The glitterati have descended on Northern Italy for Milan Fashion Week. From September 19th to 25th, big names such as Versace, Armani and Prada showcased their spring/summer 2019 womenswear collections for the industry’s most exacting eyes. This bi-annual event highlights not only the international prestige attached to Italy’s luxury goods market, but also the industry’s role as a driver of economic growth.
Along with London, Paris, and New York, Milan Fashion Week is one of the so-called “Big Four Fashion Weeks”. The event has been held since 1958 and attracts more than 22,000 visitors each season. Fashion shows are held near famous landmarks such as the city’s Piazza Duomo or the Castello Sforzesco courtyard as well as at indoor studios. While major Italian brands headline the event, up-and-coming designers also have an opportunity to promote their brands.
The weeklong event provides a substantial jolt to the local economy. While Milan Fashion Week attracts fewer visitors than Paris, New York, and London, the city’s visitors spend more on average than at other fashion events – nearly 2,000 euros each. This means Milanese businesses such as restaurants, retailers, and hotels tend to earn in excess of 37 million euros per season.
The choice of Milan as Italy’s de facto fashion capital reflects the presence of numerous luxury goods firms operating in the greater Lombardy region. In Milan alone, there are 13, 000 fashion firms whose revenue contributes to around one-fifth of the city’s GDP. The Lombardy region, of which Milan is the capital, accounts for a significant portion of Italy’s fashion exports including both clothing and leather products. In 2016, the region’s exports amounted to 9.2 billion euros. This represents a 4.7 percent increase from the previous year, and is four times the overall growth of Italian exports during the same period.
While some may see the fashion industry as the height of superficial frivolity, it’s actually a key driver of economic growth in Italy. The Confindustria Moda, which includes fashion, accessories and textiles, consists of more than 67,000 companies, 580,000 workers and achieves annual turnover of around 88 billion euros. Moreover, the fashion and textile industry makes up approximately half of Italy’s commercial trade surplus. Taken together, this explains why fashion and textiles are Italy’s second largest industry after machinery.
The success of Italy’s fashion industry is also evident when viewed from an international perspective. According to Deloitte’s Global Powers of Luxury Goods 2018 report, Italy has the largest number of luxury goods companies, with fashion companies such as Prada Group and Georgio Armani making it into the top 25 firms by annual sales. Furthermore, it’s also home to six of the 25 fastest growing luxury firms including Valentino and Furla, who made it into the top five. Overall, about 40 percent of luxury clothing and footwear firms are headquartered in Italy.
Despite the dominance of Italy’s luxury goods firms, they account for just 15.6 percent of the sales generated by the top 100 global luxury goods firms. However, the scale of these companies is actually an essential part of their success story. Many of Italy’s luxury firms are small or medium sized enterprises (SMEs) and are often either family owned or operated. By focusing on sustainable production and long-term growth, these firms have been effective at avoiding the brand deterioration that has plagued larger fashion houses. In fact, 90 percent of Italian companies are categorized as SMEs.
Milan Fashion Week is a reminder that Italy is home to some of the most vibrant, competitive firms in the world. Italy’s famous lifestyle is synonymous with pleasure and enjoyment, and those consumers looking for a taste of la dolce vita need look no further than the country’s top luxury brands.