| KN19013 |
| KEY NOTE HAND LUGGAGE AND LEATHER GOODS : AUGUST 2003 |
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This report covers: hand luggage, handbags, business cases, small
leather goods, trunks, satchells, wallets, purses, saddlery, harneses, tanning
and dressing of leather,
Companies covered
include: Antler, Carlton International, LVMH Fashion Group, Mulberry Group,
Samsonite, Shilton Holdings, William Hudson & Sons, Hides, Pittards, Bill
Amberg, Connolly,
| Executive Summary 1 |
| 1. Market Definition 9 |
| REPORT COVERAGE 9 |
| Market Sectors 9 |
| Hand Luggage 9 |
| Handbags 9 |
| Business Cases 9 |
| Small Leather Goods 9 |
| Market trends 10 |
| Decline in UK Leather Manufacturing 10 |
| Fluctuations in Passenger Air Travel Industry Affect Luxury and Travel Goods Market 10 |
| Reduced Consumer Spending Affects Luxury Goods Sales 10 |
| Quick-Response Retail Facilitates Sales, but Increases Competition 10 |
| Leather Industry Continues to Struggle to Balance Environmental Issues with Industry Needs 10 |
| Increasing EU Regulation of Chemicals Industry Puts Pressure on Leather Goods Industry 11 |
| Synthetic Leather 11 |
| Cheap Asian Imports Flood European Market 11 |
| ECONOMIC TRENDS 12 |
| Gross Domestic Product 12 |
| Table 1: Index of Growth in UK Gross Domestic Product at Current Prices (index 1995=100), 1997-2001 12 |
| Population 12 |
| Table 2: UK Resident Population by Sex (000 and percent), Mid-Years 1998-2002 13 |
| Inflation 13 |
| Table 3: UK Rate of Inflation ( percent), 1998-2002 13 |
| Unemployment 14 |
| Table 4: Unemployment Rate and Actual Number of Unemployed Persons ( percent and 000), 1998-2002 14 |
| Household Disposable Income 14 |
| Table 5: Household Disposable Income (£ and percent), 1998-2002 14 |
| Market Position 15 |
| The UK 15 |
| Overseas 15 |
| 2. Market Size 16 |
| The total market 16 |
| Table 6: The Total UK Hand Luggage and Leather Goods Market by Value at Current Prices (£m at rsp and percent), 1998-2002 16 |
| Table 7: The Total UK Hand Luggage and Leather Goods Market by Sector by Value at Current Prices (£m at rsp), 2002 17 |
| by market sector 17 |
| Hand Luggage 17 |
| Table 8: The Total UK Hand Luggage Sector by Value at Current Prices (£m at rsp and percent), 1998-2002 18 |
| Handbags 18 |
| Table 9: The Total UK Handbags Sector by Value at Current Prices (£m at rsp and percent), 1998-2002 18 |
| Business Cases 19 |
| Table 10: The Total UK Business Cases Sector by Value at Current Prices (£m at rsp and percent), 1998-2002 19 |
| Small Leather Goods 19 |
| Table 11: The Total UK Small Leather Goods Sector by Value at Current Prices (£m at rsp and percent), 1998-2002 20 |
| UK Manufacturers' Selling Prices 20 |
| Table 12: The Total UK Hand Luggage and Leather Goods Market by Sector by Value at Current Prices (£m at msp and percent), 1998-2002 21 |
| OVERSEAS TRADE 21 |
| Table 13: Imports and Exports of Hand Luggage and Leather Goods by Value (£000), 1998-2001 22 |
| trade with Countries Outside the EU 22 |
| Table 14: Imports and Exports of Hand Luggage and Leather Goods To and From Countries Outside the EU (£000), 2001 23 |
| Handbags 23 |
| Trunks, Suitcases, Business Cases, Satchels 23 |
| Small Leather and Non-Leather Wallets, Purses 23 |
| trade with Countries Within the EU 23 |
| Table 15: Imports and Exports of Hand Luggage and Leather Goods To and From Countries Within the EU (£000), 2001 24 |
| Handbags 24 |
| Trunks, Suitcases, Business Cases, Satchels 24 |
| Small Leather and Non-Leather Wallets, Purses 24 |
| 3. Industry Background 25 |
| RECENT HISTORY 25 |
| INDUSTRY SYNOPSIS 25 |
| Table 16: Average Financial Performance of Leading Companies in the Leather Industry (£000 and percent), 2001/2002 26 |
| Number of companies 26 |
| Table 17: Number of VAT-Based Enterprises Engaged in the Manufacture of Leather and Leather Products by Turnover Sizeband (£000 and number), 2003 27 |
| Tanning and Dressing of Leather 27 |
| Manufacture of Luggage, Handbags and the Like, Saddlery and Harnesses 27 |
