Positive new trends in Italy’s shoe production, exports, orders, pricing and domestic consumption are being highlighted in the initial estimates made for the development of the sector by ANCI, the Italian shoe industry association, inspiring a sense of cautious optimism as it gears up for a change in chairmanship next June 1.
In particular, while the country’s imports of footwear continued to increase, imports of the items affected by the new European anti-dumping duties that ANCI fought for declined. Through the month November 2007, the last one for which statistics are available, volumes fell by 13.5 percent from China and by 17.3 percent from Vietnam for these kinds of products since April, when the first provisional duties were established. In October and November, when children’s shoes were added and the duties were made final, the year-on-year drop reached 22.5 percent for China and 4.1 percent for Vietnam.
A similar trend is being observed for imports from China into the European Union as a whole. According to preliminary data for the first 10 months of 2006, those of the products subjected to the new duties fell by 11.4 percent during the period.
On the other hand, a 64 percent jump in Italy’s imports of leather shoes from China during the first quarter of 2006, prior to the application of the duties, led to an overall increase of 14.3 percent in the total volume of imports from that country into Italy for the first 11 months of the year. Alternative sources such as India and Latin America, led by Brazil, showed marked increases of 34.4 and 58 percent on the Italian market, respectively. There were also significant increases of 16 percent from France and 23 percent from Germany, probably due to trans-shipments from Asia.
Overall, imports grew by 10.8 percent to a record of 340.8 million pairs for the 11 months, but the average price went up by 1.3 percent, leading to an overall increase in value of 12.2 percent to €2,972 million. Italy’s trade balance in footwear remained largely positive, however. Exports grew at a healthy rate of 6.4 percent to €6,050 million, as a 1.4 percent drop in volume to 228.1 million pairs was compensated by a 7.92 percent increase in their average value to €26.53 per pair.
For leather shoes, which remain the core of Italy’s footwear business, exports fell by only 0.2 percent in volume to 153.6 million pairs, but their average price went up by 7.15 percent to €32.91, resulting in a 6.93 percent increase in the total value of these exports to €5.05 billion. Boots and sandals performed particularly well. Average prices declined for slippers and rubber shoes, but they increased also in the area of synthetic shoes. In terms of volume, Italy exported 5.5 percent fewer synthetic shoes and 7.5 percent fewer slippers, but it raised shipments of rubber shoes by 29.1 percent.
In terms of the countries of destination, export deliveries grew by 10 percent in Russia and by 35 percent in the Ukraine. They also increased by 22 percent in Spain, by 3.5 percent in the Benelux and by 12 percent in Greece, but they declined by 11 percent in Germany, by 4.5 percent in France and by 7.7 percent in the UK. The North American market was down by 8.8 percent and even the Far East showed a decline of 2.8 percent, in spite of a certain stability in Japan.
A survey conducted by ANCI showed an overall decline of only 1.5 percent in Italy’s shoe production in 2006, down from the 11 percent drop recorded in 2005. The rate of decline became more muted toward the end of the year. In fact only 40 percent of the companies that were interviewed mentioned a decline in their output during 2006. About 85 percent of the existing capacity is being utilized, but the number of (direct) employees in the footwear sector declined by 3 percent to 94,143 last year. What is more, ANCI estimates that Italian producers were able to raise their revenues by 3.6 percent in the course of the year thanks to higher average prices, and this trend is holding for the first half of 2007.
The average order book for the 1st quarter of 2007 showed a 1.5 percent increase in volumes, with the strongest gain on the domestic market at 3.3 percent. Orders from the rest of the European Union were up by 1.4 percent and those from North America were down by only 1 percent. The survey indicated that 50 percent of the respondents were expecting stable orders and only 15 percent anticipated a decline in orders and 18 percent forecast a drop in their production.
Italian households spent an estimated 0.5 percent more on shoes in 2006, both in volume and in value. Volumes increased by 1.1 percent in the area of sports shoes and by less than 1 percent in women’s shoes.
Rossano Soldini, the incumbent chairman of ANCI, called on the Italian government to sustain its battle for mandatory labels of origin on shoes imported into the EU, but admitted that nothing will probably happen on this score until Portugal takes over from Germany the chairmanship of the European Council in the second half of this year.
Meanwhile the Italian government, the regions and ANCI continue to pour large sums of money into the promotion of Italian footwear. For the Italian Foreign Trade Institute, which is allocating unchanged matching grants of €1.5 million for this year, the focus will be on South Korea and South Africa. ANCI is raising its own promotion efforts in the USA and Russia. Other more general campaigns in favor of products made in Italy are planned in China, Greece, Poland, Portugal and other countries.
Using in large part the windfall profits from the successful MICAM fair, ANCI is spending a total of about €5 million this year on various forms of promotion, including its ongoing “I Love Italian Shoes” campaign, particularly at international airports. It is also supporting the establishment of dedicated stores carrying the shoes of many Italian firms in various parts of the world.
After a failed experiment in Moscow, the first store of the kind opened in another Russian city, Omsk, in March. Soldini predicted that about six more such stores are likely to open by next September based on inquiries from Dubai, South Africa, Istanbul, the USA and Canada.
ANCI’s strong support of the “made in Italy” concept is likely to continue under its new chairmanship. Both of the candidates who are currently campaigning to succeed Soldini are proposing to continue to sustain Italian-made shoes because they make them in their factories. Vito Artioli, who is 70 years old, continues to get the classical men’s shoes sold by his family-owned company made entirely in Italy, assembling them at a plant north of Milan. The same goes for Franco Ballin, 60, whose 32-year-old company manufactured 100,000 pairs of men’s and women’s shoes at a factory near Venice. On the other hand Ballin has a 25 percent share in Everybody, another Italian company that sells cheaper models designed in Italy but made elsewhere.
At a press conference during the MICAM show last month, Soldini indirectly endorsed Artioli, who has been active in many associations since 1950. He has spearheaded the organization of agents’ shoe shows in Paris and Brussels. A very active member of ANCI, he has been its vice president since 2003. He has also been vice president of CEC, the European Confederation of the Footwear Industry, since 2005.
Ballin has been running ACRIB, the powerful association of shoe manufacturers from the Venice region, and the more exclusive Brenta River Consortium since 2000, but its current mandate expires in July. Ballin says he believes strongly in organizing effective team work, as he has done at ACRIB. Artioli is in favor of representing the diversity of the Italian shoe industry.
Some Italian shoe industry officials felt that Cleto Sagripanti, the young president of Manas, was going to run as a candidate for the chairmanship of ANCI. As it turns out he is now entirely focused on the development of his company and on his work for Confindustria, the umbrella organization of the Italian industry.