Italian production of prescription frames and sunglasses has continued to grow thanks to the good performance of export markets such as Germany, the U.S. and emerging countries, but the domestic market has shrunk drastically in the past five years. A full 90 percent of Italian production is currently used for export, but according to the Italian optical industry association, Anfao, the prospects of global growth are highly uncertain, particularly in the Eurozone.
These are Anfao's conclusions for the Italian eyewear industry in 2012, in a weak global economic environment. The value of eyewear within the fashion system weighs in at no more than 2.5 percent, yet eyewear contributes 11 percent to the Italian fashion system's commercial activity, thanks to the scope of its exports. The trade balance for Italy's eyewear industry is positive, at €1,777 million.
The value of Italy's exports increased by 7 percent last year, almost 5 percentage points more than the increase in volume of 2.5 percent. This implies that Italy's eyewear industry gained few new clients outside Italy, but sold them higher-quality, more expensive products. Italy exported 92 million pairs of glasses last year, including 61 million pairs of sunglasses and 31 million pairs of frames, and the latter grew by 7 percent in volume.
Almost everywhere, the demand for Italian-made prescription frames grew faster than it did for sunglasses. When times are tough, it is clear that a second pair of sunglasses becomes superfluous, but it's a different matter when it comes to a medical device.
Exports of prescription frames grew faster in 2012, up by 11.2 percent to €2,631 million, against 5 percent growth for sun eyewear to €1,723 million. Eyewear imports into Italy have also grown, rising by 5.7 percent to €855 million.
According to Anfao, Italy still has the leadership in the international trade in eyeglasses, whose value is estimated at €12 billion, with a share of 25 percent of worldwide exports, followed by China and Hong Kong. Italy leads the sunglass sector with a share of 30 percent, and has 22 percent of the market for frames.
Italy's production of eyewear increased by 5.3 percent in 2012 to €2,799 million, 50 percent more than nine years ago. The number of companies in the sector declined slightly to 888 in the last year, representing a drop of 2.5 percent compared with 2011; small and medium-sized companies have been the hardest hit. Nine years ago Italy had a total of 1,270 eyewear producers. Yet the workforce has actually grown slightly, to a total of 16,200, thanks to the performance and the actions of major players such as Luxottica.
The distribution of exports per geographical area shows Italy's strength in penetrating emerging markets, without losing out in its more traditional geographical areas. Europe continues to absorb half of Italy's eyewear exports, with growth of 4.9 percent divided between 8.4 percent for prescription eyewear and 2.9 percent sunglasses. In a general context of economic stagnation or slowdown in Europe, Germany and the U.K. put up good performances. Exports to Germany grew by 6.6 percent for sunglasses and by a huge 16.2 rate for frames. Export growth was at a stronger 15.7 percent rate in the U.K., a little more for sun eyewear sector for frames.
Sales to France managed a 2.8 percent increase, with stronger demand for frames, while sales to hard-hit Spain fell by 1.7 percent. Greece fell more drastically, however, by 11.8 percent, and Portugal by 3.6 percent, with frames suffering the most.
A full 29 percent of Italy's eyewear exports go to the Americas, where sales grew by 11.3 percent, with North America up by 10.7 percent. Central and South America grew by 13.4 percent, taking in 6.3 percent of Italy's eyewear exports. Asia's share came in at 18 percent of exports, following growth of 7.1 percent. Oceania is still a small customer, but even there, exports were up by 7.7 percent.
The U.S. – still Italy's No. 1 client – grew by 11.3 percent, with increases of 7.8 percent for frames and 12.7 percent for sunglasses.
Some of the results in the emerging countries were quite spectacular. China, for example, saw Italian eyewear exports increase by 61.6 percent, with a massive 122.4 percent increase for frames. Brazil grew by 28.5 percent, with a plus of 30 percent for the sunglass sector. Saudi Arabia was up by 29.6 percent, divided equally between prescription and sun eyewear. Chile grew by 89.2 percent, beating the increase in China with a 125.4 percent surge in frames. India was up by 23.2 percent, mainly in the sunglass sector.
After five years of negative growth, given the volume of eyewear it produces, Italy could barely avoid seeing its domestic market collapse still further. Since 2008, the industry's domestic sales have been shrinking at a rate of 5 to 6 percent a year, and in 2012 its sales to optical retail stores dropped by another 4.5 percent, down to a value of €963 million.
Sales of Italian eyewear by Italian opticians fell by 4 percent, penalizing sunglasses and contact lenses most heavily. Both categories lost more than 6 percentage points, while frames resisted. The trend was the same in terms of volume, with the sunglass sector suffering the most.