the italian textile and clothing industry
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MADEMADE ININ ITALYITALY Textile / Clothing / Fashion ChainTextile / Clothing / Fashion ChainArea Centro StudiArea Centro Studi
September 2005September 2005
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THE ITALIAN TEXTILE AND CLOTHING INDUSTRY
The Italian textile and clothing industry is unique, lively, innovative, and leader in the world. Its innovation ability represents its main and most lasting competitive advantage.
The “mission” of the Italian fashion system lies in offering original, and very distinctive products, which meanwhile answer to consumer’s taste and meet his needs. This also implies a continuous improvement in technical performances of fibres, yarns, fabrics, and finishing.
The success of the whole chain - from the first processes on fibres to fabrics, finishing operations, and final products for the market - is favoured by the interaction of a sophisticated manufacturing network, where the strength of each element is at the same time a condition and a function of the vitality of the whole system.
This dynamic combination of productive, creative, and managing activities involves about 67,500 industrial companies with large, medium, and even very small scale operations. This unique mix still turns out to be the main point of strength of Italian T/C industry, whose about 540,000 employees contribute to roughly 10% of the manufacturing sector’s added value.
The strong export trend of the T/C industry is shown by the turnover share totalized abroad, amounting to 62% of total sales. The significant flow of exports ensures a foreign trade surplus of about 12 billion Euros, which compensate, to a large extent, the country’s deficit in energy and agriculture.
Besides the value which can be measured in figures, Italian fashion, strongly founded on T/C, has enormously contributed to the definition of the ideas of Italian “good taste” and “life quality”, with positive effects on Italian products all over the world.
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MADE IN ITALY FASHION FIGURES IN 2004
Turnover Export Trade balance Enterprises Employees
Textile/Clothing 42 551 26 600 11 691 67 457 543 124Shoes 7 310 6 196 3 619 7 084 100 934Leather products 2 600 2 168 1 165 6 400 33 300Goldsmithery/Jewellery 4 330 3 916 3 011 11 000 47 000Perfumery 7 414 1 983 719 550 35 000Glasses 1 877 1 529 1 077 1 180 16 980
Fashion "Made in Italy" 66 082 42 392 21 282 93 671 776 338
% incidence on manufacturing sector's total amount
16,6 14,6 14,8
Source: SMI on ISTAT, Movimprese, Prometeia and Sector Associations' data
(Mill. of Euros) (no.)
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THE ITALIAN TEXTILE/CLOTHING (T/C) SECTOR IN 2004 (in current millions of Euros)
2000 2001 2002 2003 2004
Trunover 47 101 47 789 45 889 43 150 42 551yoy % change 1,5 -4,0 -6,0 -1,4Export 27 047 28 952 27 989 26 335 26 600yoy % change 7,0 -3,3 -5,9 1,0Import 13 173 14 150 14 315 14 244 14 909yoy % change 7,4 1,2 -0,5 4,7
Trade balance 13 874 14 802 13 674 12 091 11 691
Domestic availability 33 227 32 987 32 215 31 059 30 860yoy % change -0,7 -2,3 -3,6 -0,6
Enterprises (number) (*) - 73 344 71 840 70 001 67 457yoy % change -2,1 -2,6 -3,6Employees (number) (*) - 609 629 596 071 567 032 543 124yoy % change -2,2 -4,9 -4,2
Structural indicators (%)Export on turnover 57,4 60,6 61,0 61,0 62,5Import on domestic availability 39,6 42,9 44,4 45,9 48,3
Source: SMI on ISTAT, SitaRicerca and Associazione Tessile Italiana data(*) Revised series on INAIL and Movimprese database
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THE WEIGHT OF T/C ON THE ITALIAN MANUFACTURING SCENARY IN 2004
% weight on manufacturing sector (2004)
Turnover 9,3Added value 9,7Export 9,6Trade balance 30,9
Source: SMI on ISTAT data
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ITALY’S WEIGHT ON THE WHOLE EUROPEAN TEXTILE/CLOTHING SCENARY IN 2004
EU 15 EU 25
Turnover 25,0 23,5Investments 39,9 36,2Employees 31,1 24,5Enterprises 73,3 66,5
Source: SMI on Euratex data(*) - Provisional data
% weight of Italy on EU Textile/Clothing (2004) (*)
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AN INDUSTRY WHERE LARGE AND SMALL COMPANIES COEXIST SUCCESSFULLY
The international success of Italian T/C has been favoured by the co-existence,
on an equal status and importance basis, of large companies and SMEs.
The innovation ability as well as the attention to the quality of materials and
processes characterize large concerns, whose brand names can be found in the
shops all over the planet. Medium-sized enterprises are often world leaders in
particular market niches, while small companies are specialized and excel in
one or more specific production stages.
The whole chain is made of about 67,500 enterprises, of which roughly 90% with
less than 15 employees.
