| KN19015 |
| KEY NOTE Market Report : Hand Luggage and Leather Goods : April 2005 |
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| Executive Summary |
| 1. Market Definition |
| Report Coverage |
| MARKET SECTORS |
| Hand Luggage |
| Small Leather Goods |
| Handbags |
| Business Cases |
| MARKET TRENDs |
| Modern Travel |
| Animal Welfare |
| Product Design |
| Economic TRends |
| Gross Domestic Product |
| Table 1: UK Gross Domestic Product at Current and Annual Prices (£m), 1999-2003 |
| Inflation |
| Table 2: UK Rate of Inflation (%), 1999-2003 |
| Disposable Income |
| Table 3: Household Disposable Income per Capita (£), 1999-2003 |
| Population |
| Table 4: UK Resident Population Estimates by Sex (000), Mid-Years 1999-2003 |
| Unemployment |
| Table 5: Actual Number of Unemployed Persons (million), 1999-2003 |
| MARKET POSITION |
| The UK |
| Table 6: UK Household Expenditure on `Other Personal Effects' as a Part of Household Expenditure on `Personal Effects' at Current Prices (£m and %), 1999-2003 |
| Overseas |
| 2. Market Size |
| The Total Market |
| Retail Sales |
| Table 7: The UK Luggage and Leather Goods Market by Value at Current Prices (£m at rsp), 2000-2004 |
| Manufacturers' Sales |
| Table 8: UK Manufacturers' Sales of Luggage, Handbags and the Like, Saddlery and Harness by Value (£000 at msp), 2000-2003 |
| Table 9: UK Manufacturers' Sales of Luggage, Handbags and the Like by Product Sector (£000 at msp), 2002 and 2003 |
| By MARKET SECTOR |
| Table 10: The UK Luggage and Leather Goods Market by Sector by Value at Current Prices (£m at rsp), 2000-2004 |
| Hand Luggage |
| Small Leather Goods |
| Handbags |
| Business Cases |
| Overseas TRade |
| Table 11: Imports and Exports of Luggage and Leather Goods by Value (£000), 1999, 2001 and 2003 |
| Imports |
| Table 12: UK Imports of Hand Luggage and Leather Goods by Value (£000), 2003 |
| Imports from Within the EU |
| Handbags |
| Trunks, Suitcases, Business Cases, Satchels |
| Small Leather and Non-Leather Cases, Bags, Wallets, Pouches |
| Table 13: UK Imports of Small Leather and Non-Leather Cases, Bags, Wallets, Pouches by Principal EU Supplier by Value (£000), 2003 |
| Imports from Outside the EU |
| Handbags |
| Trunks, Suitcases, Business Cases, Satchels |
| Small Leather and Non-Leather Cases, Bags, Wallets, Pouches |
| Exports |
| Table 14: UK Exports of Hand Luggage and Leather Goods by Value (£000), 2003 |
| Exports to Countries Within the EU |
| Handbags |
| Trunks, Suitcases, Business Cases, Satchels |
| Small Leather and Non-Leather Cases, Bags, Wallets, Pouches |
| Exports to Countries Outside of the EU |
| Handbags |
| Trunks, Suitcases, Business Cases, Satchels |
| Small Leather and Non-Leather Cases, Bags, Wallets, Pouches |
| 3. Industry Background |
| RECENT HISTORY |
| Industry Synopsis |
| Table 15: Average Financial Performance of Leading Companies in the Manufacture of Luggage, Handbags and the Like, Saddlery and Harness Industry (£000 and %), Latest Financial Results |
| Number of Companies |
| Table 16: Analysis of UK VAT-Based Enterprises Engaged in the Leather Manufacturing Industry by Turnover Size, 2004 |
| Tanning and Dressing of Leather |
| Manufacture of Luggage, Handbags and the Like, Saddlery and Harnesses |
| Employment |
| Table 17: Number of UK VAT-Based Local Units Engaged in the Leather Manufacturing Industry by Employment Size per Unit, 2004 |
| Tanning and Dressing of Leather |
| Manufacture of Luggage, Handbags and the Like, Saddlery and Harnesses |
| Regional Variations in the Marketplace |
| Distribution |
| Table 18: Number of Outlets Involved in the Retail Sale of Footwear and Leather Goods, 1999-2003 |
| Specialist Stores |
| Department Stores |
| Multiples/Variety Stores |
| Home Shopping |
| HOW ROBUST IS THE MARKET? |
| Legislation |
| Key TRADE ASSOCIATIONS |
| Confederation of National Associations of Tanners and Dressers of the European Community |
| International Council of Hides, Skins and Leather Traders' Association |
| Society of Leather Technologists and Chemists |
