Leather goods, 2024 begins in decline: a quarter of companies lose 20% of turnover

Similar dynamics for footwear: a traditional logistics platform for fashion multinationals, Switzerland already showed a sharp decline on the previous year (-47.2%) at the end of 2023, a fact linked to a change in the distribution strategies of the brands, which have replaced transit through Swiss hubs with direct shipment to end markets.

The figures for the Far East were better, where leather goods exports remained more or less stable overall in the first part of the year (-0.5%) and growth in value was recorded in Japan (+3.5%), Taiwan (+8.7%), Thailand (+15.6%), Singapore (+3.3%) and above all Hong Kong (+29.7%, which significantly reduced the gap with 2019). On the other hand, the area's two main markets, China (-4.8%) and South Korea (-9.4%), declined, occupying 3rd and 4th place in the overall export ranking. In the Middle East, the Arab Emirates jumped (+75%) and Qatar did well (+12.7%).

In the American area, North America is struggling (-0.3% in value for the United States and -9.5% for Canada) although, thanks to the excellent results achieved in 2022, the comparison with 2019 levels puts current values over 85% above then. This is probably one of the reasons why the United States was mentioned by the leather goods manufacturers participating in the survey as the most interesting/promising market in the current difficult economic phase (57% of respondents named it).

From a merchandise point of view, reductions of more than 10% affected the two main merchandise items, i.e. handbags (which account for more than 70% of foreign sales in value), down 12.2% compared to the first three months of 2023, and small leather goods (i.e. wallets, purses, key fobs and pocket or handbag items), which showed a -16.3% decrease. Among the remaining typologies, belts also lost ground, -12.7%, while luggage and travel items appeared stable (+0.2%).

On the domestic front, the ISTAT index of the value of retail sales in Italy (referring to 'leather goods + footwear') shows a weak increase in the first three months of 2024 (+1.4%), which nonetheless leaves current levels still 1.3% below those (already largely unsatisfactory because marked by a continuous slow erosion in previous years) of the same pre-pandemic 2019 period.

The figures concerning business demographics and the labour force in the first quarter show slight decreases compared to the final balance for 2023: according to the Infocamere-Movimprese database, in fact, the number of active companies, between industry and crafts, fell by 1.2% in 3 months (from 4,716 to 4,659), with a negative balance of 57 units. The selection process triggered by the pandemic emergency therefore continued, albeit with less intensity. The most significant decreases in absolute terms concerned Tuscany (-29 companies), where almost half of Italian leather goods manufacturers are concentrated, and Emilia-Romagna (-11). As regards the workforce, Chamber of Commerce figures show a drop in the first three months of the year of 119 employees, equal to -0.2%. Substantial stability, therefore, as expected for their own company - with reference to the first half of the year, however - by about 70% of the entrepreneurs interviewed.

The sharply reduced production activity at the start of 2024 has caused a leap in the number of Wage Guarantee Fund hours authorised by Inps for companies in the leather sector: data for the first four months show that 11.3 million hours were authorised, +155.6% compared to January-April last year. These levels - lower in the last 15 years only to the record authorisations of the first four months of 2020 and 2021 at the height of the pandemic emergency - are 4 times higher than those of January-April 2019 pre-Covid (+305.5%) and +9.5% higher than those of the first four months of 2010, during the global economic crisis.