Italy’s Fashion Players Back Russian Sanctions – WWD

MILAN — Milan Fashion Week kicked off just as Vladimir Putin ordered the attack on Ukraine, leaving the industry rattled by the news and the city a stage for several protests in support of the beleaguered country, also outside show venues.

Fake news started to circulate, such as a report that Italy had made a request for carve-outs on sanctions, including for luxury goods, which was firmly denied by an official tweet from Palazzo Chigi, the seat of the country’s Council of Ministers and the official residence of the country’s Prime Minister Mario Draghi.

“We represent all fashion brands and we have not done any kind of lobbying – the government will decide on the measures to take and we will abide by them and adapt to whatever restriction is decided upon,” said Carlo Capasa, president of the Camera della Moda. “At this moment, what is important is the life of people and peace. Actually, we hope that the message that fashion launches about peace, coexistence, inclusivity and social sustainability will make inroads.”

Just as the pandemic was all fashion week goers could talk about two years ago when it first hit Milan, the war was top of mind for everyone this season, culminating with Putin launching an atomic threat on Sunday, while the members of the EU were meeting to map out sanctions to hit Russia. Putin also agreed on Sunday to hold talks with Ukrainian President Volodymyr Zelensky on Monday on the border of Ukraine and the Russian satellite state Belarus, although battles continued to rage.

Zelensky said on Saturday Draghi had supported Russia’s disconnection from the global SWIFT payment system.

Giorgio Armani, for one, took a strong stance by deciding to hold his signature brand’s show on Sunday without a soundtrack “as a sign of respect for the unfolding tragedy,” it was announced as the lights dimmed on the runway.

“A few hours before the show, I thought what can I do for what’s happening around us?” wondered the designer at his Via Borgonuovo headquarters after the show.

“It’s not sending money or clothes, nothing like that. How could I express how my heart was beating for these children…” he began to say before tearing up. After a few moments, he resumed his comments by saying that he believed “the best thing is to give a signal that we are not happy, that we don’t want to celebrate because there is something around us that troubles us very much. So I told my team, ‘I don’t want any music.’ In the room, you could hear the absence of music, and backstage, it was more emotional than if any music, rap or rock had played.”

Before his MSGM show, Massimo Giorgetti also expressed how he pushed himself to focus on his work as the war raged. “We must go on,” he said, adding that, while social media was awash with comments, he also debated on ways to express his feelings.

“We were beginning to finally see some blue sky after the pandemic, with more people traveling, and now black clouds loom over the future,” said Nicolas Girotto, chief executive officer of Bally. “We are caught in a vortex and we are concerned for our team members who have relatives in the region.”

Russia is a small business for the Swiss brand, but the CEO shared his concerns for the repercussions on the economy. “We were not expecting this and it’s difficult to make any kind of forecast, but I see the restrictions and the sanctions lasting in time.”

Capasa said Italian exports to Russia represent a business of 1.2 billion euros on a total of 100 billion euros. “The weight of the country varies depending on the company and the effect of the sanctions will be asymmetric, hitting some brands more than others, but none of them has placed business ahead of humanitarian actions. We are sure that our government, with the European Union, will find the right way to cope with this. We have good business relationships with Ukraine and Russia and nobody wants the war, I can assure you,” he underscored.

While declining to provide any financial information about business in Russia as a leader of a public company, Gildo Zegna, chairman and CEO of the Zegna Group, echoed Capasa’s words. “I comply with the president’s stance. This will not be an easy situation but if we are united, we will come out of it, but it is premature to venture into any prediction.”

 

 

According to association Confindustria, Russia represented 2.7 percent of Italian exports in 2014, the year of the first sanctions for the annexing of Crimea. Today, exports to Russia involve more than 11,000 companies. The diminishing weight of the Russian market, as a consequence of those sanctions, hit several sectors, such as apparel, which represents 7.3 percent of the total, a 3.8 percent decrease compared to pre-2014. Leather goods now account for 4.6 percent of the total, down 1.7 percent.

Sanctions weakened the economic growth and the internal Russian demand and devalued the ruble. In terms of imports, around one-fifth of Italy’s gas and oil comes from Russia.

Confindustria stated that Russia has drawn 2.4 percent of Italian capital invested in the world, channeled in 442 local branches employing around 34,700 people and producing revenues of 7.4 billion euros, a 7.5 percent growth in the past six years. This surpasses the growth in the countries outside the European Union, up 2.2 percent in the same period, and in the U.S., up 5.2 percent.

Simona Clemenza, CEO of Aspesi, said Russia is not one of the main markets for the brand, which is stronger in Asia and Europe, but she is expecting an impact from the sanctions at a general level. “They are a price that we will all have to pay,” she said.

Like her peers, she said there are still uncertainties about the information circulating. Asked about the recent increase in the cost of energy and raw materials, Clemenza said the company has worked to “mitigate the effect through the optimization of certain industrial processes as to maintain Aspesi in the range of an alternative to luxury, but the effects will be felt on the current year.”

At the Budapest Select, showing at the Fashion Hub supported by the Camera Nazionale della Moda, asking to speak anonymously, a guest hailing from Hungary was especially concerned about the possible repercussions of the war. “Hungary is in the middle, between Russia and Ukraine and shares 100 kilometers of a common border, there are many Hungarians living in Ukraine,” she said, fearing Hungary could be the next to suffer an invasion, although the country’s prime minister has said the country will not send its army to fight in Ukraine.

“For the past two days, I’ve felt this pressure on my chest; we don’t know what will happen. We were almost out of COVID-19 and now this. In 2022, the war cannot be a solution. All businesses will be affected, the currency, and so on. We have many collaborations with the Russians, everyone is worried. But we care for the refugees we expect will be coming to Hungary and we are getting ready to welcome them.”

“This will be a European disaster for all its sectors,” said Olga Peredenko, a buyer for a fashion store in Kyiv. “Our sector will make no sense if this war does not stop soon, and the consequences will be felt for a very long time. The pre-collection orders will not be confirmed and the summer merchandise will be canceled, too,” she said, while obviously more concerned about the humanitarian crisis.

She explained that it was easier for Russia to annex Crimea because the region has long been a tourist area where former members of the USSR army lived or retired, while Ukraine has long resisted being part of Russia.

“Putin considers the dissolution of the USSR last century’s geopolitical catastrophe. He could be eyeing Moldova next.”

Asked if she was surprised by the many expressions of support for her country seen in Italy over the past few days, Peredenko said Italy has long been the home of many Ukrainians, whether employed as models or caregivers for the elderly, for example. She herself moved to Italy in 1994 and, after years as a model, started as a luxury buyer working with several countries, including Russia and Kazakhstan, for example, with about 80 clients. “This war is the opposite of common sense and is unacceptable. And it will have significant repercussions on the Italian economy if it is not stopped soon.”