MADE IN ITALY
Area Centro Studi   Textile / Clothing / Fashion Chain



                          September 2005



      ...
THE ITALIAN TEXTILE AND CLOTHING INDUSTRY
The Italian textile and clothing industry is unique, lively, innovative, and lea...
MADE IN ITALY FASHION FIGURES IN 2004


                                Turnover         Export       Trade balance   Ente...
THE ITALIAN TEXTILE/CLOTHING (T/ ) SECTOR
                                       C
IN 2004 (in current millions of Euros)
...
THE WEIGHT OF T/C ON THE ITALIAN MANUFACTURING
SCENARY IN 2004



                             % weight on manufacturing
 ...
ITALY’S WEIGHT ON THE WHOLE EUROPEAN
TEXTILE/CLOTHING SCENARY IN 2004



                                % weight of Italy...
AN INDUSTRY WHERE LARGE AND SMALL COMPANIES
COEXIST SUCCESSFULLY

The international success of Italian T/C has been favour...
ENTERPRISES, EMPLOYEES AND TURNOVER IN THE
ITALIAN TEXTILE/CLOTHING SECTOR (2004) (*)

                                   ...
The T/C Sector’s
 Foreign Trade




                   -9-
THE ITALIAN T/C SECTOR’S FOREIGN TRADE
The Italian T/C industry is strongly export-oriented: actually, more than 62% of th...
FOREIGN TRADE FLOWS OF THE ITALIAN
TEXTILE/CLOTHING INDUSTRY (2004)

                                  Import             ...
TRADE PARTNERS OF THE ITALIAN T/C INDUSTRY IN
2004 (in millions of Euros)


       The top 10 customer countries          ...
THE MAIN WORLD’S EXPORTERS OF TEXTILE
PRODUCTS (1995-2003)

                                     8,0                      ...
THE MAIN WORLD’S EXPORTERS OF CLOTHING
PRODUCTS (1995-2003)

                                     10,0

                  ...
The geography of the
  Italian T/C sector




                       -15-
THE GEOGRAPHY OF THE ITALIAN T/C SECTOR


This heritage of specialization and this network of relationship find a special ...
WHERE MADE IN ITALY FASHION IS BORN
                       Como
              Varese           Bergamo - Brescia
         ...
ITALY’S MAIN T/C DISTRICTS (2004)
                                                                                       T...
Retail system
and chain model



                  -19-
CONSUMER - INDUSTRY COMMUNICATION: RETAIL
The industry’s attention to the consumer’s
behaviour was favoured in Italy by th...
THE CHAIN MODEL

     VALUE CROSSES ONE SINGLE CHAIN :


         DESIGN         INDUSTRY             RETAIL




    HOW T...
ORIGINALITY
                    (From Renaissance to XXI century)


AUTHENTICITY                                      TECH...
For further information:
             SISTEMA MODA ITALIA
             Economic Studies Dept.
                 Viale Sarca...
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The Italian Textile And Clothing Industry

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The Italian Textile And Clothing Industry

