Vision of the future - Première Vision Paris

These are trying times in the leather industry, considering hide production, consumer appetite and geopolitical turmoil. September’s Première Vision Paris show, which unveiled the autumn/winter 2017–18 trends and collections at Parc des Expositions, reflected those circumstances with a conspicuous reluctance among foreign exhibitors to travel to potentially dangerous places.

Those who did attend, however, reaped the rewards of sharing a strategically important show with some of the market’s largest luxury companies and key decision-makers.

Italy represented the vast majority of exhibitors at the event, with 688 stands, followed by France with 260, and then Turkey with 152.

Première Vision’s leather offering, in conjunction with other offerings specialising in yarns, fabrics, designs, accessories and manufacturing, is synonymous with luxury and high-end fashion, and had 311 exhibitors from 27 different countries, as well as 20 new leather and fur-exhibiting companies.

Still, the number of exhibitors, at 1,898 across the six sectors, was down by 1.3% on September 2015. The leather pavilion also had its Trends Gallery, the Shoe Focus Forum and Incube, as well as space devoted to cutting-edge innovations including ecological applications of waste from the meat and fish industries.

Quality over quantity

Visitor numbers seemed to be down, but Première Vision has always prioritised the quality of attendees over sheer quantity. The sluggish raw materials market seems to have created some leverage in terms of pricing, but large-size cows and calves require careful attention, as hide prices show a slight upward trend. French houses are optimistic and think 2017 will see increased benefits, but from a global perspective, the situation looks bleaker.

Global growth has slowed, and is expected to reach 3.2% in 2016 from 3.1% in 2015, and clothing sales are weak. To better understand customer demand and where the market was heading, Première Vision, in partnership with the IFM-Institute Français de la Mode, created a barometer to measure the performance of exhibiting companies compared with their competitors, and the first results, presented on day one of the event, showed that French leather industry exports were in good health, up 6.9% in the first half of 2016. ?

Première Vision awards

Three tanneries exhibiting at Première Vision were awarded prizes for their exceptional leathers. Premiere Vision recognises the most innovative fashion methods and designs, historically with fabrics, but for the second time, the competition included leathers. Three new prizes were attributed to exhibitors during a ceremony on 13 September. Italy’s Dileather took the Leather Grand Jury Prize 2016 for its exceptional, symbolic and pertinent leather of the season.

Sakamoto Corp of Japan won the Leather Handle Prize 2016 for its product’s remarkable tactile and behavioural qualities, while Turkey’s Anil Tannery scooped the Leather Imagination Prize 2016 for the most daring and original leather in terms of technique, finishing and technology.

The French leather industry in numbers

• 8,000 businesses
• €15-billion turnover
• 70,000 people employed in the leather, tanning, footwear, leathergoods and glovemaking, and leather goods retail industries
• World leader in finished calf and exotic leathers
• Third biggest global exporter of leathers and raw hides
• 13th largest exporter of finished leathers
• Third biggest exporter of leather goods worldwide.

Market report: France

Exports, worth €2.9 billion, grew by 8% against 2015, with the trends varying greatly according to the country.

Hong Kong is France’s largest customer for leather goods. After a period of fluctuation, the sector has stabilised with an increase of 12%: at the same period in 2014, exports stood at €385 million, in 2015 exports represented €347 million, while in 2016 they reached €390 million. The drop in 2015 can be explained by the effects of the Chinese Government’s efforts to crack down on corruption, which penalised the luxury market, a strong presence in Hong Kong. France is the second largest supplier of leather goods to Hong Kong, after China.

France has experienced constant growth in its exports to the US. They grew by 29% between 2014 and 2015, and by 5% between 2015 and 2016. In value terms, 60% of items exported to the US are handbags and 21% are small leather goods.

For the first time, Singapore has entered the top three leading customers. Sales almost doubled there between 2015 and 2016, increasing from €193 million to €367 million. The luxury industry is developing rapidly in the country and demand is following suit: 53% of exports to Singapore are handbags and 30% are small leather goods, representing in value terms some €196 million and €110 million respectively.

Export to China increased by 5% during the first half of 2015 and the first six months of 2015, and by 11% for the same period between 2015 and 2016. This growth is driven almost entirely by luxury articles. One quarter of the handbags exported by France worldwide, in volume terms, are leather handbags. With regard to China, this proportion stands at 80%, approximately 80.7 million individual items.

Sales to Japan, meanwhile have collapsed. In value terms, handbags represent 56% of Japanese imports. They have dropped by 43% in value terms and 10% in volume. In 2014, the average price of a handbag exported to Japan was €241. This fell to €332 the following year and was down to €209 in 2016, which represents a fall of 13% in two years.

Luxury bags are still in high demand internationally, however. A French handbag is exported with an average price of €373. The average price is €233 for the European Union, but increases to €671 for China, rises to €872 for Singapore, and then again to €903 for Hong Kong.

French footwear has shown encouraging results, thanks to an upwards trend in sportswear. Exports have shot up by 8% to €1.47 billion. Sales within the European Union, which represents three-quarters of exports in value terms, have increased by 13%. The number of pairs sold is the same as in 2015, (some 47.9 million), with an increase in the average transaction value of exported shoes. This increase is notably driven by shoes with leather uppers (not including slippers).

At the same time, French production has fallen by 2.4% and revenue has shrunk by 5.5%. The drop in national demand is linked to the terrorist attacks, the poor weather and a generally difficult economic context.

The leathers and finished hides sector has seen activity increase slightly. For French tanneries, the earlier part of the year appears to have been less difficult than in 2015. The production of finished bovine leathers and finished ovine hides has enjoyed growth of 3.2% and 11.6% respectively. Exports grew by 6%. For finished bovine or ovine leathers, the situation is therefore much better than in 2015. Exports are taking off, increasing by 20% (€53 million) and 10% (€32 million) respectively.

The climate is more delicate for finished calf leathers. Production and exports shrunk by 4% and 3% respectively. Exports of finished calf leathers grew by 6% in Italy, 5% in Spain, 10% in Morocco and 29% in Tunisia.

But sales dropped by 25% to the UK (€3.6 million in 2015 against €2.7 million in 2016), by 7% to Portugal, by 34% to the US (€1 million in 2015 compared with €0.7 million in 2016) and by 66% to Hong Kong (€1.8 million in 2015 against €0.6 million in 2016).

Globally, sales of finished calf leathers fell from €34.5 million in the first half of 2015 to €33.4 million in 2016.