The news exploded like a bomb on the evening of March 7, a sunny pre-spring Saturday. Prime minister Giuseppe Conte officially confirmed during the night that the whole region of Lombardy – where more than 50% of Italy’s cosmetics are manufactured – and 14 northern provinces were to go under lockdown with immediate effect. The news came after two weeks of restrictive measures, including the closure of schools, universities, cinemas, gyms and museums, which had not been enough to slowdown the exponential spread of COVID-19. Two days later, the lockdown was extended to the whole country. And now?
The first consequence – after some panicky reactions – is an acute awareness of how serious the public health situation is. The message of the government’s communication campaign “Stay home, leave the virus outside” has hit home. The population has largely followed the new rules. This means that people are leaving home only to shop for food supplies. Sales in non-food retail have collapsed. An announcement by prime minister Conte on March 11 ordered the closure of all stores, except pharmacies, grocery stores and supermarkets.
However, even before this order to close stores, several retailers had already moved to shut their doors. Cosmetics retailer Kiko for example, announced the closure of 340 of its Italian stores until April 3. Department stores Coin and Rinascente have done the same. A few days before the order to close stores, Fabio Pampani, CEO of Douglas Italia, the number-one beauty retailer in Italy, told business newspaper Sole 24 Ore that in some stores, customer traffic had fallen 50% and that the increase in online sales had only very partially compensated the loss of sales in brick-and-mortar.
The Manufacturing Front
The financial consequences for retailers and brands will no doubt be devastating, especially for smaller companies. But what about the manufacturing front? Currently production sites are still operational, and workers are authorized to travel to reach their place of work. Renato Ancorotti, President of Ancorotti Cosmetics and President of the Cosmetics Association Cosmetica Italia, confirms that work goes on.
Talking to BW Confidential from his office in Crema, in the heart of the Italian Cosmetic Valley, which produces 65% of all make-up products sold in Europe and is an area that has been badly hit by COVID-19, he said: “I have talked to many colleagues. They are all at work, like courageous captains fighting against the tempest. We want to combine safety with business in the hope that the situation does not degenerate. We are trying to infuse [a sense of] serenity and reinforce hygiene measures and we are rigorously following the government’s recommendations. Our customers have not abandoned us – although from Spain I received an absurd requirement for a Virus-Free Certificate to apply to our products. We are tough; after these hard times, will come the renaissance of Made in Italy.”
This sentiment echoes that from ICR, which is based in Lodi, which employs 600 workers and produces perfumes for high-end brands. ICR member of the board and owner Ambra Martone explains: “To guarantee safety we have completely reorganized work on the production lines. We forecast a decline of 10% in our sales for the whole year, if hopefully all the measures taken by our government prove to be efficient.” However, she adds: “If ever the closure of production sites were to be announced, the economic loss would be much more important. But I believe that there is a scale of values and the priority has to be health and the protection of the more fragile members of the community.” This is a sentiment that is shared by the majority of Italians. Will it be the choice of other countries, which may be soon faced with a similar crisis?
BW Confidential is the Paris-based international business-to-business publication for the cosmetics and fragrance industry. BW Confidential provides the latest news, analysis and commentary on major issues in the global beauty market. For more news, commentary and analysis on the global beauty industry go to: www.bwconfidential.com