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ENTERPRISES, EMPLOYEES AND TURNOVER IN THE ITALIAN TEXTILE/CLOTHING SECTOR (2004) (*)
<2 2-10 10-50 >50 Totale
Enterprises (no.) 64 199 2 178 905 175 67 457(%) 95,2 3,2 1,3 0,3 100,0
Employees (no) 336 110 61 294 82 187 63 534 543 124(%) 61,9 11,3 15,1 11,7 100,0
Turnover (in million of Euros) 19 200 5 075 9 046 9 231 42 551(%) 45,1 11,9 21,3 21,7 100,0
Turnover per Employee 57,1 82,8 110,1 145,3 78,3 (in thousands of Euros)Source: SMI on ISTAT data(*) Revised data on ISTAT 2001 Census
Turnover ranges (in million of Euros)
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The T/C Sector’s The T/C Sector’s
Foreign TradeForeign Trade
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THE ITALIAN T/C SECTOR’S FOREIGN TRADE The Italian T/C industry is strongly export-oriented: actually, more than 62% of the total turnover is achieved thanks to foreign markets. The figure of 26.6 billion Euros in foreign sales totalized last year represents 10% of the whole Italian manufacturing industry’s export value.
In 2004 net export reached 11.7 billion Euros, i.e. 31% of the whole manufacturing industry’s trade surplus. Other fashion related products (such as shoes, goldsmithery, leather products, cosmetics and glasses) accounted for a further 10 billion Euros surplus. That’s to say that the “Oil of Italy” can roughly completely compensate for the country’s deficit in energy, food and agriculture.
In 2004, the flows of Italian TC products towards European Union markets (15 countries) raised by 1.4%, while those towards the 10 new members decreased by 13%. Outside EU25 (which absorbed 54% of total Italian TC foreign sales), exports to USA (third largest market for Italian fashion system) recorded a drop of 2.6%, Japan lost 8.5%, while Russia (tenth biggest customer) was the most dynamic market (+11,2%). A significant increase was also recorded by exports to Hong Kong (+5,1%).
On import side, China has furthermore consolidated its leadership position among top Italy’s suppliers (+13.7%).
In 2003 Italy was the third world’s exporter of textile products (about 8% of the total amount), after China and USA, recording a CAGR loss (1995-2003) of roughly 1%. In 2003 among the main clothing exporters our country was placed just behind China, however showing a CAGR drop near to 2%.
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FOREIGN TRADE FLOWS OF THE ITALIAN TEXTILE/CLOTHING INDUSTRY (2004)
The composition of Italian T/C’s trade surplus in 2004
Fabrics36,8%
Knitwear13,2%
Yarns3,2%
Clothing items31,7%
Other textiles and special fabrics
9,4%
Hosiery5,6%
Tr. Bal.Millions Var.% Millions Var.% Millions
of Euros of Euros of Euros
T/C TOTAL AMOUNT 14 909 4,7 26 600 1,0 11 691
TEXTILE SECTOR 5 935 0,3 11 583 2,4 5 648
of which:
- Tops 307 -13,7 146 -17,9 -161 - Yarns 2 056 -5,2 2 442 5,0 386 - Fabrics 1 887 2,3 6 286 2,1 4 399 - Home textiles 577 12,5 479 4,2 -98 - Other textiles & special fabrics 1 106 7,2 2 229 1,9 1 123
CLOTHING SECTOR 8 974 7,8 15 016 -0,1 6 042
of which:
- Clothing items 4 826 2,0 8 617 -0,5 3 791 - Knitwear 3 989 15,4 5 572 0,5 1 583 - Hosiery 158 13,9 827 0,7 669
Source: SMI on ISTAT data
Import Export
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TRADE PARTNERS OF THE ITALIAN T/C INDUSTRY IN 2004 (in millions of Euros)
0
500
1000
1500
2000
2500
3000
35002003 2004
The top 10 customer countries The top 10 supplier countries
0
500
1000
1500
2000
2500
2003 2004
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THE MAIN WORLD’S EXPORTERS OF TEXTILE PRODUCTS (1995-2003)
China
Usa
Italy
Germany
South Corea
Taiwan
J apan
France
Belgium
India
-6,0
-4,0
-2,0
0,0
2,0
4,0
6,0
8,0
0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0 16,0
% share on world export (2003)
% c
han
ge
of s
har
e (1
995-
2003
)
The bubble's dimension indicates the importance of the
country on total flows
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THE MAIN WORLD’S EXPORTERS OF CLOTHING PRODUCTS (1995-2003)
China
Italy
Turkey
Germany
Hong Kong
Mexico
France
India
Belgium
Usa
-6,0
-4,0
-2,0
0,0
2,0
4,0
6,0
8,0
10,0
0,0 5,0 10,0 15,0 20,0 25,0 30,0
% share on world export (2003)
% c
han
ge
of s
har
e (1
995-
2003
)
The bubble's dimension indicates the importance of the
country on total flows
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The The geographygeography of the of the Italian T/C sectorItalian T/C sector
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THE GEOGRAPHY OF THE ITALIAN T/C SECTOR
This heritage of specialization and this network of relationship find a special form of organization in the so-called “industrial districts”, the Italian contribution to industrial organization models. Actually, the Italian fashion industry is located into an archipelago of specialized districts: Como for silk fabrics, Biella, Prato, and Vicenza for wool yarns and fabrics, Castelgoffredo for women’s stockings, Carpi and Treviso for knitwear, Empoli for leatherwear, Pesaro for denim apparel, Grumello for buttons, Brescia for socks producing machinery, and so on.
