Despite the challenges, the German leather goods industry is cautiously optimistic for 2023

At the start of the international leather goods fair ILM in Offenbach, which starts tomorrow, the German Federal Association of the Shoe and Leather Goods Industry e. V. cautiously optimistic about the future. The sales figures so far show a clear recovery in the German leather goods and luggage industry, but the general conditions remain difficult with inflation, consumer restraint and rising costs.

The figures for 2022 as a whole are not yet available, but by the end of November 2022 significant sales growth was achieved compared to the same period in the previous year. The German leather goods and suitcase manufacturers were able to increase their sales revenues by 13.6 percent to 458 million euros by the end of November.

According to the association, trade in the European domestic market and foreign sales with the euro zone were particularly important. Leather goods, which include handbags, small leather goods and luggage, but not leather clothing, saw sales increase by more than 70 percent compared to the same period last year.

Domestically, the companies in the German suitcase and leather goods industry achieved sales of around 200 million euros by November 2022 and did not quite reach the sales figures of the pre-crisis year 2019.

Rising costs on all sides

Above all, the increased leather prices caused problems. Producer prices for leather goods rose significantly by 5.2 percent last year. This is a “real turning point”, according to the association, after only small and very moderate price developments have taken place in the last decade, which were mostly in the order of one percent per year. A significant increase of 7.9 percent on an annual average was also recorded in consumer prices, where the increased energy costs and personnel costs in retail are particularly evident.

At the same time, the number of employees in the German leather goods industry has increased for companies with 50 or more employees and, with 2,914 employees, shows an increase of 4.5 percent in 2022. In 2021 there were still 2,787 employees.

Foreign trade is growing again

The total value of exports up to November 2022 was 1.91 billion euros for products such as small leather goods, handbags and suitcases. For comparison, in 2021 as a whole the value was 1.72 billion euros, which already corresponds to an increase of eleven percent by November 2022.

As for imports, the value of imported products was 3.27 billion euros by November 2022. This compares to a value of 2.84 billion euros for the whole of 2021 and an increase of 15.1 percent by November 2022.

The sales figures also show that trade with Russia has largely come to a standstill. Although Russia has no longer been one of the most important markets as a trading partner for the German leather goods and luggage industry since the annexation of Crimea, trade with Russia has come to an almost complete standstill with the Russian attack on Ukraine.

Germans’ desire to travel gives hope

The association is confident about the mood on the international sales markets for German leather goods, suitcases and luggage and hopes for a comprehensive recovery in 2023. The revival of travel activity among Germans is contributing to this. The decisive factor for this, however, is the overall political situation, including in particular the war in Ukraine, which continues to significantly affect the supply chains, for example in the procurement of materials.

Bag collection SS23 by Marc O’Polo. Photo: Marc O’Polo

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