Leather Goods in the European Union - Market Survey

The market survey covers leather and travel goods sold by specialist retailers, department stores and other outlets, most of which also sell some garments like bells and gloves. Because the leather branch not only deals exclusively with leather, but also passes all sorts of products made from textiles, "artificials" – (plastic, nylon, vulcanised fibre) and paperboard, in increasingly larger proportions, these products are also included in this survey. Leather goods covered in this survey are:

Consumption
The European Union ranks among the leading markets for leather goods in the world. In 1997, EU demand for leather goods was roughly estimated to be around US$ 7,000 million. The EU leather goods market is dominated by 4 countries, which in 1997 together accounted for 62 per cent of the total EU retail sales: Germany (20%), France (16%), Italy (16%) and United Kingdom (10%). The EU leather industry fared badly in the recession in the mid-1990s, when the majority of goods manufactured of leather were regarded as non-essential luxury items.

A healthier economy combined with increased fashion consciousness and more variety in the design both of goods manufactured of leather and non-leather materials (nylon, fibre, and textiles) has given a strong impulse to this mature market. To keep up with the latest fashion trends, consumers often replaced leather goods even when this is not strictly necessary.

Demand for travelers' requisites (suitcases, travel bags, rucksacks and computer cases) has increased vigorously as more people travel on holiday or business. More women in business meant an increased demand for brief and document cases and other office-related cases. The overall demand for bags/cases/holders for computers, mobile phones and other kinds of office accessories has increased.

In 1997, Dutch consumers spent US$ 482 million, or around US8 32 per head on leather goods and luggage. This is an increase of 20 per cent in value compared to US$ 410 million in 1991. Between 1991 and 1997, the market share of women's handbags in leather decreased from 31 to 25 per cent of total leather goods sales. During that period, independent retailers broadened their range of products by selling more travel goods and by 1997 these occupied 33 per cent of the Dutch market for leather goods. In 1997, independent retailers and department stores each held one third of the Dutch market, while the remainder was shared by a growing number of other outlets (drug stores, fashion stores, supermarkets and shoe shops).

Production
In 1997, the total value of EU production, at factory prices, amounted to US$ 4,676 million. Italy accounted for more than 50 per cent of this total, of which handbags are the main items produced. Other large EU producers of leather goods are Germany, France and the United Kingdom. Since the late 1980s, there has been a continuous decrease in the EU's total output of leather goods. Particularly for high volume items (bags, travel goods, small leather goods), the production of leather goods has often been shifted to East European countries and Asia.

It is well known that some products, carrying the world's leading European brands or private brands of large retailers, are now produced (though not designed) under franchise or license in developing countries because of low labour costs. The EU leather goods industry has been threatened by enormous price competition large supplying countries like China, India and Pakistan.

As a consequence, the EU industry now concentrates on the production and marketing of high quality leather goods, which need excellent technological control, good design and an ability to set trends (in Italy and France) and to anticipate the needs of consumers. In 1997, the total sales value of Dutch production amounted to US$ 40 million, consisting mainly of women's handbags, small leather goods and a few fashion items like belts.

Imports
In 1997, the EU imparted more than 25 per cent of the total world imports of leather goods, or 520 thousand tonnes with a value of US$ 5,094 million. Germany, which imports almost one quarter of this total, is the largest EU market for leather goods: 120,115 tonnes, with a value of US$ 1,222 million in 1997. Germany is followed by France (18% of EU imports in 1997), the United Kingdom (17%), Italy (9%), The Netherlands (6%), Belgium (7%) and Spain (5%).

Almost all EU countries increased their imports of travel goods, especially in 1997, when there was strong demand for travel goods and other bags/cases/boxes made of textiles and plastic, which together account for the majority of EU imports. Between 1995 and 1997, most EU countries imported an increasing amount of briefcases, small leather goods, gloves and belts. A note has to be made with respect to the use and interpretation of the figures of gloves in this market survey. A large percentage (volume 91 per cent and value 62 per cent in 1997) of the gloves imported by the EU are protective gloves.

China is the major supplier to the EU with a total of US$ 2,164 million in 1997 - or almost half of the EU imports of all leather goods. Next to China, India, other EU countries, Hong Kong, Vietnam and the USA are important suppliers of leather goods.

More than half of the leather goods imported by The Netherlands is re-exported, mainly to other EU countries. In 1997, Dutch imports amounted to a total of US$ 330 million, or which 40 per cent came from Hong Kong, 24 per cent from China and 20 per cent from other EU countries (Belgium and Germany). The remainder was supplied by lndia, USA, Indonesia, Taiwan, Pakistan, Vietnam and Eastern

Exports
In 1997, the total value of the EU exports was US$ 4,369 million, of which 42 per cent went to other EU countries. Between 1995 and 1997, the total of EU exports grew by 12 per cent in value.

Italy and France are both major producers and are the largest exporters of leather goods in the EU. Other large exporting countries are Belgium, Germany and The Netherlands. Handbags form almost 40 per cent of the EU export value. Other important leather goods exported by the EU were: small leather goods, travel goods, suitcases and belts. Major destinations were other EU countries and Japan, USA and Hong Kong.

Being the fourth largest exporting country, The Netherlands exported 21,886 tonnes of leather goods in 1997, valued at US$ 220 million. Other EU countries purchased around 88 per cent of Dutch exports, mainly Germany (34%), Belgium (17%) and France (13%), of which the greatest part was suitcases, travel goods and briefcases.

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