Summary

from 2020 onwards, the global luxury leather goods market has experienced significant growth. However, trends indicate that the market remains highly concentrated, with leading players such as LVMH, Hermès International and Kering dominating a considerable majority of market share. The industry continues to be propelled by factors such as growing demand from affluent upper-middle-class consumers, particularly in China, and the increasing influence of digital technology and online sales, which have seen a marked rise. In addition, the second-hand market for luxury goods has grown, attracting consumers interested in durability and lower prices. French luxury leather goods, in particular, benefit from the "Made in France" label, synonymous with quality and craftsmanship.

Despite a dynamic market, challenges such as the impact of veganism and the need for ethical and sustainable production practices are emerging trends that are influencing the direction of the industry: changing consumer habits in France's dynamic luxury leather goods market The French luxury leather goods market has enjoyed an impressive growth trajectory, reflecting global trends and supported by increasingly demanding consumer segments.

The French Luxury Leather Goods Market: Trends, Tourism and Sustainability

Women represent the dominant force in demand, accounting for between 90% and 95% of the market for luxury bags and small leather goods. This trend has remained constant, with the proportion of sales to women remaining unchanged at around 92% over a five-year period, despite the explosion in total sales from around €2,465 million to almost €4,000 million.

This robust market is also characterized by its appeal to a diverse range of consumers, including a considerable influx of tourists. France, with a record number of tourist arrivals exceeding 90 million, benefits significantly from Chinese visitors gravitating towards duty-free luxury goods, particularly during key periods such as Golden Week. The contribution of Chinese tourists to the French luxury market has been meteoric, with increased spending and the realization of around 35% of the value of luxury purchases worldwide. Their influence is matched only by that of the burgeoning cohort of millennials, who already hold around 35% of the luxury market, with forecasts suggesting their share could reach 45% by 2025.

Sustainability has become a key demand factor in the French market, with around two-thirds of French consumers acknowledging the influence of ecological considerations on their purchasing decisions. Age plays a key role in determining which aspects of sustainability are prioritized, with an emphasis on transparency of materials, ethical production practices, ecological impact and animal welfare across different consumer age brackets. This is exemplified by the vegan leather movement, an ethical and environmentally-friendly alternative that challenges traditional notions of the leather industry and invites innovation from luxury and vegan brands alike. Meanwhile, the "Fabriqué en France" label enjoys a commendable reputation, synonymous with heritage and craftsmanship.

The country is highly regarded for its expertise in luxury goods, and around 20% of global consumers consider France to be the leading manufacturer of high-end handbags and shoes. This esteem propels the French market to the forefront of global luxury goods production, an image that is continually reinforced by the market's inclination towards quality, innovation and respect for the environment. In essence, the French luxury leather goods market is not only thriving numerically, with sales set to increase by around one billion euros in the years ahead, but is also evolving.es to come, but it is also evolving qualitatively, with growing demands for sustainability, provenance and social responsibility.

Notable giants of the luxury leather goods industry

In the refined and illustrious world of luxury leather goods, several iconic players have forged an unshakeable reputation for offering unrivalled quality, style and sophistication through their exceptional products. These major players don't just dominate the market, they shape it through their innovative designs, marketing strategies and investment in craftsmanship.

