ASSOPELLETTIERI Via Alberto Riva Villasanta, 3 - 20145 Milano (ITALY) +39.02.58451.1 [email protected]CODICE FISCALE: 80046650158 assopellettieri.com Promotore di The Italian leather goods industry 2019 Preliminary Results Sectoral report prepared by Centro Studi for
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The Italian leather goods industry 2019 Preliminary Results · The imported leather products KG. decreased by -7.6%; the quantity of goods made of other material (largely majority,
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ASSOPELLETTIERI Via Alberto Riva Villasanta, 3 - 20145 Milano (ITALY) +39.02.58451.1 [email protected] CODICE FISCALE: 80046650158 assopellettieri.com
Promotore di
The Italian leather goods industry
2019 Preliminary Results
Sectoral report prepared by Centro Studi
for
ASSOPELLETTIERI Via Alberto Riva Villasanta, 3 - 20145 Milano (ITALY) +39.02.58451.1 [email protected] CODICE FISCALE: 80046650158 assopelletieri.com
Promotore di
THE ITALIAN LEATHER GOODS INDUSTRY IN 2019
In the second half of the year, the favourable dynamics that had already emerged in the
previous months, were confirmed on foreign markets.
In an international macroeconomic context, where new difficulties were not lacking (the
USA protectionist winds of the trade war with Beijing, which has nearly achieved Europe,
and the slowdown of the most important economies, such as Germany and China)
alongside the continuation of pre-existing crisis (Russia in the first place) and in a climate
of general uncertainty, the Italian leather goods sector – considered as a whole – achieved
definitely positive results in 2019, driven once again by exports.
In a year largely characterized by the contraction of international trade and attenuation of
world growth, foreign sales of leather goods have reached new absolute records in value,
with a consequent significant consolidation of the trade surplus, showing a vitality
unfortunately unknown to the domestic market, recording reductions in household
expenditures.
In the first 10 months of the year, exports grew by +25.8% in value over the same period
of 2018, with a definitely limited increase in terms of value (+0.8%) and an increase of the
medium prices (+24.7%).
The very divergent trend between quantity and value reflects the increasingly fundamental
role played, within the sector dynamics, by the International Luxury Brands, as shown by
the figures relating to exports to Switzerland (traditional logistic-distribution platform for the
fashion world brands), even doubled in value (+102.6%). Net of the flow to this market,
sectorial exports would in fact increase by a modest +2.5% and slightly decrease in KG
(-0.3%).
Although there is no doubt about the relevance of the overall performance of the sector –
which 2019 proved to be the most dynamic among the sectors of the national fashion
textile accessory - a more deepen examination of the data allows us to highlight how this
growth hides the presence of “two speeds” inside the national product reality, whose
fabric is made up of a large number of very small companies (70% have no more than 5
employees) for many of which, the year just ended, has reserved results far from those
above mentioned double-figure averages. This is confirmed by the indications of numerous
operators, an also by the figure relating to birth-mortality company released by
Infocamere-Movimprese, which recorded a negative balance from January to December
2019 in the number of active leather goods companies equal to 120 units, between
crafts and industry, as well as the resumption of the use – with reference to the largest
aggregate of companies in the leather goods sector, to the wage integration tools - with
the authorised wage support hours (CIG), increased in 2019 by +28%, with increases in
both the ordinary component (+31%) than the extraordinary one (+40%).
Behind the overall considerable numbers linked to subcontracting for the brands, there is a
very uneven situation among the companies (artisan workshops, small – medium
ASSOPELLETTIERI Via Alberto Riva Villasanta, 3 - 20145 Milano (ITALY) +39.02.58451.1 [email protected] CODICE FISCALE: 80046650158 assopelletieri.com
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dimensions own branded companies or not working for luxury brands) which have
achieved, in 2019, less profitable or even negative results.
The Istat data on Italian leather goods and tanned leather exports also show that only
Tuscany, among the main export regions, has recorded significant growth. The detail of
the flows by destination and type of products allows to highlight further critical issues in
recent international demand, as well as to underline their most rewarding aspects.
