This Sunday, a new edition of Micam starts in Milan, the largest shoe fair in the world, with more than a thousand exhibitors from 30 countries. Portugal is again present with a modest delegation of 36 brands, a far cry from the almost 100 it presented before the pandemic. At Mipel, the leather goods fair, there is only one Portuguese woman. Another 37 national exhibitors will be present at Lineapelle, the parts fair, from September 19 to 21. Three crucial events for a sector that exports more than 95% of its production and that will allow us to get an impression of what 2024 will look like.
It is already known that 2023 will be marked by a first semester in which exports were the highest ever – exceeding by 1% the values of 2022, the record year for the sector, which ultimately grew by 10% in volume and more than 20 % in value, exceeding the historic limit of two billion euros. But signs of slowdown increased and by the end of July sales abroad had already fallen by 9% in quantity and 1% in value.
For example, in the first seven months, the Portuguese industry exported 43 million pairs of shoes worth 1,171 million euros. But the average price per exported pair grew by almost 10% to 27.30 euros. And although orders are starting to become scarce, at least given the workload that factories faced in 2022, it is possible that the average price will continue to rise, especially as the industry will supply the shoes in the second half of the year, which was presented at the March fairs, and which is more expensive than the summer.
More inflation, less consumption
And it is precisely the winter season that causes the most concern, with inflation and the decline in consumer purchasing power dictating a decline in consumption by key customers. Exports to Germany fell by 2.5% in the first seven months of the year, corresponding to almost 7 million euros fewer sales to this country, the main destination market for Portuguese footwear. A total of 254 million euros worth of shoes went to Germany.
The French market is interesting, which was the main buyer of shoes for many years made in portugal, Until Germany takes this position during the pandemic, it is growing in the opposite direction: almost 239 million euros worth of shoes were exported to France, 5.2% more than in the same period last year, corresponding to an increase of almost 12 million euros .
On the other hand, the Netherlands falls by 1.6% to 180.2 million euros, Spain shrinks by 3.4% and remains at 81.8 million euros, and the United States is also in negative territory, with a year-on-year loss of 3.3% at 81.8 million euros. A total of 64 million euros. This means that the national industry in the three countries together has lost more than eight million euros this year compared to the same period in 2022.
Also notable is the behavior of the UK market, which has seen footwear worth almost €69 million since the start of the year, in line with last year’s performance.
In Milan, companies will now present next year’s summer collection, trying to collect the necessary orders to guarantee work in the factories for the last months of the year and especially early 2024. “This Micam is very important for us given the moment of uncertainty we are living in. It is true that we are in a negative year, from a macroeconomic perspective, but there are opportunities for 2024, with forecasts pointing to an economic recovery for our most important customers.” says Paulo Gonçalves, communications director at APICCAPS, the industry association. And that is why the fair will be ‘decisive’ in helping to understand the dynamics of international markets.
Orders come first
The latest industry survey, conducted at the end of the second quarter, shows signs of a slowdown in activity. “The majority of companies continue to believe that business is sufficient or good, but order books and production have declined and the upward trend in prices observed over the past two years appears to have come to an end,” you can you read the document, which also shows that “the inadequacy of orders from foreign customers is again at the forefront of the difficulties faced by companies in the sector, after two years in which this was the responsibility of supplying raw materials”. The shortage of qualified workers, which caused so much concern for companies last year, has faded into the background.
Interestingly, and despite this scenario of slowdown in activity, “the vast majority of companies have not changed the number of people they serve and references to financial problems have not increased”, APICCAPS points out, noting that “the percentage companies that say they will not change Because there were problems, there was even a slight increase.”
For the third quarter, manufacturers point to “the continuation of these trends, with a slight deterioration in the inadequacy of orders from foreign customers”.
Fortunato Frederico, founder of Kyaia, admits that there are expectations regarding the stock market and emphasizes that “very difficult” days lie ahead. “There is a lack of orders, the market is in recession. We all know the problems, especially in Europe, but we have to resist,” says the businessman, who seems concerned. “We’ve been through a lot of tough moments since we started in 1984, but I admit this could be the worst of them all. We’re going through a perfect storm, but the experience we’ve built up also helps.”
At Micam, for the first time
Despite the concerns and the small entourage, there is still room for newcomers at Micam. This is the case of the Fábrica de Calçado Penha in Guimarães, which, at the age of 56, decided to leave Milan to look for new customers and new markets. With 116 employees and a turnover of 4.6 million euros, Penha exports 99% of its production. produces for France, Sweden, Germany, but also for the US, Singapore and Australia. And contrary to expectations, 2023 is going very well and “above the best years”. With the French market consolidated, Armindo Novais says the arrival of the third generation of the family at the company was seen as the right time to invest in new markets. The instability of the situation and inflation of material prices “is a challenge”, he acknowledges.
The journalist traveled to Milan at the invitation of APICCAPS
Source: DN
