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Italy Market Insight: The Importance of Brand Selection
Let’s start as usual with the economic update: In the first quarter of 2025, Italy’s economy exhibited modest signs of recovery amid ongoing challenges. Projections indicate a GDP growth of approximately 0.3% for Q1 2025, an improvement from the 0.1% growth observed in Q4 2024. Despite this slight economic uptick, both business and consumer confidence experienced declines in March, but we have to keep in mind that Easter and all the business related to it will be postponed to April this year. The composite business confidence index fell to 93.3 from 94.7 in February, marking its lowest point since November 2024. Similarly, consumer confidence dropped significantly to 95.0 from 98.8, falling short of analyst expectations. Inflationary pressures have moderated, with the European Central Bank (ECB) implementing a quarter-point interest rate cut in March, bringing the benchmark deposit rate down to 2.5%. This move aims to stimulate economic activity amid trade uncertainties and a general slowdown. Also the cold weather during February & March with quite some heavy rainfall did not help to increase the Q1 boardsport sales in comparison to Q1 / 2024. On the fiscal front, Italy reduced its public deficit from 7.2% to 3.8% of GDP between 2023 and 2024 and plans to bring it down to 3.3% in 2025 through spending cuts and asset sales.
Looking ahead, the European Commission forecasts GDP growth of 1.0% in 2025 and 1.2% in 2026, supported by a still tight labour market and wage increases. However, the economic outlook remains fragile, with potential impacts from geopolitical tensions and trade policies. In summary, while Italy’s economy shows tentative signs of improvement in early 2025, challenges persist, necessitating careful monitoring of domestic and international developments.
On the boardsport side of the business, the snowboard hardgood sales were better than expected in Q4 2024, because of that the 2025 Q4 pre-books are looking quite promising for many brands. Outerwear struggled more and in general the smaller brands are struggling more than ever before as they face a lack of marketing budget and shops are playing safe with larger brands. The skateboard market is stable from a sales point of view but stock levels are still slightly high, but there is light at the end of the tunnel with 2025 being a possible turning point for hardgood sales, wheels especially are seeing good sell through in general. The streetwear market is still in a downturn, the target group of young teenagers and adults are wearing streetwear but it has become harder and harder for stores to attract them into the store to buy. Competition is huge from all the different types of stores and core streetwear stores are struggling to get back to their previous sales numbers.
Having a strong selection of desired and low quantity distributed brands is key to getting people in store, being too commercial or boring has resulted in the closing of many stores in 2024 and this trend is on going in 2025 with many streetwear stores and skate shops just hanging on. When talking to retailers most of them agree that the last two years have been the toughest of their careers and everyone is hoping for a much needed upturn starting with Q3/2025.
As Q2 2025 started retailers were feeling some upturn but in a very insecure market environment. The smaller stores in particular are still struggling with market demand
and trends which are changing faster than ever before whilst pre-booking deadlines are 6 to 8 months in advance. The timing from Mr. Trump couldn’t be worse.
By Franz Josef Hoeller