Reuters: Italy less gold, it’s a battle over exports

Also impacting were soaring gold prices and high wages, which further inflated costs. Furthermore, sales of gold jewelery in Italy have plummeted due to the recession. “Demand for jewelery is one of the first to fall in a recession”, comments Licia Mattioli, president of Federorafi, and head of a goldsmith company in Turin. Sales of gold jewelry in Italy fell 15% in volume (to 4.8 tons) and 9% in value ($246 million) year-on-year in the second quarter, according to data from the World Gold Council.

Steven Tranquilli, director of the Italian federation of jewelery distributors, Federdettaglianti Orafi, estimates that retail gold jewelery sales in Italy have decreased by 20-25% in one year. And according to Federorafi, the sector’s total revenues in 2011 amounted to 6.3 billion euros, down 16% from 2007.

So now India and the US have overtaken Italy as exporters, at least in terms of volume. Added to this is the strong competition from countries with low processing costs, such as mainland China, Hong Kong and Thailand. Exports also suffer from high duties. Indian and Brazilian manufacturers pay low customs duties when exporting their jewelery to the EU. But in those countries there are brakes on imports. Furthermore, producers in India and the United States benefit from greater economies of scale compared to the fragmented nature of the Italian goldsmith sector, companies centered in Vicenza, Valenza, Arezzo and Bassano del Grappa, most of which are family-run with small artisan shops.

How does it come out? According to Reuters, there is a need to improve design skills and technology, as well as lower labor costs. Then there is the need to improve exports. Gold jewelery manufacturers gather three times a year, in January, May and September, for the VicenzaOro fairs in Vicenza, which attract hundreds of retail buyers from all over the world in search of the most interesting creations for their shops. And faced with the difficult challenges of the domestic market, Italian jewelery manufacturers are increasingly turning their attention towards rapidly growing markets. According to the latest data from VicenzaOro, the main destinations for Italian jewelery in the first quarter of 2012 were Switzerland (363 million euros, 22% of the total), the United Arab Emirates (237 million euros, equal 3%), and the United States (142 million euros, equal to 8.6%).

Design innovation and marketing are the keys to success. At the retail level, for example, Damiani recorded a strong increase. “There are foreign markets that are growing rapidly and in which our group sees great possibilities, such as China, where Damiani is already present with eight stores and will soon open another five, and the former Soviet republics, where a new boutique will be inaugurated soon in Moscow”, confirmed Guido Damiani, president and CEO of the homonymous group. In short, all is not lost, fortunately.