The French leather industry exported goods to a value of 11.7 billion euros (+10%), buoyed by demand for its luxury goods.
Faced with a drop in the domestic market, the industry dynamized its exports
For the very first time, the French leather industry shows a positive balance of trade! In 2018, France exported more than it imported, with exportsexports (worth 11.7 billion euros) growing by 10% and imports (worth 10.7 billion euros) falling by 8%. In one year, the balance of trade has gained 17 points and now stands at 109% compared with 92% in 2017.
Domestic demand for finished goods has tended to decline and favour cheaper items. The average transaction values of shoes and other footwear, handbags and leather gloves have fallen by 6%, 20% and 5% respectively. At the same time, the export prices of these categories of product have increased by 8%, 15% and 7% respectively. France exports mostly premium and luxury items, the prices of which are following an upward trend. The leap of 11% in exports of finished goods is due mainly to a move upmarket in the items sold, rather than a net increase in exported goods. For example, sales of handbags (19.8 million items) saw a very slight drop in volume (-1%) but showed a sharp increase in value (+13%) thanks to an increase in the average price of some 15% (10% for leather hand bags, 19% for handbags made from other materials).
Sales of French finished goods is following a similar rhythm in Europe (54% of French exports), Asia (33%) and America (12%), with an increase in sales of between 11% and 12% in all three continents. Italy remains the largest importer of French finished goods (11%) ahead of Hong Kong (10%), the United States (10%), the United Kingdom (10%) and Singapore (9%). The reason for this performance: French expertise.
Keen interest in French products, particularly luxury goods
The French luxury industry has always turned in a strong performance at export. Sales of leather goods (7.3 billion euros), shoes and footwear (3.5 billion euros) and leather clothing (0.2 billion euros) have grown by 12%, 11% and 10% respectively.
Over the 2010-2018 period, French exports of leather goods doubled in value terms. Sales in certain countries are growing at an even stronger rate: Exports to Singapore and China have shot up respectively by 449% and 302% since 2010. In 2018, these countries increased their purchases of French leather goods by 16% and 36%. Respectively, they are France’s 2nd and 7th largest clients in this sector. Sales in China represent just 4% of French exports; but this is a fast-emerging market where consumers are showing real interest in French labels.
The 11% increase in sales of shoes and other footwear concerns all types except slippers, sales of which fell by 35%. This fall is due to a collapse in the average price of exported slippers. At the same time, in value terms, exports of shoes with leather uppers represent half the sector’s exports, and have shown an increase of 6%. Sales of shoes with synthetic uppers and shoes with textile or other uppers have also grown by 11% and 21%.
Leather shoes from France enjoy an excellent reputation abroad, with sales shooting up by 10% (46% in Hong-Kong, 44% in China). Trade in leather clothing has almost reached equilibrium. Their cover rate rose from 76% to 98%.
Taking all sectors into account, France’s main clients, namely Italy, Hong Kong, the United States, the United Kingdom and Singapore absorb more than half its exports. The United Kingdom is an important partner. Trade with this country shows a large surplus (cover rate of 688%). Exports stand at more than 1 billion euros (9% of French exports) compared to 162 million euros of imports. It is natural to wonder about the consequences of Brexit for French companies.
An indisputable slowdown in French consumption
In one year, handbag imports have shrunk from 79.4 to 74.9 million items, a fall of 6% (18% for leather handbags and 4% for handbags in other materials). The weakening of French demand is more pronounced for leather handbags than for handbags in other materials. Sales of handbags from Italy, [ECD1] Portugal and Belgium collapsed by 21%, 36% and 63% respectively. The collapse is less pronounced for imports of handbags from Asia (67.1 million items), which have only shrunk by 4% (compared to 16% for European handbags). In value terms, imports of Italian handbags have collapsed by 44%, due to the fact that the drop in the number of handbags imported is accompanied by a 29% decrease in their average price.
Imports of shoes and other footwear (503 million pairs) increased by 2%. The share of leather shoes has dropped from 47% to 44%. Deliveries of shoes with leather uppers (95 million pairs) have shrunk by 9% while shoes with synthetic uppers and shoes with textile uppers or other materials have increased by 12% and 1%. Not only is France importing fewer pairs of leather shoes, but their price has also dropped by 2%. This has led to an 11% drop in value terms in footwear imports.
For imported leather gloves, the drop in the average transaction value is 11% for city gloves, 7% for protective gloves and 12% for sports gloves. In value terms, imports have fallen by 10%, 19% and 9% respectively.
This search for cheaper finished goods has an impact on the sources of importations. With regards to finished goods, Asia gains five points of market share in France, while Europe loses five. In value terms, imports from Europe (43% of all imports) shrunk by 18%, while those from Asia (53% of imports) are practically stable, showing a slight rise of 0.5%.
After having conceded its first place to Italy last year, China is once again France’s leading supplier, taking the entire leather sector into account. Imports coming from China, which represent one quarter of all French imports, are stable. Imports from Italy had progressed by 15% in 2017, but they experienced a downturn of 27% this year. In recent years, imports from Vietnam had experienced a strong rate of growth, growing by 152% between 2010 and 2018. In 2018, growth was just 1%.
For the leather sector as a whole, imports coming from Europe have fallen by 17%, while those coming from Asia have grown by less than 1%.
Frank Boehly, President of the Conseil National du Cuir: “French luxury goods are continuing to cross borders and win market share, notably in China. Preserving our expertise and know-how is one of the great challenges for the leather sector and we applaud the courage and ambition of our professionals promoting French production.”
The Conseil National du Cuir, with its Economic Observatory, is tasked with providing information to all the players in the French leather sector. Throughout the year, output includes: a brochure and country data sheets on global trade in the leather sector, a study on France’s External Trade, annual surveys of the economic context by sector of activity (leathers and raw hides, tannery, footwear and leather goods), monthly economic context briefings on the global activity of French companies in the industrial leather sector and their external trade, data sheets on the annual activity of tanneries, footwear and leather goods as well as studies of the trade sector.
All this data is published on the website www.conseilnationalducuir.org