01 September, 2020 - 01 November, 2020
01 September, 2020 - 01 November, 2020
30 September, 2020 - 01 October, 2020
New York NY, U.S
17 October, 2020 - 21 October, 2020
North Carolina, USA
21 October, 2020 - 23 October, 2020
When Marco Gobetti, CEO of British luxury brand Burberry, announced his turnaround strategy for the ailing fashion house around two and a half years ago, he put expansion into leather goods and handbags - an area where the brand has struggled to compete - at the top of his agenda.
This was followed by the acquisition of the brand’s Italian leather goods manufacturer CF&P in 2018, a bid to take control of its supply chain, following in the footsteps of brands such as Hermès and Chanel who were among the first to take their suppliers and craftsmen in-house.
Presenting Burberry’s half-year results to the market last November, Gobetti reiterated this strategy, and although he conceded that the leather division was a ‘long-term growth story’, he was confident that leather goods will generate 10% of all sales in the future. It is not surprising that Burberry is after a slice of the lucrative luxury leather goods cake, which in the main is dominated by rival fashion houses such as Louis Vuitton, Chanel and Gucci, the latter of which just keeps on generating record double digit sales growth and is a beacon in parent company Kering’s portfolio. The brand’s iconic Double G belt and Soho Disco bag were among the most coveted fashion items of 2019.
It is easy to see why luxury leather goods are such an attractive proposition for high end fashion brands. So called ‘It-bags’, for one, are big ticket items; they are status symbols which command high margins and greater full-price sell-through which is in stark contrast to the almost universal discounting in other product categories, and they come with the added bonus that they have no size or seasonality and therefore transcend many of the barriers designer clothing, for instance, faces. Furthermore, despite the shift towards alternative materials and ‘vegan’ merchandise, luxury brands still appear to be committed to leather as a desirable, premium and superior material. At the first Sustainable Leather Forum in Paris, which was held in September last year, representatives from luxury houses Hermes, Kering and LVMH all emphasised their commitment to leather, presently and in the future. Moreover, analysing women’s luxury products in the U.S. and UK market that were described as ‘vegan’, ‘non-leather’ or ‘faux-leather’, a recent study by research group Edited ascertained that these alternatives only made up around 2.3% of women’s leather goods for luxury brands, driven largely by fashion label Stella McCartney. Leather and luxury is still a perfect - and profitable – match, it appears.
A dangerous, destructive trend
And yet, leather is increasingly on a downward spiral, not only in terms of its image but also with regards to authenticity and quality, competing with the cheaper, plastic-based materials that are inundating the market – severely damaging its reputation and appeal in the process. Dropping standards, producing lower-grade or plastic-like leathers and competing on rock-bottom price is a dangerous, destructive trend that is very hard to recover from as the industry is increasingly finding.
Parallels can be drawn from the fashion industry. When fast fashion started to take off in the early to mid 2000s, it caused a ripple effect and led to many retailers and brands, particularly mid-market players who were the first to try to emulate the fast fashion ‘high volume / low price’ model, going out of business as in the long-run they simply could not compete on such low prices, margins and quick turnarounds. However, premium brands who focused on clear brand identity away from fast fashion fads, on their heritage, quality, service and technology, and most importantly stayed true to their DNA, on the whole managed to not only survive but thrive, helped of course by the fact that all this appealed to a different, more discerning clientele than the predominantly young fast fashion consumer who has a lower income in general.
Upgrading the perception of leather
The thing is, buying products at a premium is about perception, prestige and psychology. Most consumers still regard higher-priced items to equate to better quality and a certain je ne sais quoi that luxury brands in particular know how to harness. Leather is ideally suited to this mentality, as traditionally it has been perceived as such a high-quality material. It’s a shame that at some stage leather lost this sense of identity and allowed itself to get overtaken by the competition, joining a race to the bottom which has no real winners. And it is not a strong position to be in. This cannot continue. Instead, I believe that focusing on quality, identity, versatility and the natural credentials of leather – not to mention the sustainability aspect – must be the way forward. This goes not only for luxury leather goods, but can be translated to all other leather-using sectors from footwear and fashion to upholstery or automotive. Leather needs to be seen as a premium option that is valued by the discerning consumer, not as a cheap, throwaway commodity equivalent to its plastic peers - and maybe it’s not too late yet to be on a turnaround path like Burberry.
Isabella Griffiths, Editor