Orders sink for Italy's luxury suppliers as coronavirus spreads
The COVID-19 outbreak has hit the entire leather supply chain, reports Channel News Asia, This is illustrated by the current situation in Italy, where luxury brands, such as Gucci and Louis Vuitton, have scaled back on their orders from suppliers. The virus has spread from key market China to Italy and hit the sector hard in the wealthy northern region of the Mediterranean country. Italy experienced the biggest epidemic outside China and was forced to enact a lockdown on the region.
As demand plummets in China, the production grinds to a halt too. Luxury brands rely on networks of local suppliers, but as there are no sales, there are also no orders for producers of leather and textile goods in the Tuscany and Veneto region. The domino effect has far-reaching effects on the whole sector in Italy and outside, as fear and insecurity reigns.
The Eastern luxury market was already severely affected by the on-going protests in Hong Kong. Even when the outbreak will be subdued, the end of its impact is not yet in sight. As the whole supply chain of these luxurious brands is hit and recovering may show prolonged effects.
Not only the fashion industry has been hit hard by the pandemic. The automotive industry has also been affected due to quarantine measures; many factories are temporarily closed or run at half capacity. People work from home and are not in the market for a new car. Suppliers, like those of leather car interiors, are by extent also facing a standstill.
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The Italian leather industry is reopening, writes La Conceria. They report on the measurements taken by UNIC, the Italian tanners organization, to enable work to resume. However, these still will need to align with regional protocols. More.