Behind the aforementioned Switzerland – which has become, not only in terms of value
(where it holds 37.4% share of total exports) but also in terms of quantity, bypassing
Germany, the first country – we find France, another destination, tied, in part, to
subcontracting for the brands, which grew by 15.2% in value and + 8.3% in KG in the first
10 months of 2019.
France and Germany (where the cooling of the economy seems to have induced
distribution to greater prudence in purchases, causing –5.9% drop in quantity, compared
to substantial stability in value) have always been the main destination markets of the
Italian operators, which also in 2019 directed 60% of the exported quantities to the 27
partners of European Union (against a much more limited share in value, equal to 27%,
due to an average price of 72.60 euros per KG, four times less than that of goods sent to
Extra EU (298 euros / KG).
On the whole, the EU markets registered a hold, both in terms of KG (+0.6%) and value
(+1.4%) but with a move back in different countries: Spain, The Netherlands, Austria,
Romania and Poland, to mention the main ones, recorded in fact decreases both in value
and in volume, even if with different intensity.
On the other hand, the sales trends towards the United Kingdom is favourable, +3% in
value and +4.3% in KG, in a year characterized by the strong uncertainty linked to a
possible Brexit no deal.
Positive indications for the North American markets, where both Canada (+16.8% in
value and +3.3% in KG) and USA (+4.9% in value and +11.3% in quantity) are growing.
The American market, our third destination in value and fourth in volume is very important
and it’s for a long time under observation because we fear that tariff disputes with China,
which have recently eased, may also extend to trade with the EU.
Difficulties persist in Russia where, after the partial recovery of the two-year period 2016-
2017 and the abrupt interruption of 2018, you can find double-figure contractions in the
first 10 months of 2019 (-16.3% in value and –21.8% in KG), as happened for the
contiguous footwear sector. Equally penalizing performance affected also the other two
mains markets of the area, Ukraine and Kazakhstan (-8.5% and –7.3% in value,
respectively).
Fluctuating results in the Far East, which recorded an overall +4.1% increase in value,
accompanied however by a –3.2% drop in KG.
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South Korea reaffirms the favourable trend of recent years, recording a further double-
figure increase (+19% in value with +12% in volume) which made it the fourth destination
market in 2019, to the detriment of Hong Kong (-14.4% in value and even –26% in KG),
which international trade statistics still consider separately from China. Mainland China
grew by 11% in value (+5.3% in quantity).
If considered together, Mainland China and Hong Kong are confirmed at the second
destination market for Italian leather exports, despite a –4.2% decrease in value on
January / October 2018.
Japan, growing by 11.2% in value and +4.4% in KG, will certainly be able to offer the
Italian operators important new development opportunities even thanks to the partnership
agreement signed with the EU (which provides for a gradual but slow, liberalization).
Favourable trends also for Taiwan and for Thailand, which, thanks to increases in the
order of 10%, has become one of the top 25 destination markets.
On the other hand, there was a heavy decrease, around -30%, in exports to Singapore,
where the negative trend, which began in 2016 is going on.
It should be underlined that Far East markets are, among the main export destinations,
those which have (together with Switzerland) the highest average price per KG, far higher
than the average of the total Italian export.
Middle East markets are quite stable (-1.1% in value and +1.1% in KG globally), despite
the positive signs in the UAE, the main customer of the area.
The export analysis by material highlights significant increases in value of 21.7%, both
for leather goods products (which cover three quarters of the export national value) and for
those in substitute (+40.8%).
But the leather goods sector – typical of Made in Italy production – shows a little
contraction in quantity (-5.2%), with negative signs for bags (-4.8%) and small leather
goods (i.e. wallets, purses, key rings, cases),
dropped by -5.8% in KG.
The export of non-leather items is also consolidated in KG (+6.4%), with a +10.5% for
bags.
