Attention is focused on the deep crisis facing the Florentine leather district, which is closely linked to luxury brands. President Volpi from Ebret, the bilateral organization that collects and distributes social safety nets in the craft sector, confirms: “The situation is very serious, urgent interventions are needed”. In the Scandicci region alone, the most affected region, we are talking about more than two hundred companies that have almost come to a halt, with a total of around 4 thousand workers benefiting from redundancy pay. “Luxury leather products, one of the engines of the metropolitan economy, are stalling,” Simone Balducci, head of leather goods manufacturers at Cna Firenze, warned on January 23.
In the facilities
Limited to a few supply chains, early signs date back to the end of 2022. 2023 confirmed the decline in production. “And we expect even smaller orders for ’24,” warns Balducci. There are many reasons. From the Russia-Ukraine war, which eliminated major trade outflows to Moscow, to the change in tastes of customers who want sophisticated and personalized products. Going through political “inattentions”.
“The diversification of investments implemented by major brands and the imperfect distraction of regional policies have favored more financially favorable regions of Italy,” explains Cna, head of the leather goods industry, bringing the Tuscan Region directly into the spotlight: “This phenomenon has been going on for years and has gotten worse recently.Transportation has become easier with the ‘special economic zones’ provided for by national legislation. brands We are moving to regions such as Campania, Puglia and Abruzzo. Without thinking about cost reduction, starting from the cost of renting a warehouse, which today is worth its weight in gold in Scandicci. “There was a lack of planning interventions that could prevent this situation at the regional policy level.”
run for cover
Now we are trying to make up for it. On Monday afternoon, the employers’ parties represented by Assopellettieri and the unions CGIL, CISL and UIL will meet at Confindustria’s regional headquarters in via Valfonda in Florence. Conditions are not rosy at all.
The main reason given by organizations protecting workers is “Many companies are experiencing difficulties, and social safety nets are running out. We need to provide oxygen urgently, then we will have to rethink the entire production system.” Without new perspectives not seen today, the situation will explode and we will soon see pickets and protests.
Risk of “desertification”
The number of companies in “bad shape” will be more than two hundred, and almost all of them will be in the Scandicci region. We have approximately 4 thousand employees in total. When it comes to the “rethinking” model, major luxury brands are also under attack. On the one hand, they brought with them the often-praised millionaire investments and employment. But on the other hand, they also contribute to the risk of productive “desertification” of the district.
“Big brands dictate the laws in the market. They come and internalize all kinds of figures. By doing this, on the one hand, we lose craftsmanship, on the other hand, after ten years, no one will be able to create a finished model product”, sighs an employee who knows the situation well towards the works.
Hiring all the craftsmen in the area and specializing them in the production of individual pieces (buckles, belts, cuts, etc.) creates a multiple effect. “You can no longer find a free craftsman working on small orders or on his own, and at the same time over-specialisation means the disappearance of creativity and general ‘know-how’. If brands were to switch places at this point, we would be faced with.” with desertification”, continues the same source.
According to cna data, layoffs in the sector’s metropolitan area almost doubled between January and November 2023, reaching an annual total of 396 companies and over 4,200 workers between January and November 2023. The next hurdles then include the renewal of the employment contract and the associated increases: these will be painful.
Cna, from a more predictable perspective than Balducci, criticizes the Region for not implementing an adequate response planning policy. The alarms, even the recent ones, were actually numerous.
“The crisis in the fashion industry also has serious repercussions on the metal accessories supply chain, where seven out of ten companies demand social safety nets. We are deeply concerned. There is a sharp slowdown across the industry as a whole,” he said in a note. A recent report published by Fim Cisl on December 16 stated that the main reason was that fashion houses blocked orders.
In the joint document signed with Fiom Cgil and Uilm Uil of those days, it was emphasized that “there is an urgent need for a socio-economic project to defend the fashion industry and to solve the many inequalities and problems produced by a sector that is at risk of being crushed by a perfect storm.” due to production shutdowns in recent months”.
“The fashion industry in the Florence region is experiencing a sharp slowdown after years of double-digit growth, with demands on social safety nets doubling from a year ago. CISL Florence-Prato Fabio Franchi and Femca-CISL Florence fashion representative said on December 11 that in the first two months of 2024, many artisan companies will run out of support tools and we will face a significant risk of layoffs. – Prato Gianluca Valacchi. The specified limit was February. Here we are.
“A perfect storm is brewing in the industry, in the silence of everyone, from those at the head of various supply chains to politics, very intense due to the upcoming elections. We call for an urgent meeting of the table.” “With all the issues involved, if we want our region to have a future”, he condemned Franchi and Valacchi.
Reasons include “wrong strategic choices”; For example, “uncontrolled production of parts, bags and shoes to be released and currently stuck in warehouses of major brands” and “organisational models that rely on mechanization and replace a completely manual process”, to name but two examples, according to CISL unionists’ complaint last December .
Double digit declines
Data published by CISL in December shows that the Tuscan fashion industry overall decreased by -9.2 percent in the second quarter of 2023 compared to the same period in 2022, with a decrease of -8.8 percent in clothing and even -25.9 percent in footwear. The figures, which have led to an increase in demands for layoffs and access to a bilateral solidarity fund for the tradesman sector, have affected the entire fashion supply chain, including textiles, leather goods and footwear, along with sectors linked to the Scandi region since October.
In the fashion industry in Florence, 38 thousand hours of redundancy payments were allowed by INPS in September 2022. In the same month in 2023, it was 75 thousand, that is, almost double. It’s more of a crisis than what’s been revealed.
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.