World News

Long-term growth of Italian fashion sector not at risk from Coronavirus: report

MILAN (Reuters) – The coronavirus epidemic in China will weigh heavily on Italy’s fashion industry in the first quarter and probably through the first half of 2020, but will not dent the sustained growth expected for the next two years, think-tank Prometeia said.

The sector’s revenue is expected to rise to 80 billion euros ($87 billion) in 2021, from 71.7 billion in 2018. The calculation is based on the 173 Italian fashion companies that have a turnover above 100 million euros.

“We expect a rebound after great fatigue in the first quarter and very likely also in the first semester due to the coronavirus. There will be a long tail when the situation stabilizes because there will be congested ports,” Prometeia senior partner Alessandra Lanza told reporters at an annual joint report with investment bank Mediobanca.

“That said, we don’t think this will jeopardize the growth of the industry that will be sustained,” she added.

Chinese shoppers fueled a decade of growth for the luxury goods industry and today account for 35% of the sector’s global sales, estimated at 281 billion euros last year by consultancy Bain & Co.

China is also a major supplier of raw materials and fabrics to the European fashion industry. But the virus has seen parts of China put under quarantine, flights halted and many factories closed in early 2020.

(Reporting by Claudia Cristoferi, editing by Giulia Segreti; editing by David Evans)