Shoe Intelligence reports that in 22.Q2, footwear stocks declined significantly in line with global markets. In this context, a research by "Confindustria Moda" shows that sales of Italian footwear are slowing down due to the war in Ukraine, because for 9% of exporters, Russia, Ukraine and Belarus accounted for more than half of their revenues, for 11% between 20 and 50% and for 20% between 10 and 20%. On the contrary, @WTPfootwear informs that the production of footwear in Spain, not ballasted by CIS customers, has recovered well in the same period of 2022
In the second quarter of 2022, footwear stocks declined significantly in line with global markets, which suffered their strongest pullback in decades, according to the Shoe Intelligence report, Footwear stocks track global markets lower in Q2 – Shoe Intelligence: “In the U.S., the S&P 500 index posted its worst performance in the first half of the year since 1970. Global markets were hit by raising inflation, a tightening of monetary policy by many leading central banks, including the U.S. Federal Reserve, and Russia’s aggression of Ukraine. The invasion started in Feb. 24 and has led to a protracted war, international sanctions against Russia and has put further pressure on energy prices and supply chains. Among the companies monitored by Shoe Intelligence, the decline was led by online retailers, which have been struggling with the reopening of physical stores, thanks to the lifting of Covid-19 restrictions, and the shortcomings of their own business models, such as the cost of returned goods. The e-tailers, which are often loss-making, are also proving less attractive as interest rates increase.
Revenues of Italian footwear manufacturers are estimated [by Shoe Intelligence - Italian footwear sales slow down due to war in Ukraine] to have risen by 8.1 percent in the first half of 2022 following a sharp slowdown in sales during the second quarter due to Russia’s invasion of Ukraine on Feb. 24.
According to a survey carried out by Confindustria Moda’s research center among members of the Italian footwear association Assocalzaturifici, Italian footwear manufacturers increased revenues by 12.7 percent year-over-year in the first quarter of 2022, with 70 percent of companies enjoying an increase in sales, 20 percent booking unchanged levels and 10 percent a decline.
The performance in the first three months of the year was better than the initial forecast of a 9.5 percent increase but was below the 19.3 percent surge enjoyed by the whole of the Italian textile, fashion and accessories industry.
The outbreak of the war in Ukraine led to a sharp fall in orders in March, resulting in a 5.2 percent in orders for Italian footwear manufacturers for the whole of the first quarter.
In the second quarter of 2022, revenues are estimated to have increased by 3.6 percent for shoemakers, with 44 percent of respondents booking an increase, 24 percent posting stable revenues and 32 percent suffering a decline.
Assocalzaturifici noted that the estimated growth in the first six months of 2022 is half the 16.1 percent increase registered for the whole textile, fashion and accessories industry and “absolutely insufficient” to return to the levels seen in the first half of 2019, before the onset of the Covid-19 pandemic.
The recovery of the Italian footwear industry is partially hindered by the war in Ukraine. In the whole of 2021, Italian footwear companies exported for €313.4 million of goods to Russia and Ukraine, or 3.0 percent of total Italian exports. Meanwhile exports to Belarus, which was also hit by international sanctions for supporting Russia, totaled €3.9 million last year.
The Confindustria Moda survey indicated that 56.3 percent of respondents exported to at least one the three countries before the war started. For 9 percent of the exporters, the countries represented more than half their revenues, for 11 percent between 20 and 50 percent and for 20 percent between 10 percent and 20 percent.
The survey showed that 35.0 percent of footwear companies used a government-financed mechanism for temporary layoffs during the first quarter and 42.5 percent expected to use it in the second quarter. Nearly a quarter of the panel, 24 percent, expected to end 2022 with a headcount below the levels of June, while 66 percent expected staffing levels to be unchanged and 10 percent foresaw an increase.
In the first quarter of 2022, the overall employee headcount in the Italian footwear industry increased by 0.3 percent, or 209 people, compared with December 2021 to 70,795 people and the number of companies was down by 36 units to 3,945. When the panel is widened to take into account component suppliers, the number of jobs gains totals 140 and the number of companies closed reaches 119.
Based on data provided by Sita Ricerca, Italian household spending on footwear rose by 20.6 percent year-over-year in the first quarter of 2022 to €1,324 million thanks to the easing of Covid-related restrictions. In volume, domestic purchases were up by 15.4 percent to 32.176 million pairs and the average price of shoes increased by 4.4 percent to €41.15.
But, when compared with the first quarter of 2019, household spending plummeted by 10.7 percent in value and by 9.4 percent in volume. Prices per pair were also lower, declining 1.4 percent.
Data from the national statistics office Istat showed that in the three months to March 2022, Italian exports rose by 21.4 percent year-over-year in value to €3,020 million and by 11.7 percent in volume to 58.732 million pairs. The average price per exported pair was €51.41, up by 8.7 percent. When compared to the same period of 2019, exports were up by 13.1 percent in value and down by 4.9 percent in volume, while the average price per pair grew by 18.8 percent.
Exports to the European Union represented 46.1 percent of the total value in the three-month period. They were up by 17.7 percent in value compared with 2020, and grew by 14.7 percent from two years ago. In volume, exports to the EU were up by 8.7 percent year-over-year and down by 3.0 percent against 2019 to 37.870 million pairs, while the average price per pair increased by 8.3 percent and 18.3 percent, respectively, to €36.75.
Overall, Italian imports rose by 28.6 percent year-over-year in the three months to €1,741 million. In volume, shipments grew by 25.1 percent to 110 million pairs while the average import price per pair was €15.82, up by 2.8 percent. Imports were higher than domestic consumption as part of the goods were re-exported.
In the first quarter, Italy’s overall trade surplus in footwear increased by 12.8 percent year-on-year to €1,278 million.
Footwear and leather have led the way in a turnaround in manufacturing activity in Spain [Recovery for footwear and leather production in Spain – footwearbiz], is the analysis of @WTPfootwear.
The National Institute of Statistics (INE) has said manufacturing output rose by 6.5% in May compared to the same month in 2021. The level of output was 7.1% up on the figure for April 2021.
INE also said that the figure for May 2022 was the highest for any month since June 2021 and it said leather and footwear had led the way with an increase of 37.4% year on year.
This is a striking change in fortunes for footwear and leather manufacturing. Figures for May 2021 put these two sectors at the bottom of a list of manufacturing industries that remained a long way behind pre-covid levels of output.
