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How Italian Design Brands Are Handling The Devastating Effects Of Coronavirus

The ongoing coronavirus pandemic has ravaged countries all across the globe and has severely affected Italy. With a reported 168,941 confirmed cases and 22,170 deaths, Italy was the epicenter of the pandemic until it shifted to the U.S. in the second week of March. 

It was business as usual for the Italian design industry in Milan throughout the implemented initial lockdowns, until Prime Minister Giuseppe Conte announced on March 21 to cease operations of all non-essential businesses (including factories) until April 3. On April 10, the national lockdown ended up being extended until May 3.

Internationally-recognized Milan-based design companies such as Artemest, Wonderglass, and Poltrona Frau collectively concurred that the economic impacts of the virus largely depend on how immediately it can be contained and how fast the design industry’s normal operation can start again. Despite the uncertainty, these storied design brands remain firmly imperturbable.

They have withstood historic disasters like World War II, The Great Depression of 1929, and numerous recessions, including the economic downturn of the financial crisis in 2008. These brands are confident that they will ride out this storm. 

They have been proactive in dealing with the crisis, acknowledging that early action is the key to manage the problem. Here are the ways they handled their crisis management as soon as they learned about the first coronavirus outbreak reported in Italy.

The Italian design industry has been standing their ground amid the pandemic.

Production Delays

The head of marketing and communications of Molteni&C, Giulia Molteni, expressed that delays in production are to be expected. She also stated that clients are not inclined to receive the merchandise at the height of the outbreak. In addition, multiple brands mentioned that they intend to take advantage of Italy’s monthlong summer holiday to get up to speed with production delays. Italy and other Mediterranean countries usually close factories and offices in August, but it might not be the case this year as companies badly need to catch up with production. 

Smart Working Strategies 

Incorporating smart working strategies in the workplace assisted many brands to manage operations via digital work methods. Gabriele Salvatori, the third-generation CEO of design brand Salvatori, expressed how migrating their operations to the cloud has been extremely advantageous in times like this. These clever strategies allowed alternative ways of staff interaction that wouldn’t have been possible had they not adopted a digital approach into their systems.

On top of those, more advantages include the possibility of virtual meetings, remote order system management, and staff can even work from home. Now, companies have a new perspective on alternative work approaches and are using this experience as a trial period to observe if the staff can work from home effectively. 

Companies are trying out new working strategies.

Outlook on Sales

Orders from Asia, Europe, and North America have dropped significantly as panic emerged following the outbreak. The CEO of ceramics maker Mutina, Massimo Orsini, said that the gravity of the situation became apparent when American demand faltered, as 80% of their sales come from foreign markets. However, there have been changes in the current situation, according to Orsini. He said that European countries like Germany, France, and Spain have implemented restrictive measures similar to Italy while Asian markets have been slowly reopening.

Many companies are already looking at worst-case scenarios but the constant evolution of the situation makes it unrealistic to quantify possible loss at this stage. Nicola Coropulis of Italian furniture maker Poltrona Frau believes that the second quarter is the most critical period since it will be the time when Western countries are expected to experience the peak of the pandemic. On a positive note, Poltrona Frau has observed that its Chinese market has been slowly going back to normal after the reopening of its Shanghai flagship store in March.

According to a report by Architectural Digest, most of the Italian brands that they have spoken with are not panicking. Since Molteni&C is a furniture-making company, Giulia Molteni says that they are lucky that their products are considered long-term investments. She notes that their contract division hasn’t had cancellations yet. Molteni believes that people will still buy things for their homes. However, other industries like fashion may not have the same situation.

Digital Product Launch

The cancellation of Salone del Mobile furniture fair is one of the major effects felt by the design world. Brands are now looking at creating multiple digital platforms as an alternative to present new projects and are planning to live-stream their product launch. 

This crisis has urged brands to concentrate efforts on shifting towards a more digital type of business to generate sales and to preserve their market presence in the design industry. The indefinite closure of brick-and-mortar shops and the lasting effects of the crisis will alter consumer behavior and ultimately continue to press the industry further into e-commerce. 

With store closures in the country, brands are now focusing on e-commerce.

Moving Forward

As the closure of nonessential businesses will still be ongoing for a few weeks, it’s still too early to conclude the impact of the crisis in the economy. Unfortunately, Donghia, a longtime textile company, became the first major Italian brand to close its doors. During the company closures, financial institutions estimate that the country will lose 70 billion to 100 billion euros per month.

However, the Italian government put forward a stimulus package worth 25 billion euros for March and a reported similar package for April to support businesses. Marco Credendino of Artemest believes that this will help smaller brands get through the storm. The package includes withholding tax, pausing mortgage payments, and covering a portion of employees’ pay for some time.

In the middle of these uncertain and dire circumstances, the design community remains optimistic despite the worrying predictions of the fate of the Italian economy. These celebrated Italian design brands, whose roots are strong because of hard-working and passionate individuals, will continue to survive and weather yet another storm.

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