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Pitti Filati Mills Anticipate Slow Sales in '08

High-end yarn producers at Pitti Filati expected to face an unsettled year in the face of a possible U.S. recession, higher wool prices and euro-dollar exchange rate woes.

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FLORENCE — High-end yarn producers at Pitti Filati expected to face an unsettled year in the face of a possible U.S. recession, higher wool prices and euro-dollar exchange rate woes.

The spinners showed their spring and summer 2009 yarn collections at the trade fair, which ran Jan. 30 to Feb. 1 at the Fortezza da Basso here.

Many said the unstable outlook for 2008 ruled out profit gains, and preliminary figures for the Italian yarn industry in 2007 cast a further shadow on the year's prospects. According to Italian fashion and textile consortium SMI-ATI, sales dropped 1.8 percent to 3.36 billion euros, or $4.6 billion at average exchange, in 2007. The downturn came after a stable two-year period for the industry, though Italian yarn production has cumulatively dropped 35 percent since 2001.

Stefano Borsini, president of Igea, anticipated a tough year, but was holding out some hope for improvements.

"[This year] will be difficult but it could surprise us. Certainly profits will be greatly reduced," said Borsini, adding that, if the spinner had not delocalized five years ago, "we wouldn't exist today."

Silvio Botto Poala, director of Botto Poala, said, "We were satisfied with 2006 and 2007, but we don't know what 2008 will bring, most definitely a decrease in volume."

Poala added that because of the Australian wool crisis, the raw fiber had undergone a 50 percent price increase in the past year and a half. As a result, the Biella-based spinner was forced to raise the price of its spun wool 20 percent per kilo. The boost has led Botto Poala to include new wool blends as part of its collection, including a wool and silk blend and a wool and cotton blend, as well as an ultracompact pure cashmere yarn in hues inspired by flowers.

Wool yarn specialist Lanerossi had also shaped its collection around blends of wool, silk, cotton and cashmere, in stark primary colors of green, red and yellow. Eugenio Piscopio, product manager, said the mill had raised prices 20 percent and for this reason he was hopeful that 2008 sales would total last year's 100 million euros, or $137 million.
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