Import appears to be almost stable in quantities (+0.7% over the first 10 months of 2018),
with a +5% in value, as the low dynamism shown by the international market. The average
price per KG (+4.3%) stood at € 22.60, more than 7 times lower than the one of exports (€
162.24).
The imported leather products KG. decreased by -7.6%; the quantity of goods made of
other material (largely majority, since they cover almost 90% of the volumes entering Italy)
increased of 2% (but with +23.5% for bags). Both leather and substitute products
increased of around 5% in value.
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Goods arriving from China (first supplier with a share of more than 60% of the total
quantity) increased by a 6.6% in quantity and 4.2% in value. Significant increase for
Vietnam (+ 22% in KG, +39% in value). The average prices of products coming from these
two countries are the lowest among those of the main suppliers (10.06 and 7.79 euro/KG,
respectively).
Considerable growth for imports from France and Switzerland; important reduction for
flows arriving from Romania and Spain.
Thanks to the strong increase in exports, the trade balance has recorded a substantial
strengthening in the first 10 months (+39%), reaching 5.8 billion euros and exceeding the
assets made in the whole 2018 (5.05 billion). Thanks to this result, chapter “42” of the
leather goods sector confirmed the fifth place in terms of credit balance among the 99
commodity chapters that make up the customs nomenclature, guaranteeing a fundamental
contribution to the Italian balance payments.
No news on the domestic front: in 2019 recorded a further contraction (-2.6%) in quantity
and – 1.7% in expenditure, according to Sita Ricerca), confirming the unfavourable trend
of recent years. These figures become even more penalizing, considering the umbrellas
(down more than 5% because of the mild climate of the beginning of the year ).
After a third quarter with weakly positive signs, the last part of the year highlighted new
declines, excluding a cycle reversal.
Negative trends for handbags, -5.6% in volume and -3.8% in value, by far the most
purchased items (they cover more than half of the total expenditure), as well as for belts
(-5.5% in the number of pieces and -3.8% in value). More content decrease for wallets
(-2.1% quantity). Backpacks are recovering compared to 2018; good for suitcases and
trolley.
Regarding the trend by purchase channel, although the annual final date are not yet
available, according to the first elaborations, the indications already highlighted in the first
half of the year, which showed significant drops in the traditional retail, department stores
and itinerant trade but a further growth for e-commerce, should be confirmed.
Milan, February 11th, 2020
Statistical attachments enclosed below.
ITALIAN LEATHER GOODS COMMERCIAL EXCHANGE
FIRST 10 MONTHS 2019
EXPORTSPeriod: January-October
Value
(Millions of €)
Quantity
(Millions of KG)
Average Price
€/KG
Year 2018 6,810.04 52.4 130.08
Year 2019 8,564.33 52.8 162.24
% var 25.8% 0.8% 24.7%
IMPORTSPeriod: January-October
Value
(Millions of €)
Quantity
(Millions of KG)
Average Price
€/KG
Year 2018 2,653.34 122.5 21.67
Year 2019 2,786.34 123.3 22.60
% var 5.0% 0.7% 4.3%
TRADE BALANCEPeriod: January-October
Value
(Millions of €)
Year 2018 4,156.70
Year 2019 5,777.99
% var 39.0%
Source: Confindustria Moda research center on ISTAT data
EXPORTS
Value
(Millions of €)
Quantity
(Millions of KG)
Average
Price €/KG
val kg a.p.
Total Exports 8,564.33 52.8 162.24 25.8% 0.8% 24.7%
of which towards:
Switzerland 3,202.55 6.8 471.82 102.6% 8.9% 86.0%
Others 5,361.78 46.0 116.56 2.5% -0.3% 2.8%
Source: Confindustria Moda research center on ISTAT data
Historical series of the first 10 months of years 2008-2019, value and quantity (KG)
ITALIAN LEATHER GOODS EXPORTS, FIRST 10 MONTHS 2019: SHARE OF SWITZERLAND ON TOTAL