| Employment 28 |
| Table 18: Number of VAT-Based Local Units Engaged in the Manufacture of Leather and Leather Products by Employment Sizeband (number), 2003 28 |
| Tanning and Dressing of Leather 29 |
| Manufacture of Luggage, Handbags and the Like, Saddlery and Harnesses 29 |
| Regional Variations In The Marketplace 29 |
| Table 19: Number of VAT-Based Local Units Engaged in the Manufacture of Leather and Leather Products by Region (number of employees), 2003 30 |
| Distribution 30 |
| Table 20: Number of Enterprises and Retail Sales of Footwear and Leather Goods by Value (number and £m), 1999-2001 31 |
| HOW ROBUST IS THE MARKET? 31 |
| LEGISLATION 32 |
| Europe 32 |
| The UK 32 |
| KEY TRADE ASSOCIATIONS 32 |
| BLC Leather Technology Centre 32 |
| British Luggage and Leathergoods Association 33 |
| Related Trade Associations 33 |
| 4. Competitor Analysis 34 |
| THE MARKETPLACE 34 |
| MARKET LEADERS 34 |
| Antler Ltd 34 |
| Company Structure 34 |
| Current and Future Developments 34 |
| Financial Results 34 |
| Carlton International PLC 35 |
| Company Structure 35 |
| Current and Future Developments 35 |
| Financial Results 35 |
| LVMH Fashion Group UK Ltd 35 |
| Company Structure 35 |
| Current and Future Developments 36 |
| Financial Results 36 |
| Mulberry Group PLC 36 |
| Company Structure 36 |
| Current and Future Developments 36 |
| Financial Results 37 |
| Samsonite Ltd 37 |
| Company Structure 37 |
| Current and Future Developments 37 |
| Financial Results 37 |
| Shilton Holdings PLC 37 |
| Company Structure 37 |
| Current and Future Developments 38 |
| Financial Results 38 |
| William Hudson & Sons (Wolverhampton) Ltd 38 |
| Company Structure 38 |
| Current and Future Developments 38 |
| Financial Results 38 |
| OUTSIDE SUPPLIERS 38 |
| Hides 38 |
| Pittards PLC 39 |
| Chemicals 39 |
| Machinery 40 |
| Training 40 |
| Repairs 40 |
| Table 21: Repair of Boots, Shoes and Other Articles of Leather by Number of Retail Outlets, 1999-2001 40 |
| Marketing Activity 41 |
| Table 22: Main Media Advertising Expenditure on Personal Accessories (£000), Years Ending December 2002 and March 2003 41 |
| Leather Goods 42 |
| Luggage 42 |
| Miscellaneous Clothing and Accessories 43 |
| Direct Marketing 43 |
| Exhibitions and trade Shows 43 |
| UK Trade Fairs 43 |
| Overseas Trade Fairs 43 |
| PUBLICATIONS 44 |
| Department of Trade and Industry Guide 44 |
| Leather International 44 |
| World Trades Publishing 44 |
| IDC 44 |
| 5. Strengths, Weaknesses, Opportunities and Threats 45 |
| STRENGTHS 45 |
| WEAKNESSES 45 |
| OPPORTUNITIES 46 |
| THREATS 46 |
| 6. Buying Behaviour 48 |
| CONSUMER PENETRATION 48 |
| Incidence of Ownership 48 |
| Table 23: Penetration of Luggage and Suitcases ( percent of adults), 2002 48 |
| Purchase of Travel Goods by Sex 48 |
| Table 24: Penetration of Luggage and Suitcases by Sex ( percent of adults), 2002 48 |
| Purchase of Travel Goods by Age 48 |
| Table 25: Penetration of Luggage and Suitcases by Age ( percent of adults), 2002 49 |
| Purchase of Travel Goods by Social Grade 49 |
| Table 26: Penetration of Luggage and Suitcases by Social Grade ( percent of adults), 2002 49 |
| Purchase of Travel Goods by Region 50 |
| Table 27: Penetration of Luggage and Suitcases by Region ( percent of adults), 2002 50 |
| Household Expenditure on Luggage and Suitcases 50 |
| Table 28: Consumer Expenditure on Luggage and Suitcases ( percent of adults ), 2000 and 2002 51 |
| Average Weekly Household Expenditure 51 |
| 7. Current Issues 52 |
| THE ROLE OF THE INTERNET 52 |
| ONLINE SHOPPING 52 |
| EUROPEAN/INTERNATIONAL MARKETS 53 |
| European Expansion 53 |
| The Political Scene 53 |
| PRODUCT DEVELOPMENT 53 |
| Bill Amberg 53 |
| Pittards PLC 54 |
| LVMH Fashion Group UK Ltd 54 |
| Samsonite Ltd 54 |
| Tumi 54 |
| MERGERS, CLOSURES AND ACQUISITIONS 54 |
| Connolly Ltd 54 |
| Together for Leather 54 |
| BOARD CHANGES 55 |
| Mulberry Group PLC 55 |
| LEGISLATIVE CHANGES 55 |
| Europe 55 |
| EU Chemical Policy 55 |
