Leather Pipeline examples support the message of many months
18/04/2017
Daimler reported record sales for the first quarter and almost doubled the level of profit that market expectations seemed to indicate for the period. At the same time, luxury group LVMH delivered equally positive results, including impressive growth in its fashion and leathergoods business unit. In contrast, though, footwear retail group Payless Shoes has filed for bankruptcy protection in the US, which could be bad news for the brands that supply its shoes, for the contract manufacturers who supply those brands and for the tanners who supply the contract manufacturers.
Leatherbiz Weekly has been saying for some time that demand in automotive and in the luxury leathergoods sectors appears still to be strong. In contrast, the mainstream shoe market continues to suffer, with the competition from shoes with synthetic uppers placing so much price pressure on lower-end leather shoes that it’s difficult for companies in this segment to continue to make ends meet.
The three examples the Leather Pipeline has picked out appear to support this thesis.
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