The Portuguese Jewellery sector had just entered a trajectory of growth and international expansion, but the current situation of Covid-19 represents an obstacle to the aspirations of companies. The AORP (Portuguese Jewellery and Watchmaking Association) portrays a sector that was practically blocked due to the closure of assay offices and commercial establishments.
The survey, carried out on 88 companies, reveals an industry mainly composed of small and medium sized companies (81% have less than 10 employees), of a family nature, whose household depends largely – if not entirely – on the business. Of the sample surveyed, 80% of the companies closed down completely following the establishment of the State of Emergency in Portugal, with 65% revealing it being for an indefinite period.
The consequences are already starting to be felt. 58% of those surveyed predict an impact of 76% to 100% on sales and 19% place the damage between 51% and 75%. The main reasons for concern for these companies include the drop in sales volume, the temporary closure of assay offices – the only entity with legal power to certify jewellery products – and the closure of premises, as well as the closure of upstream and downstream distribution chains. Many are considering implementing lay-off measures, redundancies and even activity closure. It should also be noted that, given the cancellation of international trade fairs, companies are concerned about recovery in the medium-term.
Nuno Marinho, president of AORP, maintains that “obviously we understand the urgency of the plan to combat the spread of the new coronavirus and we are aligned with the institutions in safeguarding public health, but it is also imperative that we prevent irreversible economic damage. As a priority, we are aiming to reopen national assay offices to make transactions via e-commerce feasible, as well as the necessary booster on lay-off conditions, relieving companies of the cost of the worker’s salary and allowing for the inclusion of managing partners in this scheme, given that in many small and micro companies the managing partners are essentially the workers. On the other hand, it is essential that we guarantee small and micro companies, who have little experience and power to negotiate with the banks, the best conditions to access credit,”.
“The AORP is monitoring closely all developments of the Covid-19 situation, keeping companies informed and providing legal and financial advice. In addition, we are designing solutions together with partners and companies to create digital platforms for promotion and business, finding opportunities among the great threat that is expected for the world economy. More than ever we believe that the solution lies in collective strength and the ability for companies to unite.” he adds.
The Portuguese jewellery sector is composed of 4,300 companies, representing an annual turnover of 1,000 million euros, 10% of this corresponding to exports.
