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Leather Gifts Market Summary

1. Leather Gifts Market Consumption

Demand for travellers’ requisites (Travel documents holders, travel bags, Toilet bags, and computer cases) has increased vigorously as more people travel for holiday or business. Similarly, more women in business has meant an increased demand for briefcases, Business cards holders, Pen Holders, Notebooks, Checkbook Holders, Wallets, document cases and other office-related cases, while their higher disposable incomes have created an increased demand for high quality leather handbags and other small leather goods. The overall demand for bags/cases/holders for computers, mobile phones and other kinds of office accessories has increased.

 

An increased fashion consciousness has further stimulated this market. A large group of consumers likes to keep up with the latest trends in fashion; they often replace leather goods, even when this is not strictly necessary. In addition, an increasing variety in the design of leather goods and an increasing use of new non-leather materials (nylon, fibre, and textiles) has given a strong impulse to this mature market. Also, lower prices and increased supply through department stores have exposed a larger group of consumers to leather goods, resulting in increased sales.

2. Market Segmentation

Below are the major product segments of the Coporate Gifts specialties market:

 

• Small Leather Goods
• Desk & Office Accessories
• Jewelry & Perfume Pouches
  
• Briefcases
  
• Belts
  

 

Leather gifts suppliers offer products to a multi-segmented end-user market. Below are the major segments:

 

• Clubs, Associations, & Civic Groups
  
• Financial [i.e. banks, investor groups, financial professionals]
  
• Insurance Agencies
  
• Retail Stores
  
• Schools and Colleges
  
• Industrial Products Companies
  

3. Consumption Trends & Paterns

The general economic situation, fashion, prices, materials, colours, seasons and finish mainly influence the demand for leather goods. These factors will each be elaborated below.

3.1 General economic situation

A recession in the world economy can cause the consumption of leather goods to stagnate, since the majority of leather goods are regarded as nonessential luxury items. On the other hand, a healthier economy stimulates consumer spending in the leather goods market. Increased per capita income also has the effect that consumers become more conscious of quality and brands. Importers carefully select different kinds of leather (bovine, lamb etc.) checking defects, coating, shine and print possibilities with cheaper kinds of leather.

3.2 Fashion

Fashion sensitive products are the most profitable part of the leather goods business, where quality or technical imperfections seem to be of minor importance. However, as materials, colours, designs and sizes change quickly, short lead times from design to manufacture are required.

3.3 Prices

In general, consumers in our target markets are price conscious, so we highly consider the price of our items in combination with quality, materials, workmanship, finish, styling and so on. Because of the many different types of leather and other elements mentioned above, a general guideline about prices cannot be given. This means prices are free and competitive.

In principle, importers maintain fairly close control over the recommended retail prices, but parallel imports, an oversupply of goods and the growing success of discounters have seriously disturbed the situation.

Sources of price information are fairs, catalogues from mail-order houses (for travel and small leather goods), periodicals (for leather goods) and, of course, retail shops and department stores. The price that the end-user or the consumer pays generally consists of the following components:

 

3.4 Materials

The material from which leather goods are made influences consumer behaviour. Consumers compare the quality of materials with the prices charged. Expensive leather goods are generally made of calf or good leather from cattle hides.

 

Good imitations of exotic leathers (or exotic combined with smooth leather) are in demand for up-to-date fashion. Cheaper items may be made of lower quality cattle hides or goatskin. Split leather is often used for brightly coloured, low-budget fashion items. Some fashion items might be made of sheep leather.

 

Pigskin is normally used for lining in briefcases or attaché cases made of leather. In the case of lower priced items for business purposes, split pigskin is often used. Travel items should be produced in textiles or nylon; leather is only used for the more expensive items. Real exotics like crocodile, lizard, snake, or ostrich leather etc. are not allowed to be imported into some of our target markets, since some animals are protected by the Convention of Washington (CITES).

3.5 Seasons

There are two main seasons: winter and summer. About one year before seasons begin, importers and producers start selecting colours and models. Italian fairs for clothing and shoes are considered good indicators for the future fashion colours in the rest of the European Union. The Offenbach Fair in Germany is used as a confirmation of choice. The main seasons for leather goods in the retail trade are shown below:

 

Product groups	Period of peak sales
Small leather goods	May, December
Briefcases	August, September, December
Travel goods	June, August
Belts, accessories	May, December
Handbags	May, November, December

 

Decisions regarding fashionable products are made as late as possible, while less fashionable items are bought at the beginning of the buying season. Highly fashionable products are traded all year round, with the exception of January and July, the months in which retailers hold their clearance sales. (Although these sales periods are no longer legally enforced, many retailers still hold their sales in the months January and July).

3.6 Leather Finish

Leather finish depends on fashion, but certain general characteristics can be mentioned. The leather must be soft, natural coloured, pleasant to the touch and processing or manufacture should not impair its natural properties. Embossed leather is accepted in good imitation of exotics and in fancy embossing as well. An important consideration in several European countries is the humid climate. The finish must be able to resist rain as well as sunlight.

 

Notes:

• Source: Compiled from CBI and Annabella Fashion Ltd 2009 Business Plan.