Footwear-APR-MAY21-P05-12 News_Footwear_Jan10_p30 21/05/2021 09:52 Page 10


NEWS


The footwear industry: Sharp fall in turnover (-25.2%), production (-24.6% in value terms) and exports (-14.7% in value terms) in 2020.


The snapshot for the sector from the Confindustria Moda Research Centre for Assocalzaturifici After the collapse in levels of business during the first part of the year, as a


S


iro 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).


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.


Christchurch footwear supplier, Drooth Ltd., secures finance packager of over £1.3m from HSBC UK to acquire and fit-out larger premises in Poole


and fit-out larger premises in Poole. Drooth Ltd has used the HSBC UK funding to


A


move its operations from its 9,000 sq ft premises in Christchurch to a 50,000 sq ft space in Poole, enabling the business to increase its distribution capacity, quadruple the size of its space and create new jobs further down the line.


David Ross, Managing Director at Drooth, said:


“We’re fortunate that the pandemic has not affected our expansion plans as online demand


10 • FOOTWEAR TODAY • APRIL/MAY 2021


footwear supplier in Christchurch, Dorset, has secured a finance package of over £1.3m from HSBC UK to acquire


for the brands we supply has continued to increase. When I started the company in 2009, we were in a 4,000 sq ft building, so it’s great to have been able to expand over the years and move to a space that’s four times bigger.


“The finance package from HSBC UK has been


extremely helpful in fulfilling our business expansion plans. We wouldn’t be in the position we are today without the help of our relationship manager at the bank, James Allingham, who ensured the process ran seamlessly.”


Jane Fancy, Area Director, Hampshire & Dorset at HSBC UK, added: “Drooth is a great example of


a company that is committed to expanding its services across the country and Europe. It’s been very rewarding to see the business flourish over the years and we look forward to seeing the team continuing to grow from the new site.”


Drooth, which currently employs 10 people,


supplies well-known footwear brands T.U.K. Shoes and Hey Dude to both the UK and Europe. Hey Dude offers laid-back, super-light canvas shoes for both men and women, while T.U.K Shoes, a company born in San Diego, creates bold, original footwear for men and women inspired by artists, bands and music fanatics.


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