As Italy’s Economy Struggles, Smaller Fashion Houses Seek Overseas Success

Smaller Italian fashion designers are trying to mimic the international success of luxury brands like Prada. Yulia Grigoryeva/Shutterstock.com

Bridal and formal wear dresses lined the walls of the Hotel Covo dei Saraceni in Polignano a Mare, a small seaside town in the Puglia region of southern Italy. It is not traditionally thought of as a hub of Italian fashion, like Milan, but the region’s designers are looking to change that.

They were participating in a trade show hosted by the Italian Trade Agency last month to display their latest collections to buyers brought in from all over the world, especially those from the U.S., Japan, Britain and the Emirates.

Retailers buzzed around the room, inspecting a sleeve here and a zipper there, while consulting pricing sheets and determining whether their customers would want to buy the garments.

For the designers, they are hoping to use the reputation of the ‘Made in Italy’ label to overcome the country’s economic downturn and access more customers through overseas exports. It may seem unlikely upon first glance, but the relationship between smaller designers in this corner of Italy and consumers in Tokyo, for example, is a logical one given Italy’s traditional focus on quality and craftsmanship.

These designers, however, will need to learn to operate in a new and growing global marketplace to secure the relationships they will need to succeed in foreign markets.

This was the first showcase of its kind that the ITA had conducted outside of Milan, according to ITA’s New York-based trade analyst Claudia Schirripa. The focus was on the fashion industry, in particular, in order to diversify the country’s sartorial offerings to the world market.

Based on data from the International Monetary Fund’s Economic Outlook Database, clothing exports ranked in Italy’s top 10 highest performing industries, with exports totaling approximately €13.9 billion ($15.2 billion). Much of that comes from the larger, world-renowned fashion brands like Prada, Gucci, Armani, and Dolce & Gabbana.

These luxury brands experienced high growth around 2010-2011, in part thanks to reduced manufacturing costs in China. Exports grew in that period as a result. However, over the last three years there has been a decline in the industry overall, and specifically for the Italian fashion sector.

Consumers in Italy and Europe have had limited purchasing power to splash out on luxury items, particularly in the formal and bridal wear sectors, and have been turning to larger brands for mass-produced goods, where quality often suffers at the expense of cheaper apparel.

This data mostly focuses on larger companies, though, and not the smaller, independent Italian designers looking to grow their client base overseas.

The larger fashion houses can afford to outsource operations to China. Couple that with the relatively relaxed requirements for using the “Made In Italy” label and smaller operations have trouble competing, according to Ciro Gennaro, director of exports for Louisa Sposa, one of the bridal wear exhibitors at the showcase.  

The Puglia fashion house Luisa Sposa sells mainly wedding dresses and formal wear. Photo: Mythili Sampathkumar

The Puglia fashion house Luisa Sposa sells mainly wedding dresses and formal wear. Photo: Mythili Sampathkumar

Cinzia di Dio, head of fashion within the ITA’s consumer goods division, said the organization wants to focus on promoting the “Made in Italy” label for these smaller designers who “truly do source and make” all their garments within Italy. The emphasis, she said through a translator, is on the quality that is associated with Italian design, and subsequently the “Made In Italy” designation.

Gennaro and Rosalinda Pizzutilo, co-founder and lead designer of bridal wear manufacturer MySecret Sposa, agree.

“It is a very strange time in Italy now because of the economic situation but I think if [designers like us in Puglia] continue to work on quality and not quantity…we can generally help the economy,” says Gennaro.

Pizzutilo, who opened her boutique in Puglia just two years ago despite the poor economic situation, said the Italian market “has been invaded” by cheap imports—designers say much of the market saturation comes from China—though she points out that “it’s not really a competition…for customers who want real quality.”

As Grant Harris of the Washington, DC, image consultancy firm Image Granted explains, smaller designers have to ask themselves an important question: “Am I going to sacrifice on quality, speed, or price? You can’t have all three.”

Both Gennaro and Pizzutilo have clearly chosen to sacrifice speed for the other two “legs of the stool,” as Harris calls them.They get all the material used in their bridal and formal wear dresses from inside Italy, often locally, save for lace that is shipped from France.

The clientele they and many others are targeting is often in Japan. Harris explains that despite the growing purchasing power of Chinese consumers, the relationship between independent Italian designers and Japanese consumers is a natural one.

Because Japanese culture recognizes the importance of “heritage, craftsmanship, and pride of piece” they tend to “admire other cultures that do the same” like Italy, says Harris. Japanese consumers tend to be willing to spend accordingly on Italian designer formal and bridal wear.

Wedding dress from a local Puglia designer against the backdrop of Covo dei Saraceni, Polignano a Mare, Italy. Photo: Supplied.

Wedding dress from a local Puglia designer against the backdrop of Covo dei Saraceni, Polignano a Mare, Italy. Photo: Supplied.

 The question remains, though, are these small design houses really ready to become bigger players in the Japanese market and further afield? The ITA certainly wants to push for that to happen, providing the funds to make showcase attendance possible for designers who may not have able to take part otherwise and flying in a host of buyers from large markets.

Yet according to Australian buyer and co-owner of Sydney’s Peter Trends Bridal, Monique Boersma, there needs to be more business skills training for the designers.

It was clear walking around the showroom there was plenty of pride in these companies and their designs, but some did not have websites for foreign buyers and consumers to view designs. Others were more web-savvy, but Boersma and other buyers are wary of buying from some of the Puglia-based designers despite the quality of construction and aesthetic since they did not include costs like tailoring fees, “customs duties, and shipping costs in their initial pricing.”

For Boersma it would have been a lot of trouble to calculate these added costs for each item she was interested in purchasing for her store. The “classic Italian look,” as Pizzutilo describes it, is appreciated, but the reality of business operations takes precedence for the buyers.

This may also explain further the relationship between the designers like Luisa Sposa and MySecret Sposa with the Japanese market. Harris says Japanese consumers are more willing and able to accommodate additional costs, while there is also a lack of regulations on Italian apparel imports compared to other non-EU markets.

The tendency among Japanese customers to have “cult-like” loyalty to brands is another factor in the relationship as loyalty is key for independent designers, Harris explains.

It is also why they steer clear of many Chinese retail buyers. These smaller designers in Italy have a negative view of the Chinese market because of the influx of cheaper garments from there, as well as larger houses’ outsourcing of production to China. They worry that their unique traditional designs will be copied—or worse, copied badly—and counterfeits of their designs sold in China, says Harris.

The lack of readiness to adapt business practices to foreign buyers outside of Japan may hurt smaller designers in the long run, however. Though the relationship between Italian craftsmanship and Japanese respect for the art of that craft is a natural one, the Japanese market is essentially limited in scope. There have to be some adjustments to pricing and selling practices for these companies to reach the global marketplace and have any real effect on the much-needed growth of the Italian fashion industry and economy overall.

Mythili Sampathkumar traveled to Puglia as a guest of the Italian Trade Agency.