| Integrated Prevention and Control of Pollution in the EU 56 |
| EU Anti-Dumping Levy on Chinese Leather Goods Comes to an End 56 |
| Restrictions on Use of Azo-Dyes 57 |
| The UK 57 |
| Increasing Costs for Employers 57 |
| Fuel Levy 57 |
| Environment 57 |
| MATTERS OF CONCERN 58 |
| Travel Goods Market Affected by Decreasing Global Travel Flows 58 |
| Counterfeiting 58 |
| 8. The Global Market 59 |
| THE CHANGING SHAPE OF THE GLOBAL LEATHER AND LEATHER GOODS INDUSTRY 59 |
| INCREASE IN VALUE OF GLOBAL EXCHANGES 59 |
| ITALIAN LEATHER LEADS WORLD IN FASHION 59 |
| Major Trends 60 |
| The Future 60 |
| CHINA DOMINATES GLOBAL LEATHER INDUSTRY 61 |
| Market Size 61 |
| Major Trends 61 |
| The Future 61 |
| HONG KONG GROWS IN IMPORTANCE AS `FRONT DOOR' TO CHINA 62 |
| INDIAN LEATHER INDUSTRY SET TARGET 62 |
| Market Size 62 |
| Major Trends 62 |
| The Future 63 |
| GERMAN LEATHER INDUSTRY WITHSTANDS RECESSION WELL 63 |
| THE US REMAINS NO.1 MARKET FOR FINE LEATHER GOODS 64 |
| 9. Forecasts 65 |
| INTRODUCTION 65 |
| Forecasts 2003 to 2007 65 |
| Retail Selling Prices 65 |
| Table 29: The Total Forecast UK Hand Luggage and Leather Goods Market by Value at Current Prices (£m at rsp and percent), 2003-2007 65 |
| Manufacturers' Selling Prices 66 |
| Table 30: The Total Forecast UK Hand Luggage and Leather Goods Market by Sector by Value at Current Prices (£m at msp and percent), 2003-2007 66 |
| future trends 66 |
| Population Trends 66 |
| Household Income 67 |
| Travel 67 |
| Fall in Consumer Spending 67 |
| Brand Consciousness 67 |
| Globalisation of the Leather Industry 67 |
| Supply of Raw Materials 68 |
| Europe and the Euro 68 |
| 10. Company Profiles 69 |
| Antler Ltd 70 |
| Carlton International Plc 72 |
| Lvmh Fashion Group Uk Ltd 74 |
| Mulberry Group Plc 76 |
| Samsonite Ltd 78 |
| Shilton Holdings Plc 80 |
| 11. Further Sources 82 |
| General Sources 82 |
| Bonnier Information Sources 82 |
| Government Publications 83 |
| Key Note estimates that the value of the UK market for hand luggage and leather goods was £1.03bn in 2002. The industry experienced a period of uncertainty after the global impact of the events of 11th September. However, while market growth and consumer expenditure are demonstrating recovery, the UK manufacturing industry is still in decline. |
| This report discusses market trends of the hand luggage, business cases, handbags and small leather goods sectors. The past 5 years have seen significant change within these sectors of the industry, with handbag sales increasing at a greater rate than those for small leather goods and hand luggage. Hand luggage has a 37.2 percent share of the total market compared with 24 percent in 1998 and small leather goods has a 34.6 percent share, down from 58.4 percent in 1998. |
| A general global downturn in consumer spending, compounded by the slowing of the US and Japanese economies and anxieties over tensions in the Middle East, has had a significant impact on the luxury fine leather and travel goods market. In 2002/2003 fears of terrorism and the SARS (Severe Acute Respiratory Syndrome) crisis have had a negative impact on global travel flows; in particular, the important luxury goods consumers from Japan and Hong Kong are staying at home. At the same time, increasing competition from developing industries in Asia adds more pressure on UK manufacturers catering for the lower end of the market. |
| However, as the industry emerges from the aftermath of the events of 11th September, the foot-and-mouth disease in the UK and the war in Iraq, the future of the hand luggage and leather goods industry is increasingly promising for 2003 and 2004. |
| Market growth is expected to continue and, with renewed efforts from the British Luggage and Leathergoods Association (BLLA) to raise the global profile of UK leather, growth in the UK industry is becoming even more possible. |
Text © 2003 Key Note
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Last updated by Amanda Porteous July 2003
