Italian clothing business hit hard by COVID-19 pandemic

A clothing business owner in Italy faces the most difficult time of her business in a decade. April 19, 2020
By Yan Xiaoqing

Mia was roughly calculating the income of her business at home in the Italian capital of Rome. "Many clothing trade businesses I know have lost at least 50% of their spring orders due to the COVID-19 pandemic." she said during a video interview.

Mia has been running her clothing trade business in Rome for a decade. She imports clothing from China and sells products wholesale to retail stores in Europe. The business had been running smoothly due to her hard work in marketing research, careful management of inventories, and good communications with her clients.

However, plans can change quickly in times of trouble. "When the coronavirus started to spread in January, our clothing factories in China stopped productions. At that point, not many people were infected in Italy. But my friends back in China kept telling me to stock up on face masks, hand sanitizer and food. So, instead of being concerned much for my business, my focus has been more on health and safety issues," Mia said.

Italy declared a state of emergency on January 31, followed by a general lockdown to the whole country on March 12. The lockdown restrictions only allowed essential businesses like supermarkets, pharmacies and a select few other shops to remain open.

"I'm kind of lucky that I had completed all my spring orders before the lockdown. Most of them had been shipped to my clients, and I had been paid. It secured the current cash flow of my business and bought me more time to survive from this recession.”

One difficulty was that many freight logistics companies had stopped their services due to the lockdown. Without them, products could not be shipped to retail stores.

According to statistics from Johns Hopkins University, as of April 13, over 156,000 cases have been confirmed in Italy, with more than 19,000 deaths. Due to the high mortality rate, Italy has maintained very strict restrictions.

"Police will randomly check your ID on the street and ask the reason why you’re outside,"  Mia said. She appreciates the lockdown to safeguard public health, but the downside is that fewer people are shopping for clothes.

The pandemic may result in her suffering a business loss this that cannot yet be calculated. "I know it will be more difficult to sell summer products. Since retail stores won’t be able to sell anything as they remain closed or less people come to the stores, the summer orders will be reduced for sure," she said in a worried tone.

The Italian government established several measures to support businesses during the pandemic. A 600-euro monthly subsidy is given to self-employed people like Mia. And a possible tax credit equal to 60% of the rent of her business premises for the month of March is a possibility.

Mia said: "I haven't seen the details of those measures. They will definitely help me at a certain level, but I'm more concerned about the sales for the rest of the year.

Because of social distancing, Mia has to send summer products’ pictures to her clients through the internet, "I'm thinking of showing product samples online. I thought of it before, but most clients here prefer to meet in person, see the products, and check the quality of the fabrics. It's impossible to operate this way now.

"Some of the young people in the industry started to build products website since the pandemic began. And they tried to collect payments online. But, the pandemic is slowing things down here," she said.

"Even though online sales work for us, we still need to wait for all retail stores' reopening and selling out their inventories. And no one knows when the lockdown could end."

The Italian government extended the COVID-19 lockdown to May 3. However, select shops previously closed were permitted to reopen from April 14. Those shops included bookstores, dry cleaners, etc. But Mia's business was not on the list.

Mia said. “It's been three months. I really hope this pandemic could be over soon. If it continues in Italy, I cannot imagine the extent of the losses, and I’m not sure how long I can keep my business operating."

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