“The crisis began with a decline in exports. Then war, tariffs and the uncertain geopolitical situation further complicated matters. Italian fashion is now at risk.” Samuele Nacci, a Tuscan trade unionist with Uilm, leaves little room for interpretation when he talks about the Italian fashion industry, which has enchanted so many people around the world with its clothes and accessories.
For us to be sustainable, the tariffs should be equal to the loss in value of the dollar.
Italian fashion has a significant economic impact on the global economy. According to Italian ministry sources, Italy is the European leader in the fashion sector in terms of turnover, with 41 per cent of the total, or €81.2 billion ($94.7 billion), as well as in the number of companies operating — 56,422 out of 223,241 — equal to 25 per cent of the total — and in terms of employees, equivalent to 435,134, 24 per cent of the total.
But today it is in crisis. A crisis that arrived in 2022, the year that dictated the slowdown in post-Covid revenues. From then on, there was a succession of layoffs and economic contributions from the state to companies and workers through social safety nets.
According to Confindustria data, the textile, clothing, and leather goods sector saw a loss of €10 billion ($11.7 billion) between 2023 and 2024. ‘Although the supply chain has achieved a lot in terms of value, fewer items have been leaving our factories,’ Luca Sburlati, president of Confindustria Moda, explained to the press. ‘The data tells us that exports in the first months of 2025 are down 5 percent. We need to help companies, especially small and medium-sized enterprises.’
The province of Florence, like Tuscany, is the hub of the Italian fashion industry and the largest European artisan district, home to 14,573 small and medium-sized enterprises (SMEs), 98 percent of which have a turnover of less than €10 million ($11.7 million) and are largely involved in leather goods. Lombardy with 9,182 companies, Veneto (6,505), Campania (4,914) and Marche (4,320) are the other regions where fashion has the most influence in Italy and where we find small and medium-sized companies that work mainly as contractors for large brands.
Many large companies outsource the production of their items to artisan businesses, and in Tuscany alone, the fashion industry employs more than 110,000 people. According to data provided by the Regional Institute for Economic Planning in Tuscany, in 2024, job cuts for economic reasons increased by 46 percent compared to 2023. In total, there were 3,950 layoffs in the clothing, leather goods, footwear, textile, fashion metals and leather tanning sectors.
“In the company where I work in the province of Florence,” explains Simona, a factory worker, “we have gone from around 600 employees to less than half that number. We have numerous orders from Gucci and we know we have work until September, maybe October. Then we’ll see. Many companies have closed down and it’s a blow to the area.”
One of the epicentres of Tuscan and Italian leather goods and fashion is the municipality of Scandicci, a stone’s throw from Florence, described by the media as “the hub of Italian leather production.”
“Here we have Gucci, Prada, Balenciaga, Dior, Valentino, Berberi … all the big names are here,” explains Massimo Bollini, a trade unionist with the CGIL,
and many artisan companies work for them. But here, companies with 90 employees have closed down, and there are 283 companies that have social safety nets in place, affecting more than 7,000 workers. It’s an unprecedented situation. One-hundred and thirty companies have now closed down, and it’s chilling to walk through the streets of the industrial area and see the companies with their lights off.
While the mayor of Scandicci, Claudia Sereni, has held several meetings with the various sectors to try to find a solution, also inviting them to “rethink production models,” Claudio Di Caro, Tuscan secretary of the Uiltec trade union, warned that “the recovery will not happen this year and there will be a complete transformation of the system: until now, we produced to sell, but now we will have to sell to produce,” some contractors have anonymously reported to the television media that they make “bags with a list price of 1,300 euros, paid 35 euros,” “wallets worth 700 euros paid 20 euros,” or “clothes worth 60 euros resold in stores for 1,500 euros.”
This complaint was made in an attempt to explain one of the reasons why so many small and medium-sized enterprises linked to the fashion world — which are the leading exporters to the U.S., including €2.4 billion ($2.8 billion) worth of clothing and €2.7 billion ($3.2 billion) worth of leather goods — are suffering greatly.
In another region, Lombardy in May, a court had enforced “judicial administration” against Valentino Bags Labs, a company based in Rosate (Milan) and controlled by Valentino Spa, because it “facilitates illegal hiring practices in factories run by Chinese entrepreneurs, including in Italy.”
In the same month, another union, Sudd Cobas, reported a similar situation of exploitation involving contract workers employed by the Swiss multinational Montblanc in Campi Bisenzio, in the province of Florence. “Montblanc paid the contractor about €30 [$35] per bag” explains Luca Toscano of the union “This rate is symbolic of injustice and exploitation, with workers exploited for years, working 12 hours a day for the contractor to ‘cover costs.’”
At the beginning of July, the Filctem, Femca, and Uiltec unions unanimously called for greater controls in the supply chain, accountability of contractors, and ethical tracking of garments. “Some big Italian fashion brands shine on the catwalks and in their financial results, overshadowing the fundamental rights of workers,” the unions said in a joint statement. ‘The exploitation of people in the supply chain and subcontracting, which cyclically emerges from judicial investigations, is no longer tolerable.”
In an attempt to reverse the trend, on July 22, during the National Fashion Roundtable, where a solution to the crisis in the sector was sought and a sort of “rescue plan” yet to be defined was announced, the Minister for Enterprise and Made in Italy, Adolfo Urso, explained that “a regulation to certify the sustainability and legality of companies in the sector is being considered, with the aim of offering a structural solution that protects everyone.”
To make matters worse, in addition to the crisis in the manufacturing sector, there is also a crisis in the retail sector. In March 2025, the Italian Fashion Federation-Confcommercio, during its council meeting in Courmayer, gave alarming figures on this: in 2024, more than 6,000 shops closed down every day in Italy, or 18 per day. These closed shops are in addition to the more than 23,000 that had closed in previous years.
“Many Italians have reduced their consumption because of the economic crisis,“ explains Angela, who worked in a clothing store that closed in March, “and we held out for a while. Then Trump’s tariffs dealt the final blow.”
The potential tariffs effectively held a sector in check for months, which, in the province of Florence alone — Italy’s largest exporter — saw a 20 per cent drop in exports of leather goods, tanned leather, and dyed leather between 2024 and 2023, representing a loss of €600 million ($701.1 million).
“We are being hit by a “perfect storm,” observes Claudia Sequi, president of Assopellettieri, “wars, reduced consumer spending power, high energy costs, excessive labor costs and U.S. tariffs, a market that accounts for 12 per cent of our leather goods exports, almost 1.2 billion euros ($1.4 billion).
For us to be sustainable, the tariffs should be equal to the loss in value of the dollar. If you consider that handbags today have a 9 per cent tariff and the dollar has depreciated by 12-13 per cent, even if we reached zero, we would still be higher. Imagine if the tariffs were higher. There are no margins in Italy to absorb this price increase, which would then affect the final price of the product in the U.S. And at a time of uncertainty such as that currently being experienced in the American world, where spending power is also declining, tariffs are a major threat to the sector, which is already at risk.”
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