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Italian Firms Look for New Opportunties

NEW YORK — With most of Europe still in the grip of the global economic crisis, Italian footwear companies continue to see their export businesses decline throughout the region.

Exports to especially hard-hit Spain and Greece, for instance, slid 9.8 percent and 31.3 percent, respectively, in the first quarter of 2012, according to ANCI, the Italian footwear manufacturers’ association. “People just don’t want to spend money on shoes right now. It’s a difficult situation,” said Cleto Sagripanti, chairman of ANCI and CEO of Manas SpA.

There are bright spots, however. Demand for Italian-made footwear is soaring in fast-growing markets such as Asia, the Middle East and Russia, helping companies offset the slump in Europe. “In general, what [business] we’ve lost in Europe we have made up in other regions,” said Fabio Aroma­tici, ANCI’s general director. “Italian companies understand that in order to grow, they need to tap into markets they haven’t yet reached.”

Footwear News
recently spoke with Sagripanti and Aromatici about navigating the stressful economic situation and seeking new export opportunities.

How is the situation in Europe affecting the Italian footwear industry?
Fabio Aromatici:
Europe continues to have a very difficult time. We see it in the numbers. Even in Germany, where the crisis has not been as bad, exports decreased 6.8 percent in April and May [the most recent data available]. The situation globally is still very uncertain, and companies are concerned. One thing that has been a benefit for Italian manufacturers, though, is that in an economy like this, consumers are looking for product that is genuine — for smaller brands that have a great story or tradition behind them.

Cleto Sagripanti:
It’s a very black-and-white situation. There are some countries where the export of Italian shoes is increasing nicely, such as China, Russia, the Middle East and the U.S. The problem for us is the European market. It has been hit hard by the crisis, so export to those areas has decreased.

How is the industry dealing with the downturn?
CS:
Brands are investing more in the product. [Consumers] are looking for quality shoes. The focus has [shifted from] marketing and brand communication to design and product development. Companies also continue to exhibit at [trade] shows. It’s important at a time like this that they don’t reduce their investment in shows.

FA: Although the crisis is certainly taking a toll on the industry, it’s also bringing out the best in companies. Collections are becoming much more creative, and quality is being [stepped up]. Companies, even those that are more traditional, are investing more in research and development, new materials and new machin­eries. They are listening to their customers and are more open to suggestions and feedback.

What are the hot emerging markets?
CS:
China is definitely the big one. We anticipate a lot of growth there in the next five years. Chinese consumers appreciate Italian-made shoes. Other growing export markets include Russia and Indonesia.

FA: Asia is absolutely booming. We’re seeing great numbers in South Korea. Exports to the country rose 35 percent in the first five months of 2012. We’re also seeing strong growth in the Middle East, including Saudi Arabia and the United Arab Emirates.

How important is the U.S. as an export market?
FA:
It’s the No. 3 market for Italian exports [after France and Germany], so it’s extremely important. However, it’s difficult for companies, especially smaller ones, to access the market.

CS: It’s great that some of the big U.S. department stores are expanding their shoe [floors], but I’d like to see them invest more in brands in the future. I was in New York [recently] and visited some department stores and felt there were too many private-label brands. And it’s frustrating to see collections with Italian-sounding names that are made in China.

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