Italian Luxury Craftsmen Face A Severe Shortage Of Orders

Italian luxury craftsmen are very worried about the future as major brands cut back on orders and often ask for discounts and deferred payments.

As a result, the number of new luxury goods manufacturers in Italy has fallen by more than 40%. In an interview, several Italian luxury craftsmen said that orders in May and June decreased by 20% to 50% year-on-year. Many craftsmen said that they had not received any orders after the summer.

Filippo baldazzi, chief executive of Serica 1870, a silk manufacturer, said: "we were able to guarantee enough orders up to July, but I'm worried about the second half of the year." Its clients include Brunello cucinelli, kering and LVMH groups.

"Usually at this time of year, we're going to show next year's autumn and winter fabrics, but no one in my clients is thinking about it yet. In addition, we can't show the fabric through video call. Customers have to touch it in person to feel the quality of the fabric. " Another customer, balzzi, was unable to pay because of the delay in payment

In addition to the reduction in the number of orders, luxury brands also hope to reduce manufacturing costs in other ways. Hugo boss and Max Mara are both trying to negotiate with their co-workers to get a 7% to 8% discount on production orders to make up for the damage caused by the epidemic, Reuters reported. A supplier of Hugo Boss group said anonymously that the group would also ask for an extension of payment terms from 10 days to 120 days after delivery. Hugo boss and Max Mara did not respond to the incident.

"If things don't return to normal in the next two months, it could get worse from September, and many luxury goods suppliers, especially smaller luxury goods suppliers, will face bankruptcy, which is very worrying," said David rulli, President of fashion department of Federation of Florence industrialists

According to the global luxury market monitoring report 2020 jointly released by Bain & Company and altagamma, global luxury sales are expected to decline by 50% to 60% in the second quarter, and it is likely that the luxury market revenue will return to the level of 2019 until 2023 at the latest.