Fashion retail crisis: nearly 17,000 shops closed in Italy in the last four years
According to data from the Italian Fashion Federation, the industry seems to have suffered a serious crisis for 10 years. Read on to find out more.
Is the fashion retail industry facing a crisis?
The crisis already felt by the fashion retail industry seems to have been further exacerbated by the epidemic and the growing popularity of e-commerce, leading to fashion becoming the industry with the highest number of shop closures worldwide. Country.
Between 2012 and 2023, there has been an exponential decrease in the number of points of sale in the fashion retail industry, with more than 100,000 retail shops and more than 24,000 street trading activities, while if we focus on the last 4 years, we have witnessed the closure of 16,863 shops that have left 13,000 people unemployed.
The decline was -2.7% in 2023 and increased in the first months of 2024, with -4.5% year-on-year in January, -4.6% in February and -3.1% in March.
In addition to the impact of online sales, which were heavily implemented and generally favored throughout the pandemic, we must not forget the relevance of the extreme boom in fast fashion production in the Fashion retail crisis, which led to a 200% increase in global production from 2000 to the present.
The result, in addition to having a strong impact on the personal reality of individual workers, has been the severe impoverishment of urban commercial networks that have done nothing but be occupied by closed points of sale and, subsequently, by single-brand chains associated with brands. Fast fashion has continued to lower the threshold for the average family to spend on clothing, which averages around €100 per month.
In short, the Made in Italy the retail situation is in decline, which has a clear impact on our country, which is why the President of the Italian Fashion Federation has asked the government to intervene in a timely manner, similar to the interventions in the furniture sector.
President Filoni’s main demand is a reduced value-added tax on clothing and accessories. This provision places e-commerce and brick-and-mortar shops on the same fiscal level and provides a series of tax incentives for leasing. In addition, many major e-commerce companies based abroad enjoy lower taxes than those in our country, exacerbating the existing inequalities.
The worst affected by the fashion retailing crisis are the smaller companies, which have difficulty fending off competition or maintaining large expenses, eliminating the possibility of developing and establishing themselves in the Made in Italy sector.
Is luxury e-commerce also facing a crisis?
Benji Dymant, Co-Administrator of Matches, issued the following statement a little over a month ago:
“Like many luxury fashion retailers, Matches has experienced a sharp decline in demand over the past year due to the macroeconomic environment of high inflation and high interest rates that have led to significant pressure on discretionary spending.”
Matches is a global luxury e-commerce platform selling its products in over 200 countries. Matches offers ready-to-wear footwear, bags, and accessories for women, men, and lifestyle. The company operates online and through three shops in London but has recently been forced to lay off up to 273 staff.
After the huge success of the last decade, especially after the pandemic, it was thought that the e-commerce industry would maintain its market share and even see significant growth in the coming years. Still, recent figures in Fashion retail show the opposite.
According to Fashion Network, GlobalData fashion analyst Alice Price emphasized:
“Whilst it is uncertain whether Starlion will dissolve Matches altogether, or use administration to restructure the business and reduce operating costs, this news represents the latest blow to the luxury market.”
“The luxury market continues to suffer from an overall slowdown in demand for luxury goods, particularly in Europe and the United States, as aspiring consumers continue to cut back on spending amid ongoing inflationary pressures.”
“Designer brands have also begun to reduce their reliance on wholesale partners in favour of investing in direct-to-consumer businesses to better control their brand image and maintain their unique appeal. This has led to a decline in customer acquisition in the marketplace, with Matches resorting to various discounts to attract sales, which in turn has impacted margins and consumer perception.”
CONCLUSION: The fashion retail industry has been going through a serious crisis for 10 years, closing nearly 17,000 shops.
Read also:
EPIC PERFORMANCES BY ARIANA GRANDE AND CYNTHIA ERIVO IN 2024 MET GALA
2024 MET GALA: SLEEPING BEAUTIES: REAWAKENING
By Jialin Tan
NEWSLETTER
Vuoi ricevere Mam-e direttamente nella tua casella di posta? Iscriviti alla Newsletter, ti manderemo un’email a settimana con il meglio del nostro Magazine.
