Rising prices of leather and leather products hit European luxury brands

With the recovery of high-end consumption and the growing middle class in China pushing up the prices of leather goods and other rare leather goods, European luxury goods companies are preparing to accept the fact that raw hide prices have risen.

Federal data show that the price of cowhide rose to the highest level in the past decade. Last year's increase was 24%, to 82 US dollars. John Reddington, president of the US Skin and Leather Association (U.S. Hide, Skin and Leather Association), said that as the supply of leather in the United States begins to shrink and consumer demand for leather products continues to recover, this year's cowhide price may rise further. . The association is an industry group. The United States ranks third in the annual output of raw hides and ranks behind China and Brazil.

Rare weather, including floods in Australia, has also put pressure on the supply of raw materials.

The Chief Executive of the Hermès Group, Patrick Thomas, said on Friday that what we are most worried about is the rising price of raw materials, especially rare leather. It is expected that the price of crocodile skin will increase by approximately 25%. He also pointed out that although leather prices rose last year, the increase was not significant.

Thomas said that Hermès will gradually increase prices, and said that at this stage they try not to increase prices. If prices increase this year, then the increase will also be moderate. Half of the Hermes Group's annual sales are from leather products.

Italian tanners said that despite difficulties, they are still trying to reduce prices while looking further afield for leather sources.

Graziano Balducci of UNIC, Italy, said that price increases are a problem. Our customers do not want to save more, but it is reasonable for the leather industry to be forced to raise prices. Barducci is co-founder of Antiba, a tannery headquartered in Tuscany. Antiba specializes in providing services for luxury companies.

Italian tanneries produce about 20% of the global market and 65% of the European market.

The power to boost this round of leather price hikes is a growing middle class from China, Vietnam, and other Asian countries. As income increased, the middle class in these countries began to consume leather products. In addition, as global economies recover from a severe recession, consumers have begun to purchase luxury leather goods in large quantities.

Leather is not the only raw material for the surge in price. In the past six months, the Intercontinental Exchange’s cotton prices have risen by 139%. On Monday, cotton prices hit a record high of $2.1970 per pound.