Leather Good & Luggage Manufacturing in the US Industry Market Research Report From IBISWorld Has Been Updated

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Imports continue to hamper domestic growth; while some leather good and luggage manufacturers will increasingly shift production overseas, others will continue to exit the industry at a steady pace over the next five years, and other existing industry firms will focus on designing and marketing activities and producing high-end products that carry a higher price tag in niche markets. For these reasons, industry research firm IBISWorld has updated a report on the Leather Good & Luggage Manufacturing industry in its growing industry report collection.

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Imports from low-cost suppliers pose a competitive threat to the industry

Despite its positive performance during the five years to 2013, the Leather Good and Luggage Manufacturing industry is in a state of decline. “Its revenue has long suffered from import competition and offshoring,” says IBISWorld industry analyst Nikoleta Panteva. “Price pressures from downstream markets during the recession further worsened conditions for industry players, causing revenue to drop 16.6% in 2009.” The following years to 2013 signified a post-recessionary rebound for the industry's participants, with revenue growing at an annualized rate of 1.4%. In 2013 alone, IBISWorld anticipates revenue will grow 2.6% to $4.1 billion.

But these recent revenue trends are not entirely telling of the Leather Good & Luggage Manufacturing industry's condition. In the past five years, imports have become an increasingly important part of this industry, making up 88.4% of total domestic demand for luggage and leather goods. Low-cost suppliers in China and Vietnam can deliver accessories at lower prices than local firms, making domestic items less attractive to downstream retailers and consumers. As a result, companies remaining in the industry have shifted their focus to designing and marketing activities, while contracting third parties to manufacture goods or opening up their own facilities abroad.

Industry concentration has dropped dramatically during the past few years because major players have completely discontinued manufacturing operations in the United States. This includes companies such as Coach Inc. and Tandy Brands Accessories Inc., which now source all of their products from low-cost countries. In the United States, Coach now operates as a designer, marketer and distributor. As such, the number of industry locations has shrunk at an annualized rate of 1.5% to 6,503 since 2008. Some operators have kept production local, focusing instead on high-end designs that carry a higher price tag in niche markets.

In the five years to 2018, industry revenue is expected to drop. According to Panteva, “much of the industry's operations have already moved to low-cost foreign countries, meaning that the remaining operations will increasingly produce high-quality products.” Profit (i.e. earnings before interest and tax) is expected to inch up, though. Increased investment in technology will aid companies in achieving efficient production of high-end goods, helping these firms sustain profitable operations. Still, imports will continue posing a competitive threat to the industry, expanding their share of the domestic demand for leather goods. For more information, visit IBISWorld’s Leather Good & Luggage Manufacturing in the US industry report page.

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IBISWorld industry Report Key Topics

Operators in this industry primarily manufacture clothing accessories, including belts, hats, luggage, handbags, wallets and various other leather goods.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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