Italian silk-makers confront changes in luxury market | Business| Economy and finance news from a German perspective | DW | 02.06.2010
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Italian silk-makers confront changes in luxury market

Como is the center of Italian silk production and serves the world's top fashion houses. But competition from China and changes in the luxury market are shaking up the textiles industry.

A variety of silk from Como

Silk from Como is famous around the world

Walking through the northern Italian town of Como - about an hour's drive from Milan - it doesn't take long to see what the major industry is. Shop windows are filled with the vibrant hues - red, blue, green and orange - of some of the best silk the world has to offer. Silk companies in Como supply the world's top fashion houses.

"Today, Como is the city of silk - known all over the world," exclaimed Claudia Bartesaghi, a young tour guide at the Educational Silk Museum.

The city was a natural location for silk production for two reasons.

"The presence of mulberry trees, which are fundamental for silk worm breeding; the presence of water which is very important in many phases; and then the genius of the people living here combined the two aspects - water and leaves - and they saw that it could become their fortune," Bartesaghi explained.

Today, raw silk is imported from China, but the final stages of production are carried out in Como - from weaving, dyeing, designing and printing.

However, over the past two decades, the industry has been in steady decline as Italian silk-makers face increased competition from China.

View of Lake Como

Lake Como is a playground for the rich and famous

Prada vs H&M

Massimo Brunelli, the CEO of Mantero, one of Italy's largest silk production companies, said business isn't what it once was - and not just because of the recent financial crisis.

"The 90s were the most superb times in the history of the company. We are not even able to conceive of those accounts nowadays," Brunelli told Deutsche Welle at his apartment in central Milan.

"The company was very successful because it was capable of serving the fashion industry in times when fashion was becoming a mass phenomenon…The 80s and 90s made fashion a mass consumption good, and Mantero was in the position of benefitting from that boom."

Today, however, serving the luxury goods sector is less profitable.

"Today the real issue is not how successful is Louis Vuitton or Christian Dior or Prada. The real issue is - how successful is Zara? How successful is H&M?" said Brunelli.

"And even the Pradas of this world have been lowering their entry point, which means price has really become a competitive issue."

Brunelli said Italy still has the competitive edge over China when it comes to creativity, design and quality. And though the Italians have mostly stayed focused on the high-end market, Brunelli said his company is also looking at investing in other, cheaper fabrics and in retail brands.

Gucci and Louis Vuitton stores in Bologna

Massimo Brunelli says luxury brands may be losing their relevance

The end of luxury?

It remains unclear what effect the financial crisis will ultimately have on luxury products, such as Italian silk.

Angelo Manaresi, the director of ALMA, the luxury goods MBA program in Bologna, doesn't think there will be a significant impact.

"The reason why people buy luxury goods was there 100 years ago and it's going to be there in 500 years," Manaresi told Deutsche Welle.

"We see people that are so fond of a brand of watches that they don't even eat because they want to buy that brand of watches. So, I think that the luxury market is a very transnational market and it is going to be larger and very successful, because we are human beings and we like good products, we like style, and we like to differentiate from others."

However, Massimo Brunelli is not so certain.

"I believe that even if the luxury market will come back, it will not be the same as before," he explained.

"People are going to spend less… which means luxury with a capital 'L' is going to suffer."

An antique silk loom

Como's tradition of silk production spans centuries

Who will cultivate silkworms now?

The Italian silk industry faces further challenges as the price of raw silk recently reached its highest level in at least 15 years. The reason stems from a decline in production as Chinese farmers turn to other crops.

Cultivating silkworms is an arduous process that pays too little. In addition, rapid industrialization is eating up farmland in the silk-producing region around Shanghai.

On the stunning shores of Lake Como, it appears the centuries-old Italian silk industry is facing yet another period of transition.

Author: Vanessa Johnston
Editor: Sam Edmonds

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