MILAN — Despite a grim economic outlook at home, major Italian yarn players set to show their spring 2013 collections at the Pitti Filati trade show Jan. 25 to 27 said they saw improved full-year sales in 2011, thanks to a growing export business.
Stabilizing wool prices, the weaker euro against the dollar and improved sales in the U.S., China and emerging markets helped boost exports, offsetting a decline in sales in key markets such as Japan and Italy. On Friday, the euro was trading at $1.26, down from $1.42 last May.
“If the exchange rate between the U.S. dollar and the euro maintains [its] current position, it will help European countries maintain a competitive edge over new competitors,” said Stefania Bernardi, Filatura e Tessitura di Tollegno’s export manager.
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“A weaker euro would help us to boost exports by reducing the gap in expenditures with Chinese producers,” said Paolo Todisco, chief executive officer of Zegna Baruffa Lane Borgosesia.
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According to Italian statistics office Istat, Italy’s gross domestic product contracted 0.2 percent in the third quarter and economists expect the economy to show a decrease in the fourth quarter, as the nation’s new prime minister, Mario Monti, struggles to remedy Italy’s debt problems and restore confidence in the euro zone’s third- largest economy.
In December, Italian consumer confidence dropped, reaching its lowest levels since January 1996 due to fears over the general economy.
“The final consumer is probably going to buy less but will always be more attracted to special items that create emotion,” said Lineapiu press director Lola Coppini.
Federico Gualtieri, Filpucci’s vice president, said, “10 years ago, Italy made up 50 percent of our entire sales. Now, it makes up 35 percent.
Gualtieri added that big brands like Armani and Max Mara are sustaining the market, while smaller brands are dying out.
Since Pitti Filati’s last edition, the scenario regarding raw material prices has changed. In July, companies were hit hard by soaring prices and resorted to stocking raw materials in advance to shield themselves from the record high costs. Cotton prices peaked at more than $2 a pound last spring before slowly descending to less than $1 a pound at year’s end, leaving many companies with high-priced inventories.
Lisa Lisanti, Italian country manager for Woolmark, said Australian wool producers, aided by the Australian government, have begun to remedy the shortage by increasing and enhancing the production of wool through advanced breeding techniques. The Chinese are also working on establishing themselves as sophisticated wool producers, Lisanti said.
“Wool is still a pricey material mostly because it is used by fashion and luxury brands, yet wool prices are stable,” Lisanti said, noting that the six-month average for wool prices is about 11 Australian dollars per kilo or $11.31 at average exchange rates for the periods in question.
According to the U.S. Department of Agriculture, wool was selling for $5.11 a pound on average on Dec. 26 compared with $4.18 a pound a year earlier.
Kinross, Scotland-based cashmere firm Todd & Duncan said despite high prices of cashmere, 100 percent cashmere yarn is the company’s best-selling segment.
“With yarn prices being so high, clients require traceability, quality guarantees and high levels of service,” said the company’s sales director, Bruce Cameron.
With luxury fabrics and yarns in high demand, key players like Lineapiu said sales rose about 8 to 10 percent in 2011, in line with Zegna Baruffa Lane Borgosesia, which said 2011 sales rose about 10 percent. Cariaggi said that its revenue in 2011 increased 27.3 percent, while Filpucci, a fancy yarn producer based in Prato, said revenue rose 20 percent in the first seven months of 2011 compared with same year-ago time period, driven by the U.S. market and European fast fashion brands.
Cariaggi said it will continue to invest in 2012 in promotion and sales abroad and will open a Shanghai office in June. Filpucci also said that it is not opposed to making investments, especially in South America, where it sees attractive growth prospects.
On the style front, blends will make their way on the trade ground floors at the end of the month.
Cariaggi will present a new linen project at Pitti, which will see fine linen produced in Italy mixed with cashmere. Iafil said long cotton fibers will continue to play a role and is increasingly considered a prestigious material, while Filatura e Tessitura di Tollegno said it will propose natural fibers such as wool, silk and cotton blended with viscose for its spring-summer 2013 line.
Todd & Duncan will showcase knitting techniques like laser cutting, shredding, torn, tasselled, lattice stitches and pearl stitches in its collection, while block-printed florals will be transformed into intarsias and jacquards. African landscapes and colors such as mustard yellow, deep sienna and Madeira brown will be present at Cariaggi, while antique-looking linen colors reminiscent of the Toiles de Jouy fabrics from the 18th and 19th centuries will be showcased at Todd & Duncan.