Romanias fashion production fell from EUR3.9bn in 2014 to EUR3.5bn (US$3.74bn) in 2019

Romania's fashion production fell from EUR3.9bn in 2014 to EUR3.5bn (US$3.74bn) in 2019

Hit hard by Covid-19 and short of government help, Romania's clothing manufacturers are pessimistic about their prospects. 

Textile and clothing companies in the Southeast European country fear it might take a long time to recover from the pandemic, after eight months of restricted business and falling incomes. 

The Employers' Federation of the Textiles, Clothing and Leather Industry (FEPAIUS – Federatia Patronala din Industria Usoara) says that with significant portions of production halted during Romania's initial lockdown from early March to mid-May last year, the industry has struggled to recover capacity. 

Indeed, it still lacks a third of export-oriented production, according to a FEPAIUS note. A significant proportion of workers in the Romanian clothing industry are only undertaking 20% of their usual workload, the federation says, while 40% were laid off. 

FEPAIUS's president, Mihai Pasculescu, adds that 40% of orders were lost last year, with an estimated 80% year-on-year drop in companies' turnover. Export orders from the important Italian market were especially poor, especially early in the year when Italy was hit hard by Covid-19. 

This also impeded work in Romania, whose clothing and textile companies source significant amounts of materials from Italian suppliers. With Chinese material shipments also halted or delayed, delivery times for finished products from Romanian manufacturers jumped from 30 to 45-50 days or more, increasing the risk of customers cancelling orders.

Bleak domestic market

"Our shops were closed for two months during the spring, when we were supposed to have the highest sales in the early season," says Dobra László, general director at Secuiana, a major clothing manufacturer, based in Covasna county, Transylvania. "When we reopened in mid-June, our sales dropped by 40-50% compared to last year; our foreign customers cut their orders by as much as 50%, which forced us to lay off 80 people." 

His company and others have benefitted from government unemployment benefits paid to laid-off workers and covering 41.5% of employee salary tax that is usually paid by businesses in Romania, he notes. But there has been "no special help for the textile industry" in terms of direct subsidies.

As a result, several export-focused factories in Vrancea county, north of Bucharest, one of Romania's textile manufacturing hubs, had to close temporarily as external orders reduced drastically, according to reports from Romanian industry publication Dialog Textil.

PPE lifeline

Many companies switched or redirected part of their production to making personal protective equipment (PPE) and face masks to survive. Secuiana was one. "We haven't had the possibility to make new investments for years now. Our only chance was taking on PPE and mask production, based on demand," László explains.

Clients switching their orders from clothes to PPE also helped Tricotton Junior, a Vrancea-based knitting manufacturer, to maintain production throughout the pandemic, according to owner Elena Stoica. 

Another textile and knitting brand Tanex, based in Bucharest and Prahova, that regularly supplies French fashion brands, also switched to PPE and stayed in operation.

Another beneficiary has been Romania's biggest nonwovens textile producer, Minet SA, in Vâlcea county. It has created a network of 52 smaller Romanian clothing and textile manufacturers who can make clothing and other equipment for medical staff, with around 10,000 workers producing this PPE.

"The only good part of this pandemic is that fashion brands, and more, are speeding up digitalisation, badly needed by Romanian e-commerce," notes Corina Cimpoca, founder of Bucharest-based market research company MKOR.

But, says László, "there's going to be a long way until we can recover. All our clients are stuck with a lot of merchandise from the last seasons, so some time needs to pass before stock rotation comes back to normal."