| The BLC Leather Technology Centre Ltd |
| The British Luggage & Leathergoods Association |
| 4. Competitor Analysis |
| THE MARKETPLACE |
| MARKET LEADERS |
| Antler Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Carlton Travel Goods Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Dewhurst Dent PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| LVMH Fashion Group UK Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Mulberry Group PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Samsonite Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Shilton Holdings PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Outside Suppliers |
| Suppliers of Hides |
| Pittards PLC |
| Other Suppliers of Hides and Skins |
| Chemicals |
| Machinery |
| Training |
| MARKETING ACTIVITY |
| Main Media Advertising Expenditure |
| Table 19: Main Media Advertising Expenditure on Luggage and Leather Goods (£000), Years Ending 30th September 2003 and 2004 |
| Luggage |
| Table 20: Main Media Advertising Expenditure on Luggage (£000), Year Ending 30th September 2004 |
| Handbags |
| Table 21: Main Media Advertising Expenditure on Handbags, and Handbags and Shoes Combined (£000), Year Ending 30th September 2004 |
| Leather Goods |
| Table 22: Main Media Advertising Expenditure on Leather Goods (£000), Year Ending 30th September 2004 |
| Miscellaneous Clothing and Accessories |
| Table 23: Main Media Advertising Expenditure on Miscellaneous Clothing and Accessories (£000), Year Ending September 2004 |
| Recent Promotions |
| Jane Shilton |
| Samsonite |
| Tula Bags Ltd |
| Coopers of Stortford |
| Other Marketing Activities |
| Exhibitions |
| Moda UK |
| Spring and Autumn Fairs |
| Guangzhou International Footwear, Handbags and Leather Goods Fair |
| International Leather Week |
| Lineapelle |
| Mipel International Leathergoods Market |
| Luxury 2004: The Lure of Asia |
| International Leather Goods Fair |
| Fashion First |
| 5. Strengths, Weaknesses, Opportunities and Threats |
| STRENGTHS |
| WEAKNESSES |
| OPPORTUNITIES |
| THREATS |
| 6. Buying Behaviour |
| Consumer Penetration |
| Incidence of Ownership |
| Table 24: Purchasing Patterns for Luggage/Suitcases (% of adults buying in the previous 12 months), 2004 |
| Ownership of Luggage by Age |
| Table 25: Ownership of Luggage/Suitcases by Age (% of adults), 2004 |
| Ownership of Luggage by Social Grade and Income |
| Table 26: Ownership of Luggage/Suitcases by Social Grade (% of adults), 2004 |
| Ownership of Luggage by Region |
| Table 27: Ownership of Luggage/Suitcases by Region (% of adults), 2004 |
| Expenditure on Luggage/Suitcases |
| Table 28: Expenditure on Luggage/Suitcases (% of adults buying in the previous 12 months), 2002 and 2004 |
| Average Weekly Household Expenditure |
| 7. Current Issues |
| CLOSURES, MERGERS AND ACQUISITIONS |
| Allders |
| Carlton International PLC |
| Littlewoods and Index |
| BOARD AND SENIOR MANAGEMENT CHANGES |
| Antler Ltd |
| Gucci |
| LVMH Group |
| NEW PRODUCTS |
| Mulberry |
| Revelation |
| Sammies |
| Toile Trianon |
| FACTORS AFFECTING THE MARKET |
| Counterfeiting |
| Quotas |
| 8. The Global Market |
| Introduction |
| SUPPLY of Leather Goods |
| Italy |
| Germany |
| India and Pakistan |
| China and Hong Kong |
| Table 29: Exports of Leather Consumer Goods from Hong Kong by Category (% share by value), January-April 2000 and January-September 2004 |
| The US |
| DEMAND for Leather Goods |
| Asia |
| Europe |
| The US |
| Table 30: Value of Exports from China as Part of US Imports of Leather Goods by Product Category ($000 and %), 2003 |
| GLOBAL COMPETITORS |
| Braccialini |
| Coach Inc |
| Danier Leather Inc |
| Furla SpA |
| Lancel |
| Longchamp |
| Mazzini |
| The Leather Factory Inc |
| The LVMH Group |
| Table 31: LVMH Fashion and Leather Goods Division Sales by Geographic Region (%), 2003 |
| Tommy Hilfiger Corporation |
| VIP Industries Ltd |
| 9. Forecasts |
| Introduction |
| Gross Domestic Product |
| Table 32: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2004-2008 |
| Population |
