D. Exterior is a clothing company in Italy owned by Nadia Zanola.
She started the company in 1997 based on a small business her parents started in 1952.
Zanola has 50 employees in the northern city of Brescia.
She worries about the future of her company. She has made a lot of clothes for people in Russia, but due to international economic restrictions, the shops that asked for the clothes cannot pay for them.
The restrictions, known as sanctions, began earlier this year because of the Russian invasion of Ukraine. They are designed to punish Russia for the war by making it more difficult to send money to other countries or receive goods.
But the sanctions also make it difficult for people like Zanola, who rely on sales in Russia, to do business. She has over $2 million worth of clothes that she made for Russian businesses, which she was not paid to do.
“If they can’t pay for it, I’ll get on my knees,” Zanola said. She called the situation “painful”.
The sanctions are hurting a number of companies in Italy that make expensive fabric goods leather, like clothes and shoes. Italy is the world’s largest producer of this type of high-priced product. The industry adds $101 billion to the Italian economy every year.
While Russian Customers Add just about 3 percent of that total, and each loss hurts the 80,000 small businesses that serve this market.
Fabio Pietrella is President of a Fashion Industrial trade group in Italy.
He said the loss of Russian customers takes away over 80 percent of the money small businesses make each year.
Areas in Italy such as Marche, Veneto, Umbria and Emilia-Romagna depend on orders from Russia.
“These are districts that connect them supply chain‘ Pietrella said. He noted that the closure of small producers will harm the “entire system that makes this country an economy powerhouse.”
Some of the most famous fashion companies in the world like Gucci, Versace and Armani are Italian. They are showing their men’s clothing line in Milan this week.
A number of Italian companies such as Diesel, Benetton and Armani still operate in Russia. Their names appear on a list compiled by Yale University economics professor Jeffrey Sonnenberg. He called these companies “stingy.” He noted that companies that continued to sell goods to Nazi Germany after the start of World War II would not be “celebrated.”
Sonnenberg said apparel companies are not able to circumvent the sanctions like the pharmaceutical or agricultural industries do.
Other clothing companies in France and Spain severed ties with Russia when the war began. LVMH is a French company that owns fashion brands Louis Vuitton, Christian Dior, Givenchy and Fendi. LVMH still pays its 3,500 Russian employees even though it no longer does business there.
Pietrella said he and the companies he works for are “extremely concerned about the aggression in Ukraine”. He said there was no way to defend Russia’s actions. But he added: “We have to think about our companies. ethics are one thing, the market another. Workers in a company are paid by the market, not by ethics.”
For those who say companies should find a new market for their products, that’s easier said than done.
“If there were another market, we would be there already,” said Pietrella.
It has taken many years for companies like Zanola’s D. Exterior to do business in Russia. It now accounts for 35 to 40 percent of the $22 million her company brings in each year. D. Exterior is also under additional financial pressure due to rising energy and material costs.
When Russia invaded Ukraine at the end of February, the company was already sending summer clothes on order and taking winter orders. But by March, Zanola’s customers in Russia were missing payments.
She said she was unlikely to get any money for the 4,000 spring and summer clothes she has in her possession. And a contract said she had to go ahead and start making some of the winter clothes. If she cannot send the winter items to Russia, she will lose at least $100,000.
She said Russian customers are good because they increase in value the extra work it takes to make beautiful dresses.
After working so hard to win the clients, she doesn’t want to give them up.
She said she hopes people will see the difference between Russian leader Vladimir Putin and the Russian people.
“Since Russia is not just Putin, one hopes that poor Russians will manage to pick themselves up,” she said.
I’m Dan Friedell.
Dan Friedell adapted this story for VOA Learning English based on reporting from The Associated Press.
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words in this story
leather – n. Animal skin that is used to make shoes, clothes, and other things
customer -n. a person paying for goods or services
supply chain – n. the systems and organization involved from making a product to delivering it to a buyer
powerhouse – adj. a group or organization that has a lot of power and influence
Fashion – n. (industry) the business of making and selling clothes
stingy – adj. having or showing a selfish desire to have more of something, especially more than is needed
ethics – n. the rules of behavior based on ideas of right and wrong
increase in value -v. to understand the worth or value of something or someone
