An Example Of China'S Fashion Capital: Italy Began To Control The Epidemic Situation By "Sealing The Country".

9 pm local time, the Prime Minister of Italy Kong Te announced that from 10 to the beginning of the year, "nationwide implementation of the closure of the city," Kong Te said, "in addition to the proven work, health and emergency needs of three special reasons, people across the country must not leave their location without permission." According to the emergency act, Italy currently prohibits all public gatherings, including weddings, funerals, religious and cultural activities. On Sunday local time, the Italy government decided to isolate the northern region and block cities such as Milan and Venice, which are the location of some luxury jewelry industries and suppliers. This has shocked the fashion industry.

According to the Broadcasting British Corporation (BBC), Italy has implemented unprecedented measures to prevent further spread of the new crown virus. Before this, the new crown pneumonia cases in Italy increased sharply. As of March 11th local time, 2313 new cases of new crown pneumonia were confirmed in Italy, totaling 12462 cases, 196 new deaths, 827 cumulative deaths, and 6 mortality. %. More than 1000 infected persons are being treated in intensive care units in Italy, of which 560 are concentrated in Lombardia, the most serious epidemic situation, including Italy, Milan, Venice, Parma and Modena.

The earliest blockade area is the birthplace of many luxury brands such as Prada, Armani and Versace. From Louis Vuitton to Stella McCartney, international brands need to rely on manufacturers and suppliers in Italy to make garments, accessories and shoes. Bernstein's calculations show that in the previous blockade area, about 60% of the textile and garment manufacturing capacity in Italy was concentrated, and 10% to 20% of leather products and about 20% of the jewelry production capacity. According to Bernstein analysis, the eyewear industry is basically unaffected.

In the former blockade area, the Venetian area in northeastern Italy is a manufacturing center, not only for textile fabrics suppliers like Diesel, but also for manufacturers of Luxottica glasses and Louis Vuitton shoes. In Lombardia, there is Yoox Net-a-Porter logistics center, which belongs to Richemont. It is the largest luxury electric supplier in the world. In the vicinity of Venice's Breton beach, there are about 520 shoe factories, with a total of 10 thousand employees (data from local tourism promotion alliance). About 20 million pairs of shoes are produced here, of which 90% are used for export.

It is too early to say what kind of impact isolation will have on factories, warehouses and offices. Although the government appealed to residents to stay at home as much as possible, the vast majority of workplaces were not closed. But analysts say the measure is likely to cause some unrest.

"The government feels very entangled. On the one hand, there is a need to prevent and control the epidemic. On the other hand, it wants to maintain the company's continued operation; the GDP (gross domestic product) in the region accounts for more than 1/3 of the country, "said Luca Solca, an analyst at Bernstein. "Major events may force the government to take action, even if it is not well prepared. As the epidemic continues to escalate, the implementation of strict control of the city may be inevitable."

Even if manufacturers continue to operate, it is expected that this will seriously restrict the economic activities of the whole country, and possibly plunge Italy into recession. The fashion industry has prepared itself for the sharp drop in the spread of the epidemic, because in the government segregated area, people usually do not go to public places such as shops. Luxury goods consumption has shrunk dramatically in parts of China that have been in the city for weeks, while Herm s, Tod 's, Burberry and Moncler also announced slowdown in those regional businesses.

As the new crown spread to the world, more and more brands, regardless of price, have lowered their expectations. According to the prediction of Italy Luxury Goods Association (Altagamma), Boston consulting company (BCG) and Bernstein, the valuation of Italy's luxury goods industry has fallen to 309 billion euros, reaching a 5 year low. This year, the industry may face 300 to 40 billion euros of sales loss.

"What worries most at present is not lack of output. The most important problem actually comes from the demand side, "luxury analyst Mario Ortelli points out. Consumers are "not in the best mood to squander luxury".

The major brands are also forced to adjust their product marketing strategies. With the outbreak of the epidemic, we need to avoid crowds. The traditional way of releasing new products and launching advertising blockbusters in the luxury industry is no longer applicable.

Affected by the epidemic, the recent Paris fashion week (Paris Fashion Week) canceled part of the big show and activities, and Gucci and Versace brands also canceled the upcoming holiday series show. The fashion week of Tokyo and Seoul has been cancelled or postponed. The world's largest watch exhibition, "Basel international watch and jewellery exhibition" (Baselworld), has also been postponed.

The new Italy edition of "Vanity Fair" focuses on the first outbreak of Milan in China to highlight all the public health emergencies. This issue will be distributed to readers in Lombardia free of charge.

Carlo Capasa, President of Camera Nazionale della Moda Italiana, Italy, said that extreme measures should be taken to control the epidemic and China's example. "Cities like Shanghai and Beijing are gradually returning to normal." He said.

The Italy state Fashion Association is discussing emergency relief measures with the government to help businesses overcome difficulties. These measures include extending the tax period, obtaining loans and repayment standards in accordance with specific circumstances.

Capasa predicts that there may be a delay in product delivery in the autumn, but there will be no large-scale supply chain disruption. He expects that many factories will continue to operate during this period, but the production capacity has weakened and the trade unions have adopted flexible working system.

"The epidemic is very serious," Capasa said. "We have to face up to this: [must] control the epidemic by mid April. Then take a look at it.