RAW MATERIALS
RAW HIDES AND SKINS AND SEMI-PROCESSED LEATHER – PRICETRENDS
- Y2020 began with a (prevailing) upward trend in raw material prices, albeit minimal and of decreasing intensity with the passing of the weeks (February and March, already under the progressive influence of the Covid-19 effects in China and then in Europe, were substantially unchanged)
- Calfskins showed the greatest stability within the bovine segment, while bulls (followed by cows) recorded the most significant variations (on the rise). Some upward movement also on steers/heifers, but practically only in January
- On the other hand, the average price indices for sheepskins have not moved, with few variations also from the detail of the main origins monitored
- Average downward trend for wet-blue bovine leather in January (-2% compared to December), then stability prevailed due to the evolution of the pandemic
RAW MATERIALS
RAW HIDES - TRENDS IN AVAILABILITY (SLAUGHTERING)
- The overall panorama on the slaughtering of adult bovine animals in the first quarter of 2020 is substantially unchanged if compared with the same period of the previous year - The EU complex grows by 3% with France as the only major producer to show a (slight) drop - also increasing US, Argentina and New Zealand, while Brazil falls
- A negative sign for the total slaughtering volumes of calves (-3%) - The drop appears widespread in all the main Countries monitored, with few exceptions going against the trend (Spain, Germany)
- The overall picture of sheep slaughtering in the main available regions also fell (-3%) - The total European production lost 2% (with only Italy and Ireland on the rise), against declines in the US and Australia as well, New Zealand on the rise
Tanning sector Trends
- Widely negative quarter for the average turnover indexes of tanneries - The market situation appeared already influenced by the consequences of Covid-19 in the first three months of the year and the sales results were affected by the different degree of spread of the pandemic in the various main manufacturing Countries
- In the medium-large bovine leather segment, only Turkey and Argentina, driven by exports, showed a positive sign compared to the first quarter of the previous year (all the other national players were down) - More differentiated performances in the comparison made with the last three months of 2019, but the value of this analysis (due to the diversity of seasonal production levels) is more limited
- Widespread double-digit sales index losses in the calf leather segment
- Overall situation of sheep and goats leather was also negative - Only Turkey seems to show positive variations
Luxury
Ist QUARTER 2020 RESULTS
After the successful conclusion of 2019, the cautious optimism reserved by the brands for the new year' opening, has left room for the highly negative impact of the global diffusion of the coronavirus epidemic. In fact, the first quarter 2020 results reflect a scenario seriously undermined by the outbreak of the pandemic.
- LVMH – Revenues decreased by 17% for the French luxury goods colossus, with the fashion/leather goods division recording the most limited loss in revenues (-10% on the 2019 equivalent). Proof of resilience especially from Louis Vuitton and Christian Dior.
- KERING – Evidence of resilience also from the second largest French luxury goods group, which recorded a loss in turnover by 16% in the quarter. After a promising start this year, the impact of Covid-19 mainly affected Gucci (-23%), Yves Saint Laurent (-14%) and other houses of the group (-5%). BottegaVeneta bucked the trend (+8.5%).
- TOD’S – strongly hit by the Covid-19 crisis, the Italian group recorded an overall decline of 30% in the quarter. Double-digit losses for all the brands in the group: Tod's (-32%), Hogan (-26.5%), Roger Vivier (-31%) and Fay (-19%). The impact of the coronavirus is reflected across the footwear (-30%) and accessories divisions (-36%).
- FERRAGAMO – After the stable conclusion of 2019, the Florentine brand recorded a decline of more than 30% in revenues (constant rates) in the first quarter of the current year. Results for all product categories were down: -32% for shoes, -29% for leather goods and leather accessories. The persistent global uncertainty due to the Codid-19 does not allow to make reliable forecasts about the sales dynamics in the coming months
