After the effects of the Covid-19 pandemic had caused German leather goods and suitcase manufacturers to struggle in the past two years, the industry is now facing additional serious challenges: The Russian invasion of Ukraine “did the risks and uncertainties increase dramatically “, explained the Federal Association of the Shoe and Leather Goods Industry e. V. (HDS/L) on Saturday in a statement. Despite the foreseeable economic effects, the German leather goods industry is “ready to support the measures taken, including further sanctions,” emphasized the industry organization.
The industry association HDS/L expects higher raw material prices, delivery problems and the loss of sales markets in Eastern Europe
The association expects the Russian attack on Ukraine to have a variety of negative consequences for local leather goods and suitcase manufacturers. In addition to the “suddenly increased” raw material prices, the war is also having a negative impact on supplies. “Until before the Russian invasion, there were signs of a stabilization in logistics costs, as transport costs from the Far East stagnated in some cases. The invasion is creating numerous new additional problems in the supply chains,” the HDS/L explained. The overland route from Asia is now “no longer an alternative”, there are rather “detours and restrictions in air and sea freight traffic”.
In addition, according to the association, many industry companies are already specifically affected: “Some have production facilities in Ukraine and are primarily concerned about their employees, but also about the completion and ability to deliver of the goods,” the organization explained. “The restrictions on payment transactions can lead to payment defaults. The markets in Russia and the neighboring countries will initially fail as a sales market for German industry for the foreseeable future.”
The leather goods industry and the shoe trade in Germany are still suffering from the consequences of the corona crisis
These new problems are affecting an industry that is far from recovering from the consequences of the corona crisis: In 2021, the sales revenues of the German leather goods and luggage industry fell by 12.7 percent to 406.2 million euros compared to the previous year, explained the HDS/ L Domestic sales shrank by 14.7 percent to 275.3 million euros and were a third below the level of the pre-crisis year 2019. Revenues abroad fell by 8.2 percent compared to the previous year to 130.9 million euros.
The German shoe trade also experienced another “difficult year”. The Federal Association of German Textile, Shoe and Leather Goods Retailers (BTE) said on Monday in a press release on the occasion of the Shoes trade fair, which is currently taking place in Düsseldorf. “This means that the shoe shops are now on average around 25 percent below the sales they had in the pre-Corona times,” emphasized the industry organization. Growth was achieved in the online business, but this still only plays a subordinate role for the specialist trade: “Two thirds of the shoe retailers record an online turnover share of less than 10 percent of the total turnover,” explained the BTE.
According to the association, total sales including e-commerce revenues in 2021 were “roughly at the level” of the previous year. “According to the calculations of the BTE, the market volume at that time was 10.2 billion euros and was 1.6 billion euros or 13 percent below the pre-corona level of 2019,” the organization announced.