering the sample of companies’ turnover, the top twenty ones alone account for more than half of aggregate turnover.
Occupying the first place by revenues continues to be Prada with a €3.4 billion turnover, which precedes Luxottica Group that totaled €3.2 billion, consolidated by multinational Essilor Luxottica, and Calzedonia Holding that registered €2.5 billion sales. Moncler and Giorgio Armani follow with a turnover of €2 billion each.
The green commitment of Italian fashion
An analysis of the 2021sustainability budgets showed a growing attention to ESG (Environment, Social and Governance) issues, a trend that was accelerated by the pandemic.
Analyzing these budgets, Italian fashion companies make an incisive commitment to a more sustainable future and to environmental protection: on average, they decrease CO2 emissions (from 1,766 tons of CO2 per one million sales in 2020 to 1.462 in 2021 with a 20.8% decrease) and waste produced (from 2.9 tons per one million sales in 2020 to 2.4 in 2021 lowering by -17.2%), while the use of renewable sources increased from 38.% in 2020 to 43.4% in 2021, and the share of recycling waste also grew from 65.5% in 2020 to 73.5% in 2021.
How the supply chain is evolving
Compared to 2018, the supply chain map now appears to have shifted slightly in favor of Italian suppliers, who have increased their specific weight by two percentage points (from 54% to 56%) over the 2018-2021 period, mainly at the expense of suppliers from Eastern Europe and Asia. Thus, collaboration with subcontractors now seems to favor Italian ones, consistent with the trend of bringing back to Italy productions that had been delocalized in the past.
Two prevailing strategies are also currently emerging: on the one hand, they registered a push for the construction of new factories in Italy or the expansion of existing ones, and on the other, a different allocation of its suppliers, strengthening collaborations with key and closest subcontractors, including through joint ventures or acquisitions.