Wednesday, July 24, 2024

Florence luxury leather companies with a deep history have been temporarily suspended due to the deterioration of the Chinese market

REUTERS

Florence, Italy, famous for its leather goods, is facing a crisis due to the sluggish Chinese market, a “big hand” in the luxury goods industry. More than 250 leather workshops in Florence have been temporarily shut down.

About 4,000 workers have lost their jobs and are living on unemployment benefits. These leather workshops have been producing high-end leather products at the request of luxury brands, but they have stopped working as orders are cut off.

Florence’s leather market feared that the loss of jobs could lead to a decline in product quality and reputation, which would be a fatal consequence. Analysts say that the global economic downturn has reduced the purchasing power of the middle and upper classes, the main consumer of luxury goods, and that the sluggish Chinese market has had a decisive impact.

China was a large luxury goods market, accounting for 30% of the global luxury goods market sales in 2021. However, the growth of the Chinese economy, which had been growing by double digits every year, slowed, affecting the Florentine leather industry as well.

Last year, China’s economic growth rate recorded 5.2%. There is a negative outlook that the growth rate will fall further this year. As a result, the Italian leather market will be even more disastrous.

JULIE KIM

US ASIA JOURNAL

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