The close interactions between different companies, which in most cases are located in specialized districts, are case studies at the main universities and business schools all over the world as a model of successful industrial organization.
Industrial districts are particular manufacturing structures, merging advanced technical and organisational solutions with the craftsman tradition which represents an important springboard for creativeness, allowing the quick production of prototypes, small production lots, and a large number of product variants.
In some of these specialized districts, the T/C industry is a fundamental element of social relations, local culture and, of course, business practice.
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VareseComo
Bergamo - BresciaMantua
Biella - Novara
Vicenza - TrevisoPadua - Rovigo
Modena - Reggio E.
Teramo - Pescara
Prato - Pistoia - Florence
Arezzo - Perugia
Bari
Lecce
Naples
Milan
WHERE MADE IN ITALY FASHION IS BORN
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ITALY’S MAIN T/C DISTRICTS (2004)
District/Province Pr. SectorTurnover
(Mill. Euros)Export % on
turnoverNo.
EnterprisesNo.
Employees
PRATO PO/FI/PT Textile-Clothing 4 948 54 8 478 50 270
VICENZA (a) VI Textile-Clothing 5 863 29 2 081 36 400
ASSE DEL SEMPIONE VA Textile (Cotton) 2 700 40 3 900 36 360
BERGAMO (b) BG T/C, buttons 3 607 38 1 642 27 981
COMO CO Silk 3 000 50 2 110 24 387
SCHIO-THIENE-VALDAGNO VI Textile 2 872 50 759 23 598
TREVISO (b) TV Textile-Clothing 2 879 62 1 664 22 338
BIELLA BI Textile 4 000 35 1 100 20 000
BRESCIA BS Textile-Clothing 2 882 44 1 780 17 875
CARPI MO Textile-Clothing 1 100 36 2 000 11 000
SAN GIUSEPPE VESUVIANO NA Textile-Clothing 5 000 n.d. 3 000 10 000
MONTEBELLUNA TV Shoes & Clothing 1 542 70 428 8 608
CASTEL GOFFREDO MN Hosiery 1 150 50 280 6 600
EMPOLI FI Clothing 570 30 521 6 210
LECCO LC Textile 750 60 162 3 227
GRUMELLO DEL MONTE BG/BS Buttons 250 40 150 2 000
VALLE DEL LIRI FR Clothing 130 20 194 2 000
TOTALE 38 579 28 912 274 648
Source: SMI on Club dei Distretti, Istat, Industrial Associations of Biella, Brescia, Como, Prato and Vicenza data
(a) - Data updating: 2002 (b) - SMI Estimate on ISTAT 2001 Census
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Retail system Retail system
and chain modeland chain model
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CONSUMER - INDUSTRY COMMUNICATION: RETAIL
The industry’s attention to the consumer’s behaviour was favoured in Italy by the existence of an articulated retail system, with a significant presence of independent retailers.
The need to modernize retail outlets is leading to a rapid evolution of the retail system towards more highly structured models with larger sales areas.
The retail system of the early 21st century requires a stronger producer - retailer - consumer interaction, a new technology in communication as well as a new organisation of the T/C production cycle from the first yarn processing to the point of sale.
In this direction is moving the huge flow of investments and reorganization projects underway in Italian companies all over the production pipeline.
Retail channels in Italy, clothing items (2004) (% weight)
Source: SitaRicerca
Others (14.5%)
Department Stores,
super/hyper markets (17.3%)
Independent Chains (17.7%)
Independent Stores (50.6%)
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THE CHAIN MODEL
DESIGN INDUSTRY RETAIL
VALUE CROSSES ONE SINGLE CHAIN :
TECHNOLOGY
INNOVATION
QUALITY/PRICE
HOW TO TURN
TECHNOLOGY
INTO ART
IN ORDER
TO TRANSMIT
TO CONSUMERS
AN UNIQUE IMAGE
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MADE IN ITALYFASHION SYSTEM
AUTHENTICITY
(Made in Italy)
ORIGINALITY
(From Renaissance to XXI century)
TECHNOLOGICAL LEADERSHIP
(The textile districts)
EXCLUSIVENESS
(Italian life style)QUALITY/PRICE
RATIO
(Value for money)
ORGANIZATION EFFICIENCY
(The chain model)
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For further information:SISTEMA MODA ITALIAEconomic Studies Dept.
Viale Sarca, 22320126 Milan Italy
Ph. no. +39 02 641191 Fax no. +39 02 [email protected]