Leather goods industry collapses – schuhkurier
Sales in the manufacturing industry in the production of leather and leather goods (excluding leather clothing) collapsed in the first half of 2024. This was announced by the Federal Association of the Shoe and Leather Goods Industry HDS/L in the run-up to the ILM leather goods fair in Offenbach. According to this, total sales from January to June 2024 were around 220 million euros. Of this, around 99 million euros were generated domestically. For comparison: in the same period in 2023, total sales were 260 million euros and domestic sales were 117 million euros. This represents a decline in total sales and domestic sales of over 15 percent.
In contrast, both the number of employees and the number of companies recorded remained stable. In the manufacture of leather goods, around 2,800 people were employed in companies with more than 50 employees in the first half of 2024, similar to the previous year. The number of these companies remained constant at 21.
According to HDS/L, the falling sales figures and declines in imports and exports reflect the difficult overall economic situation. Most of the problems are of political origin: high energy prices, the further increase in bureaucracy and the uncertainty about new regulations are affecting companies and consumers alike. The leather goods industry expects that the announcements about reducing bureaucracy and reforms will finally be followed by action.
import
From January to June 2024, the total value of imports of leather goods (excluding leather clothing and shoes) amounted to 1.83 billion euros (-6%). Italy remained the most important European trading partner. The import value was 240 million euros. In 2023, it was still around 264 million euros in the same period – a decrease of around 9.1 percent compared to 2023. The most important importers from Asia are China, Vietnam and India. In detail: Leather goods worth around 782 million euros were imported from China from January to June 2024 – a decrease of around 3.3 percent.
export
In the first half of 2024, the total value of exports of leather goods (excluding leather clothing and shoes) was around 1.24 billion euros. In 2023, the value in the same period was 1.23 billion euros, which corresponds to a minimal slight increase of 0.81 percent. According to HDS/L, the figures show that German manufacturers are increasingly looking for opportunities abroad, where growth markets can still be found.
Germany’s most important trading partners for exports were by far Poland and France. Leather goods worth EUR 157 million were exported to Poland from January to June 2024 (+19%). Goods worth EUR 109 million were exported to France in 2024. This represents a decrease of 5.2 percent.
In the travel and briefcase segment, which statistically also includes school bags and backpacks, there was some movement in imports and exports. From January to June 2024, goods worth 1.7 billion euros were imported in this segment. In the same period in 2023, goods worth 1.8 billion euros were imported. This is a noticeable decline of almost 5.6 percent. The figure is characteristic of the lack of dynamism in consumption.
In terms of exports, the value of goods in the period January to June 2024 was around 1.1 billion euros, almost no difference compared to the same period last year.
Producer prices
The increase in producer prices for leather goods (excluding leather clothing and shoes) was quite moderate in the first half of 2023 and 2024. It was 0.45 percent in each case. Producer prices for travel and sports bags and backpacks also remained within the norm. In the first half of 2023, prices did not change at all, and from January to June 2024 they only rose by 0.53 percent.
Given the increased costs of materials and wages, producer prices should actually rise more sharply, argues the association. However, given the reluctance of consumers, higher prices can hardly be imposed on retailers.
Consumer prices
Suitcases and travel bags cost almost 4 percent more in June 2023 than in January 2023; in June 2024 they were even 0.37 percent cheaper than in January of this year. Briefcases became 2.85 percent more expensive in the first half of 2024 (2023: 0.67 percent), sports bags and backpacks became 2.33 percent cheaper from January to June 2024 (2023: plus 5.27 percent). Customer demand in this segment is apparently declining this year.
outlook
The leather goods industry is suffering from the difficult conditions, for example in trade, as well as the general nervousness in the face of numerous international crises. According to HDS/L, federal policy should respond to this with a bold growth policy. If there is any reason for optimism, then it is only based on the hope that travel activity will have increased again after the Corona years. This trend is likely to continue – airports and trains are certainly well utilized.
Opportunities on foreign markets are also playing an increasingly important role for brand manufacturers. However, this alone will not result in a comprehensive recovery in the second half of 2024. In addition, there are still no signs domestically that consumers’ reluctance to spend is ending.