Italy has become the first European country to take steps to help its fashion industry build a stronger presence in Iran following the lifting of Western sanctions. The two countries signed an agreement on Wednesday during a two-day visit by Italian Prime Minister Matteo Renzi with a delegation of business leaders to increase trade between Italy and Iran and reinforce industrial cooperation, according to an agency report. The deal was signed by the National Textiles and Fashion Association Sistema Moda Italia (SMI), which represents a sector worth more than 52 billion euros ($59 billion) in revenues, and its Iranian counterpart the Tehran Garment Union (TGU).
It aims to cut red tape and make it easier for Italian companies to obtain the TGU licence required to operate in Iran. Some analysts estimate that Iran has more than 3 million high net worth individuals who are major and regular buyers of luxury goods. The sanctions on Iran over the past decade did not apply to cosmetics and many other consumer goods, but they made it difficult for European companies to own stores in Iran. Executives and consultants say setting up businesses in Iran is also no easy task due to a lack of appropriate retail infrastructure, high tariffs and banking restrictions. A lack of enforcement of international trademark protection agreements also means Iran is flooded with counterfeits. Italian firms appear to have adopted a more proactive attitude than their French luxury and fashion rivals. In February, Florence-based fashion house Roberto Cavalli opened its first shop in Iran after leather goods maker Piquadro and men’s shirt company Camicissima.
Versace is due to open a flagship boutique in Tehran soon, in franchise with a local commercial partner. In contrast, several French groups, including Chanel, Kering and LVMH have been adopting a “wait and see” attitude until the evolution of Iran’s international relations became clearer. Some French brands such as the family-controlled handbag maker Longchamp and crystal maker Lalique, are looking for distribution partners but have no plans to open boutiques.
