MILAN — Market confidence in the future of Italian businesses is high, now that the fruits of the European Central Bank’s quantitative easing plan are starting to show — turning the Italian economic frown upside down.
In fact, the Italian fashion and design playing field is ripe with opportunities in terms of investments and business expansion, even more so now that spending will increase further due to the weaker euro, said Italy’s largest bank by market capitalization, Intesa Sanpaolo, on the occasion of its Startup Initiative Fashion & Design Open Innovation Day.
In a study entitled “The Economic Scenario of Fashion and Design,” the bank said that one sector that is still underdeveloped in fashion is the nation’s online industry. “Clothing sales on Italian sites reached 1.8 billion euros [$1.9 billion at current exchange rate] in 2014 with a very high potential for development, given the very small quota of the Italian population that actually buys online.”
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Of all the Italian companies active in the sector, only about five percent of them book a percent or more of their sales online, the bank said. This compares to an average of 14 percent of companies that book a percent or more of their sales online for the entire European Union.
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In terms of start-ups, eight companies, some of them with the focus of promoting Made in Italy and its artisanal appeal, were groomed by the bank prior to presenting their pitches to investors and venture capitalists. The crowd was so packed, some investors stood on the sidelines for the entirety of the four-hour conference.
Quattrocento Eyewear, for example, is an online Italian brand that sells artisan-made sunglasses at affordable prices by cutting out licensing fees and retail markups. Like Warby Parker in the U.S., their sales approach allows customers to try on the collection at home. “We are proving that luxury products can be affordable,” said Sharon Ezra, the designer and product manager.
Design Italian Shoes is an e-commerce platform that allows the user to create customizable men’s shoes fully made by craftsmen in Italy’s Marche region. Chief executive officer Andrea Carpineti said that he already has customers in foreign markets like the United States. “Our strength is that we are close to our artisans,” Carpineti said.
Other presenters included 3-D printing start-up Thingarage; Molopolo, a company that makes interchangeable buttons that can hold wearable devices; Pinktrotters, a women’s online community; Rentez-Vous, a peer-to-peer fashion rental service; Hekate’, a tailor-made skin-care platform, and Modist, a Canadian-based company that invented a visual tool for retailers. Modist also won the 2014 e-PITTI.comDECODED conference.
According to Davide Turco, head of Atlante Ventures VC fund promoted by Intesa Sanpaolo, investors have an increased appetite for innovative start-ups in the luxury sector. “Investors are interested in start-ups bringing new technologies or innovative business models to sectors where Italy has a leading role, not only fashion but food and design as well,” Turco said.
“Mobile marketing, big data analytics and e-commerce are among the hottest topics for the investors” he added.
Overall, the Italian retail and luxury industry is expected to benefit from the euro’s weakness against the dollar for the duration of 2015.
The year is already off to a positive start. The Italian consumer confidence index in February rose sharply to 110.9 from 104.4, its highest level since June 2002, said Italian statistics office Istat. The business confidence climate index increased to 94.9 from 91.6 in January, reaching its highest level since June 2011, Italian statistics office Istat said.
The rise in confidence will help Italian Prime Minister Matteo Renzi to further revive the economy which has not posted one quarter of growth in the last three years.
“The euro should remain weak as an effect mainly due to the ECB’s quantitative easing plan. The expected beneficial effect on the euro zone economy should lead to a slight recovery at the beginning of 2016,” said Stefania Trenti, head of the bank’s industry office.
Across the board, retail and manufacturing companies in Italy already have seen real signs that the currency rate will boost sales, especially from countries like the United States. It still remains to be seen, however, how the Federal Reserve will react to the ECB’s interest rate strategy of printing more than 1 trillion euros, or $1.04 billion, to buy government bonds in order to boost investor confidence with regard to lower interest rates.
“Improved confidence indices point to a recovery on the horizon,” Trenti said.