After two bleak years, Italian fashion can see light at the end of the tunnel, yet new challenges are casting a shadow over the recovery—from the influx of low-cost Chinese fashion to the mainstream narrative that delegitimises the Made in Italy system. The president of Camera Nazionale della Moda Italiana, Carlo Capasa, outlined to FashionNetwork.com the solutions the association is exploring, as it works at a political level to support the sector through this transition.

FashionNetwork: Is the market in a recovery phase?
Carlo Capasa: As Bain’s latest report shows, the sector stabilised in the last quarter. We have hit rock bottom and now the only way is up. In two years, Italian fashion has lost €10 billion in revenue out of €100 billion. The blow has been severe. Not enough has been done—from legislation to support measures—to help companies.

FN: Is a new pact between brands and consumers emerging?
C.C: Chinese consumers reduced luxury purchases by 20 per cent and companies raised prices. It was the only immediate lever available to respond to declining volumes. In this way, brands maintained revenue levels despite the drop in units produced. The supply chain, on the other hand, suffered, losing 20 per cent. Now brands are trying to lower prices, while also introducing new products, new projects and new materials.

FN: What geographic areas will drive growth?
C.C: Indian consumers are not buying luxury in India; they are buying it abroad. Dubai has become the hub for the Middle East, and for African and Indian consumers. In Africa, growth is concentrated in a few hotspot locations; there is great potential in South America as well, if it stabilises; Mexico is already performing well; we are focusing heavily on Brazil, which could become another major market. In the U.S., there was a dip in sales when tariffs were introduced, but now the market has stabilised and we are returning to usual levels.

FN: Why is the creativity tax credit important?
C.C: Among the 13 proposals to the government for inclusion in the budget law, the top priority is the tax credit for design and aesthetic creation. It currently stands at 5 per cent and expires at the end of the year. We are asking for it to be extended for at least five years and raised to 10 per cent. High-end fashion is essentially produced in Italy. Our system stands out for its creativity: it is the designer who sets the trend; in other segments, marketing dominates and creativity serves it. We create dreams; others fulfil needs. Creativity also underpins the making of a fabric or even a button. The tax credit is a drop in the ocean, but it helps everyone in Italy who applies creativity to products, and thus the supply chain as a whole. Chinese manufacturers produce fairly well, but it is a standardised process; in Italy, design is applied research. Italian fashion costs more because creative processes are expensive. It is in times of crisis that we must not stop investing. If we block these processes, we become less relevant. The government has promised to include the measure in the budget law; until now there was no budgetary cover. The measure costs around €70 million. We have proposed using Industry 5.0 funds. We hope that the fashion roundtable will meet before the law is approved.

FN: What are your proposals against the invasion of ultra fast fashion?
C.C: Every year 4.5 billion parcels worth under €150 arrive in Europe. Of these, almost 1 billion enter Italy. They are untaxed, arrive by post and without controls. Ninety-two per cent come from China and from major platforms such as Shein and Temu. Together with the French, we have proposed taxing them, at €5 per parcel in the first year, rising to €10. A softer levy is being examined, of €2 per parcel, which would still generate significant revenue for the industry, estimated at about €900 million. At Ecofin, the levy was approved—a first victory—but it will only come into effect later (between 2026 and 2028, ed.). The issue is also cultural. We need to explain to those who buy these products that they are of very low quality, do not meet the basic rules and standards imposed on producers in our markets, are harmful to health and entail rampant labour exploitation. We want warning labels on parcels stating that they may be harmful to health. Misleading advertising must also be banned.

FN: What is the status of the anti-gangmaster law?
C.C: With the Prefecture and the Court of Milan, we have signed a supply-chain protocol to help brands work with suppliers certified by a third party, chosen by the state. Each company on the platform will have a seal of approval to be renewed annually. The law is being passed in the House, but it can be improved. We are not seeking a shield from criminal liability, but a 90-day consultation period during which the brand can determine how to cooperate in resolving any problem that may arise. Our brands and companies have no interest in losing face over 50 or 1,000 pieces made without following all the correct processes out of 30 million pieces produced. Today, however, the public prosecutor (PM) can order court-appointed administration, and brands cannot defend themselves. Administrative liability currently falls on the lead company (the brand, ed.), while the workshop bears criminal liability for the offence. The intermediary workshop—which by contract could not subcontract, yet did—comes out unscathed. A paradox. This is not the PM’s problem, but an issue with the current law, which needs to be rewritten.

FN: How extensive is irregular work in fashion today?
C.C: Out of 600,000 employees, there are 30,000 irregular workers, including those who have not paid social contributions for three months. So the truly irregular are about 15,000, only half of whom work at the high end. It is one thing to correct irregularities within the system; it is quite another to damage the industry’s image in the name of doing good. As in the recent case of Tod’s. It involves 53 irregular workers. We must ensure that there are none, but let’s not forget the more than 5,000 in good standing that the group employs!

FN: Why is training important?
C.C: If pockets of illegality emerge, it is also because there is a shortage of labour. Often the workers coming out of our Academies are not destined solely for our industry. We need to allow those who are retiring, at least for the first two years, to work a limited number of hours in the Academies to pass on their knowledge and savoir-faire to those who are starting out, without incurring pension-earnings cumulation penalties. These are invaluable assets of knowledge and experience that must not be lost.

FN: Where do wages stand in the industry?
C.C: Pay in Italy is too low. Wages must rise without this increasing the cost of labour, which is currently the highest in Europe. Fashion has an access problem; we are unattractive to young people at the start of their careers. A head patternmaker earns more than a J.P. Morgan researcher, but we need to ensure higher earnings for those starting out and across all intermediate levels.

FN: What is the social impact of fashion?
C.C: Fashion is too often discussed negatively, despite the social and economic impact of exemplary companies such as Prada and Cucinelli. To tell the story of Made in Italy better, we have requested funds from the government. Fashion contributes €25 billion to state coffers, on €100 billion in turnover. That is a gigantic impact in terms of fiscal contribution, image and values.

FN: How do you plan to foster consolidation in the supply chain?
C.C: We need to consolidate the supply chain so that small companies have a network and can share services. Companies with only a few workers (the national average is 4.5)—how can they modernise or digitise? Years ago we proposed digitising districts with Fnr funds, but the proposal was rejected. Today we have a regulation in the pipeline to encourage the entry of large companies into SMEs through minority partnerships (20 to 50 per cent of capital). Obviously under certain conditions, and preserving majority control for the founding entrepreneurs. Capital and expertise are needed to save small businesses that are now fighting for survival. In Italy we are specialists in losing industries, as has already happened with the automotive industry. Let’s work together; let’s try to have a cohesive voice that puts industry at the centre, keeping it above partisan politics. This is essential to preserve and safeguard our fashion industry.