  1. 1. MADE IN ITALY Area Centro Studi Textile / Clothing / Fashion Chain September 2005 -1-
  2. 2. 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. -2-
  3. 3. MADE IN ITALY FASHION FIGURES IN 2004 Turnover Export Trade balance Enterprises Employees (Mill. of Euros) (no.) Textile/Clothing 42 551 26 600 11 691 67 457 543 124 Shoes 7 310 6 196 3 619 7 084 100 934 Leather products 2 600 2 168 1 165 6 400 33 300 Goldsmithery/Jewellery 4 330 3 916 3 011 11 000 47 000 Perfumery 7 414 1 983 719 550 35 000 Glasses 1 877 1 529 1 077 1 180 16 980 Fashion quot;Made in Italyquot; 66 082 42 392 21 282 93 671 776 338 % incidence on manufacturing sector's 16,6 14,6 14,8 total amount Source: SMI on ISTAT, Movimprese, Prometeia and Sector Associations' data -3-
  4. 4. THE ITALIAN TEXTILE/CLOTHING (T/ ) SECTOR C IN 2004 (in current millions of Euros) 2000 2001 2002 2003 2004 Trunover 47 101 47 789 45 889 43 150 42 551 yoy % change 1,5 -4,0 -6,0 -1,4 Export 27 047 28 952 27 989 26 335 26 600 yoy % change 7,0 -3,3 -5,9 1,0 Import 13 173 14 150 14 315 14 244 14 909 yoy % 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 30 860 yoy % change -0,7 -2,3 -3,6 -0,6 Enterprises (number) (*) - 73 344 71 840 70 001 67 457 yoy % change -2,1 -2,6 -3,6 Employees (number) (*) - 609 629 596 071 567 032 543 124 yoy % change -2,2 -4,9 -4,2 Structural indicators (%) Export on turnover 57,4 60,6 61,0 61,0 62,5 Import 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 -4-
  5. 5. THE WEIGHT OF T/C ON THE ITALIAN MANUFACTURING SCENARY IN 2004 % weight on manufacturing sector (2004) Turnover 9,3 Added value 9,7 Export 9,6 Trade balance 30,9 Source: SMI on ISTAT data -5-
  6. 6. ITALY’S WEIGHT ON THE WHOLE EUROPEAN TEXTILE/CLOTHING SCENARY IN 2004 % weight of Italy on EU Textile/Clothing (2004) (*) EU 15 EU 25 Turnover 25,0 23,5 Investments 39,9 36,2 Employees 31,1 24,5 Enterprises 73,3 66,5 Source: SMI on Euratex data (*) - Provisional data -6-
  7. 7. 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. -7-
  8. 8. ENTERPRISES, EMPLOYEES AND TURNOVER IN THE ITALIAN TEXTILE/CLOTHING SECTOR (2004) (*) Turnover ranges (in million of Euros) <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 -8-
  9. 9. The T/C Sector’s Foreign Trade -9-
  10. 10. 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%. -10-
  11. 11. FOREIGN TRADE FLOWS OF THE ITALIAN TEXTILE/CLOTHING INDUSTRY (2004) Import Export Tr. Bal. Millions Var.% Millions Var.% Millions of Euros of Euros of Euros The composition of Italian T/C’s trade surplus in 2004 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 Hosiery Yarns - Yarns 2 056 -5,2 2 442 5,0 386 Knitwear 5,6% 3,2% Fabrics 13,2% - Fabrics 1 887 2,3 6 286 2,1 4 399 36,8% - 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 Clothing items Other textiles and - Knitwear 3 989 15,4 5 572 0,5 1 583 31,7% special fabrics - Hosiery 158 13,9 827 0,7 669 9,4% Source: SMI on ISTAT data -11-
  12. 12. TRADE PARTNERS OF THE ITALIAN T/C INDUSTRY IN 2004 (in millions of Euros) The top 10 customer countries The top 10 supplier countries 3500 2500 2003 2004 2003 2004 3000 2000 2500 1500 2000 1500 1000 1000 500 500 0 0 a y n a e y a m ia ds di ke in an si c ai a n n ce a y a an iu ng d an m Us n ai an i pa In ni Sp Ch i r n ss an m lg la an Tu m do Sp Ko Fr Tu la Ja m er Be er Ru m Ru Fr er ng er G th Ru ng itz G Ne Ki Ho Sw d ite Un -12-
  13. 13. THE MAIN WORLD’S EXPORTERS OF TEXTILE PRODUCTS (1995-2003) 8,0 Taiwan 6,0 % c hang e o f s hare (1995-2003) China 4,0 India 2,0 Franc e Us a 0,0 Italy -2,0 Be lg ium The bubble 's dime ns io n indic ate s the impo rtanc e o f the -4,0 Japan c o untry o n to tal flo ws Ge rmany S o uth Co re a -6,0 0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0 16,0 % s hare o n wo rld e xpo rt (2003) -13-
  14. 14. THE MAIN WORLD’S EXPORTERS OF CLOTHING PRODUCTS (1995-2003) 10,0 8,0 China % c hang e o f s hare (1995-2003) 6,0 4,0 India Me xic o 2,0 Be lg ium Turke y 0,0 -2,0 The bubble 's dime ns io n Us a indic ate s the impo rtanc e o f the -4,0 Italy c o untry o n to tal flo ws Franc e Ge rmany -6,0 Ho ng Ko ng 0,0 5,0 10,0 15,0 20,0 25,0 30,0 % s hare o n wo rld e xpo rt (2003) -14-
  15. 15. The geography of the Italian T/C sector -15-
  16. 16. 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. -16-
  17. 17. WHERE MADE IN ITALY FASHION IS BORN Como Varese Bergamo - Brescia Mantua Milan Vicenza - Treviso Padua - Rovigo Modena - Reggio E. Biella - Novara Teramo - Pescara Prato - Pistoia - Florence Bari Arezzo - Perugia Lecce Naples -17-
  18. 18. ITALY’S MAIN T/C DISTRICTS (2004) Turnover Export % on No. No. District/Province Pr. Sector (Mill. Euros) turnover Enterprises 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 -18-
  19. 19. Retail system and chain model -19-
  20. 20. CONSUMER - INDUSTRY COMMUNICATION: RETAIL The industry’s attention to the consumer’s behaviour was favoured in Italy by the existence Retail channels in Italy, clothing of an articulated retail system, with a significant items (2004) (% weight) presence of independent retailers. The need to modernize retail outlets is leading to Others a rapid evolution of the retail system towards (14.5%) more highly structured models with larger sales areas. The retail system of the early 21st century Department requires a stronger producer - retailer - Stores, consumer interaction, a new technology in super/hyper markets communication as well as a new organisation of (17.3%) 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 Independent Independent underway in Italian companies all over the Chains Stores production pipeline. (17.7%) (50.6%) Source: SitaRicerca -20-
  21. 21. THE CHAIN MODEL VALUE CROSSES ONE SINGLE CHAIN : DESIGN INDUSTRY RETAIL HOW TO TURN IN ORDER  TECHNOLOGY TO TRANSMIT TECHNOLOGY  INNOVATION TO CONSUMERS INTO ART  QUALITY/PRICE AN UNIQUE IMAGE -21-
  22. 22. ORIGINALITY (From Renaissance to XXI century) AUTHENTICITY TECHNOLOGICAL LEADERSHIP (Made in Italy) (The textile districts) MADE IN ITALY FASHION SYSTEM ORGANIZATION EXCLUSIVENESS EFFICIENCY (Italian life style) (The chain model) QUALITY/PRICE RATIO (Value for money) -22-
  23. 23. For further information: SISTEMA MODA ITALIA Economic Studies Dept. Viale Sarca, 223 20126 Milan Italy Ph. no. +39 02 641191 Fax no. +39 02 66103667-70 areastudi@sistemamodaitalia.it -23-

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