Write 5 page essay on the topic Financial strengths and weaknesses of fashion design enterprises in Italy.

China entered the market shyly, a small nibble at the market but grew into a solid business. China flooded Europe with low cost shirts, pants, underwear, socks and shoes. But how can Chinese manufacturers of low cost product threat high fashion of Italy?

Ultra-cheap clothes, welcomed by consumers and retailers, undermine the fashion manufacturers, already challenged by the arrival of fast-fashion chains such as H&M and Zara, whose products are often made in the Far East. As Li Edelkoort, the respected fashion forecaster, warns, the Chinese whirlwind will flatten the fashion world as we know it and change radically its familiar landscape. “Everyone is putting eggs in one basket – China – and that is potentially devastating for our cultural heritage.” (Menkes 2005)

While producers are struggling to keep underpriced clothes from flooding the Italian market, designer label brands are waging another battle – against imitations, or “knockoffs” as they are known in the trade. (Italian designers 2005) Most of fakes come China or other Asian countries with the low labor costs and no concern for social services, welfare and pollution control.

Chinese products are dirty cheap. They underestimate the products to the level of prices for food. Some do not see a tragedy in this situation. What Italian companies need is to be flexible, creative, innovative. Their weapons are know-how and deeply felt luxury.

Another opportunity which Italian companies can employ to their benefit is the size of the companies.

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