According to a new analysis by Plimsoll Publishing Ltd and contrary to popular belief, smaller leather companies are not being forced out of the market by their larger counterparts, as those are busy fighting each other.

The analysis focuses on the top 70 companies in the UK leather industry which, despite favourable market conditions, are failing to fully utilise their position leaving the small companies to prosper.

Senior Analyst at Plimsoll Publishing, David Pattison, attributes the failure to congestion at the top, with 35 of the leading companies having failed to increase sales above inflation, compared to 33 last year. “Size does not necessarily lead to success in the leather industry. 18 of the leading companies did not make a profit last year. Despite their size, they are less profitable than the smaller players. Only 8 of the top 100 have shown profit growth in 3 consecutive years. 10 companies have not made any profit over the same period.”

One explanation for the stagnation may be the high percentage of directors who have been in the job less than three years, an entire 21%. On the other hand, the 26% of the experienced, aging (over 60) and well-paid (average of £72,000 per annum) directors will soon be retiring.

Congestion at the top is normally cleared by major acquisition. “It is a clash of the titan scenario – I predict we might see at least two of the UK’s top 70 leather companies having to merge or to be taken over. In fact, it’s so likely we have put 24 on the danger lists,” said David Pattison.

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