| Table 33: Forecast UK Resident Population by Sex (000), 2004-2008 |
| Forecasts 2005 to 2009 |
| Table 34: The Forecast UK Hand Luggage and Leather Goods Market by Sector by Value at Current Prices (£m at rsp), 2005-2009 |
| Future TRends |
| Product Trends |
| The Future of the European Manufacturing Industry |
| Number of Holidays Taken |
| 10. Company Profiles |
| Antler LTD |
| Lvmh Fashion Group Uk LTD |
| Mulberry Group PLC |
| Samsonite Ltd |
| Shilton Holdings PLC |
| 11. Further Sources |
| Associations |
| General Sources |
| Government Publications |
| Other Sources |
| Bonnier Information Sources |
| The number of people employed in the tanning industry worldwide is estimated at well over 500,000 and those employed in the leather manufacturing sectors increase this number substantially. The textiles and leather sector, which also includes clothing and footwear production, had a combined turnover of more than _200bn in the EU (EU15) alone, prior to the joining of ten accessionary countries in May 2004. However, over the past decade, many jobs have been lost through modernisation and as a result of international competition from developing countries. The leather industry is now very much a global one with raw hides and skins, part-processed leather, finished leather and leather products widely imported and exported. Competition will only intensify with the abolition of import quotas that took place on 1st January 2005, leaving the enlarged EU industry facing an uncertain future. While the UK has traditionally had a trade deficit in luggage and leather goods, it is one that increases at an alarming rate. The value of UK exports has increased over the years, but not to the same rate as its imports. From 2001 to 2003, the trade deficit rose by a staggering 88.8% and this, of course, was before the removal of quotas. |
| An example of globalisation, the UK's leading luggage manufacturer, Carlton International PLC, was acquired in 2004, by one of Asia's leading luggage manufacturers, VIP Industries Ltd, part of the US DG Piramal Group. Carlton International's plant and machinery have been moved to India to increase output capability at VIP's facility in Nashik, while the new wholly-owned subsidiary of Carlton Travel Goods Ltd will market both the Carlton and VIP brands in Europe. |
| On the retail side, one of the market leaders is the LVMH Moët Hennessy-Louis Vuitton Group, which derives around a third of its turnover from sales of fashion and leather products. The company has ambitious plans for expansion in the UK. It currently has five standalone stores in Great Britain — three of them in London, a newly-opened one in Birmingham and one in Edinburgh — with further concession outlets in the UK and Dublin. Another competitor at the forefront of the UK retail market for luggage and leather goods is Mulberry PLC. The Somerset firm has suffered a torrid time over recent years, closing stores across the world and withdrawing from some major markets, including the US, but has recovered sufficiently to record its first pre-tax profit in 8 years in its half year ending 30th September 2004. |
| Key Note estimates that the value of the UK market for hand luggage and leather goods increased by just 1.1% from 2003 to 2004. It has already been noted that its principal threat is that of cheap imports, but the manufacturing industry also suffers from unreliable supplies of raw materials, particularly good quality local hides. In addition, it needs to invest heavily in complying with strict environmental standards. Suffering low profit margins, the value of UK manufacturers' sales of luggage, handbags and the like, saddlery and harness fell by 11.5% from 2002 to 2003 and, as is the case in most UK manufacturing industries, it must concentrate on the quality, design-led end of the market since it is unable to compete on price. Key Note forecasts that the hand luggage and leather goods market will increase by 5.5% between 2005 and 2009. |
Text © 2005Key Note
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Last updated by Amanda Porteous 2005
