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Leather is no longer for “mass consumption”

Leatherbiz Weekly’s most recent Market Intelligence report into the leather pipeline (September 30) says that cracks are now appearing in industry confidence that the price of leather can keep increasing.

The report says two main factors have combined to make buyers think increasingly high prices for leather are not worth paying. The first is that many commodity prices have been coming down, including those of cotton and oil. Leatherbiz Weekly says the value of cotton is at a six-year low, while oil prices also remain low in spite of geopolitical tensions at the moment.

This means that price-conscious designers and brands have cheaper alternative materials to turn to if the price of leather tests the limits of their budgets too keenly. And the report says that suppliers of leather constantly telling customers that leather will continue to increase in price and, possibly, become restricted in supply has helped push these consumer product designers and manufacturers towards synthetic alternatives.

It suggests that “the undisputed fantastic performance of leather products since the last crisis in 2008” has created the view that the supply of raw material is so limited that any expansion in consumption would allow “an endless increase in raw material values and in the price of leather”. Some in the industry allowed themselves to believe that this would go on indefinitely. However, a widening of the gap between the price of leather and the price of alternative materials is in danger of convincing buyers in some segments to turn away.

“Leather is not for mass consumption any more,” the report concludes, “nor as essential as many people might hope. It’s only above certain prices that the material comes more into play and influences the decision of consumers who are willing to spend more to buy exclusivity.”

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