This post was originally published on Forbes.com.
Back in January, before the rest of the world started taking COVID-19 seriously, Alessandro Barberis Canonico had already felt the storm coming with many clients from China, South Korea, and Japan cancelling or postponing their orders. As infection cases rose in Italy, his company, Vitale Barberis Canonico, an iconic fabric mill located in the northern part of the Biella region, followed the government’s recommendations and closed down its factories. This was one of the rare occasions in the company’s 350 years of existence where workers were sent home and all activity was stopped.
As an immediate response to the health crisis, global lockdowns, and the economic downturn many fashion brands postponed launching new collections and outright cancelled orders from suppliers. For Vitale Barberis Canonico that resulted in a loss of nearly 40-50% of all their orders. This story repeats itself all over the industry and according to research by Bain & Company, the luxury fashion market is expected to contract by 25-30% by the end of the year.
The company is one of the thousands of artisan and fashion manufacturers spread all over the Italian countryside who helped put “Made in Italy” on the world map as a symbol of high quality and luxury fashion. Today, the future of this industry and the livelihood of many of its workers is threatened.
In preparation for the government restrictions being eased in late April, the company had ordered more than 3,000 masks for their 450 or so employees and instituted distancing rules to ensure that working conditions would remain safe. Now, with production being ready to resume at near full capacity and some European and Asian countries showing early signs of recovery, Alessandro told me he is “cautiously optimistic” about seeing a sunrise after the storm.
Unfortunately it might take longer for Vitale Barberis Canonico and other manufacturers to get to pre-pandemic levels than hoped. Many companies are hesitant to make any positive predictions with a potential second wave of the pandemic still looming on the horizon. At the same time special events like weddings and large gatherings, that have traditionally been a driver of summer revenues, are still largely limited or postponed. Alessandro also expressed concerns about the United States, one of their key markets, where the health crisis is far from under control and an economic recovery seems unlikely in the near future.
The plight of Italian fashion manufacturers is not just a local issue. It could have big implications for the global market with more than 40% of global luxury goods being produced in Italy, according to McKinsey. Faced with the increasing danger of losing artisans and craftsmen, the fashion industry is coming together to save struggling businesses. Famous luxury brand Gucci has recently announced a partnership with Italian banking group Intesa Sanpaolo, with the goal of directly helping manufactures with cash flow problems. Struggling manufacturers can apply for a range of loan programmes and financial tools to help them weather the crisis and smooth out supply chain shocks.
Some initiatives include introducing digital and technological solutions – for example, shifting operations online. While e-commerce is being embraced by many retail companies, the digital transformation can be more challenging for manufacturers. Alessandro mentioned that together with other textile companies they’re looking into building a digital platform for buyers and manufacturers to visualise their products and make decision making faster.
Other initiatives are focused on trying to energise the demand. For example, Milano Unica, an international textile fair held in Milan twice a year, is now offering special discounts in hopes of attracting buyers to its showcase of leading Italian textile producers.
While the focus is currently on restarting the economy and saving the industry, this might be the right time to reconsider the fundamental principles that it is built on.
It is no secret that fashion has a sustainability problem – poor labor practices, excessive waste, heavy pollution – and accounts for 10% of global carbon emissions. In our eagerness to address these issues, it can be easy to overlook potential solutions that have been around for a long time and instead only focus on technological innovation. But perhaps local communities of artisans and craftsmen can serve as inspiration for the rest of the industry. That is why I found it important to highlight a company like Vitale Barberis Canonico, that was founded more than three centuries ago with sustainable principles in mind.
Because the company started as a small family-run business, being cost-effective and considerate of resources were guiding principles. Great care was taken to limit the amount of water used, to reduce the waste of natural fabrics, or to reclaim waste energy in manufacturing processes. For example, last year the company introduced a new sustainable fabric range with reduced environmental impact. Back in 2015 they launched the SustainaWOOL Integrity Scheme to promote the supply of sustainable raw materials. According to the most recent CSR report, 100% of their electric energy was bought from certified renewable sources. The company has also introduced a range of improvements in the automated dyeing system to reduce energy consumption and increase reuse of the contents of the dyeing tanks.
Catering to the luxury fashion market meant prioritising quality and finding ways of maintaining it for decades. The key to ensuring such a high standard of products is the ability to trace resources to their origin - something that remains one of the hardest problems to solve in modern day supply chains.
Any conversation about sustainability cannot leave out a discussion about labor practices and the fair treatment of workers. Vitale Barberis Canonico has been a part of the local community for centuries and some of their employees come from families that have been with the company for 14 generations. When people work together and live in the same community for generations, treating workers fairly is imperative to the company’s success and survival. The company’s welfare benefits include supplementary health insurance, as well as wage protection in case of serious or long-term illness. It has also run several community programs like apprenticeship, educational initiatives, events and offers a special benefits card in partnership with 120 local businesses. The company has stood by these principles even through the current unprecedented crisis and not a single employee has been laid off or furloughed.
With an economic crisis under way and catastrophic climate coming further down the road, building fashion businesses with sustainability in mind is the only acceptable way forward. Francesca Venturi, founder of Elevate, echoes this sentiment. Her company serves as a PR consultancy for fashion brands in Europe and The Middle East and through her work she stays up to date on current trends in the industry. When discussing the topic of sustainability, she told me, “Consumers are becoming more cautious and considerate of sustainability. Where products came from, who they are made by, how they’re produced. Ignoring this is simply not an option for any business in the long term.”
Despite today’s difficult circumstances and an unclear future, the fashion industry has been given an opportunity to remake itself and start functioning in a better way. Perhaps we don’t need to reinvent the wheel and only look to technology for all the solutions but can instead turn to ways of doing things that have stood the test of time. The recipe for a better future could be built on coexistence with local communities, fairer labor practices, and sustainable production methods. Because we can no longer afford exponential growth, we must revisit our presumptions and start producing fashion in a way that is considerate of the environment and the people making it. There is no better time to reboot the industry than right now.