“The textile [and apparel] sector has not recovered to pre-Covid-19 levels. Many of the employees of the closed factories have not found another related job in the sector and were forced to re-qualify for other positions in other industries,” Diana Iliescu, a project director at Bucharest-based Lara Consulting, which advises companies on how to source European Union (EU) and Romanian government financing, told Just Style.

She added that no less than “750 factories in the textile industry have disappeared from statistics in Romania” since the start of the pandemic, and that industry workers continue to face low, halved or, indeed a complete lack of any salary.

Putting these numbers into context, Romania is now experiencing the tough fourth wave of Covid-19, with only one-third of the 19-million population being vaccinated according to tracking data. This is the second worst record in the EU, only better than its neighbour Bulgaria.

The poor performance by the country’s clothing industry was predicted in a letter to the government released in mid-2020, the national Federation of Employers of Textiles, Clothing and Leather (FEPAIUS – Federatia Patronala a Textilelor, Confectiilor si Pielariei), which warned of a drastic decrease or cancellation of orders from customers especially from Italy, with about 30% of Romania’s apparel and textile export capacity closing and the remaining 70% working at 20% capacity.

At the same time, imports of upstream supplies from China have become more expensive and take longer to reach the Romanian manufacturers, Iliescu explained. As a result, figures from the EU statistical office Eurostat showed that Romanian clothing production has fallen farther than all but three of the 27 EU members states, dropping by almost -27% in 2020 compared to 2019. Only three EU countries have been more severely impacted – Italy (-32.7%), Greece (-32%) and Spain (-26.9%) while the average clothing production for the EU block in 2020 has fallen by -24%.

Iliescu told Just Style that while the government of Romania has worked to break this decline, its measures “did not meet the textile [and clothing] industry’s need”. So far, the industry has benefited from government allowances for employees corresponding to 75% of the average gross earnings and the possibility to postpone the payment of local taxes and duties, as well as rent and utility payments by small and medium enterprises (SMEs), with parents being paid when they had to take time off for childcare. A new state aid scheme should be released this winter, said Iliescu, but she said different industries will be given additional subsidies depending on the importance to government, and “the textile industry is disadvantaged in comparison to other fields of activity,” warned the consultant.

Despite these struggles, some Romanian apparel manufacturers with retail interests have been fighting to expand direct sales by developing online stores, offering a wider range of clothes online to consumers and business buyers, said Iliescu. At the beginning of the pandemic, some Romanian manufacturers stayed afloat by shifting activity towards personal protective equipment (PPE), such as masks, but there were problems, with some manufacturers being discredited for offering products that were not compliant with medical standards. Iliescu warned that many Romanian manufacturers have struggled to widen and expand their product because they could not afford or source new technology required to develop new lines. She said: “So, even this hope died quickly for most entrepreneurs.”

By Just Style