  • LVMH (Moët Hennessy Louis Vuitton) stands at the pinnacle of luxury, not only holding a dominant market share, but boasting a portfolio of more than a dozen famous brands, including the illustrious Louis Vuitton. With Louis Vuitton alone accounting for 30.5% of luxury leather goods sales in France in 2018, LVMH has firmly established itself as a heavyweight in the luxury sector. The conglomerate's strategy of promoting heritage and craftsmanship, coupled with aggressive expansion, has enabled it to capture the hearts of luxury consumers worldwide.
  • Hermès International has forged a legacy of meticulous attention to detail and a commitment to preserving and nurturing artisanal techniques. A name that instantly evokes prestige, Hermès is renowned for its exquisite craftsmanship and the iconic status of its bags such as the Kelly and Birkin, which are not just accessories but considered investments in their own right, sometimes fetching extraordinary prices in auction houses.
  • Kering is another major group in the luxury goods landscape, with flagship brands such as Gucci and Saint Laurent enriching its portfolio. Kering's modern approach to luxury branding, combined with a focus on sustainability and digital innovation, is helping it to resonate with younger, more socially conscious consumers.
  • The Chanel brand no longer needs to be presented as a purveyor of haute couture. With its 2.55 handbag, a timeless piece that symbolizes the marriage of luxury and function, Chanel continues to be an emblem of sophistication across generations. The brand's commitment to exclusivity and high-quality craftsmanship adds further appeal to its already esteemed collection.
  • Prada has stood the test of time, with products that reflect avant-garde aesthetics combined with practical elegance. Prada's stories and creations often push boundaries, making the brand a must-have for those seeking a blend of contemporary style and classic luxury.
  • Among these luxury houses, there are also skilled subcontractors like Thomas Leather Goods, who may not be household names but are an integral part of the industry. They bring their technical expertise and know-how to the big brands, enriching the luxury leather goods sector.
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Summary and extracts

1 Market overview

1.1 Presentation

Leather goods refers to the industry of preparing fine leather and producing articles with this same leather, whether they are bags, gloves, belts, or other fashion items. While it is easy to name some of the houses that belong to the world of luxury, it is much less easy to draw a clear line between leather goods as a whole and the so-called luxury leather goods.

According to a a report from the National Leather Council, the leather goods sector as a whole generated a turnover of 3.236 billion Euros in France in 2017, for a sector that includes 448 companies and employs nearly 21,000 people in France.

Moreover, according to Mazars,"made in France" would be particularly sought after in a global luxury leather goods market that grew by 70% between 2003 and 2012.

The luxury leather goods market remains dominated by the main luxury brands, leaving little room for new entrants. The numerous takeovers testify to the growing concentration of the market.

The main source of growth in the market remains China and its upper-middle class with strong purchasing power.

 

1.2 A growing global market and optimistic professionals

Breakdown of luxury revenues by segment World, ****, % Source: ****

The global luxury market has grown in recent years to reach $**** billion in ****. **% of revenues are for the luxury personal goods segment, which includes luxury leather goods.

Breakdown of luxury personal goods revenue by segment World, ****, % Source: ****

The Luxury Leather Goods segment represents ...

1.3 A fast growing French market

In line with the good figures worldwide, luxury leather goods are doing very well in France.

Evolution of luxury leather goods sales France, ****-*****, million euros Source: ****

Luxury leather goods recorded a strong increase between **** and ****. According to Euromonitor forecasts, this trend is expected to continue: between **** and ****, Euromonitor considers that ...

2 Analysis of the demand

2.1 A demand primarily from women

Distribution of sales of luxury leather bags and small leather goods by gender France, ****, % Source: ****

The demand for luxury leather goods in France is mostly female. Sales of luxury leather bags and small leather goods are mainly aimed at women. The latter accounted for **% of sales in **** and still accounts for ...

2.2 The different consumers

Tourists, especially from China

Luxury leather goods have been able to benefit from an increase in local and especially international purchases. Indeed, France has set new records in terms of tourist arrivals, with over ** million foreign visitors in **** and ****. Among them are Chinese tourists, who now play a key role in ...

2.3 Sustainability criteria: the emergence of veganism

According to a BCG survey, **% of the French consider that their purchasing behavior is influenced by sustainable development criteria. This trend is even stronger among the younger generations. However, the criteria vary according to the age category as illustrated below.

Which sustainability criteria do you value when it comes to buying ...

2.4 The Made-in France label

Made-in-France is a guarantee of quality: consumers associate it with know-how and history.

Which manufacturing country do you consider the best for luxury brands? World, ****, % Source: ****

According to a survey conducted by BCG, France ranks second in terms of recognition of its know-how. Although Italy is considered the best manufacturing country ...

3 Market structure

3.1 At the base of the value chain: the activities around the raw material

Suppliers of raw hides and skins

Companies operating in the leather and raw hide sector are often directly integrated into the slaughterhouses. Their activity depends largely on the economic situation of the agricultural world (***) as well as on the evolution of the national and international leather market.

Evolution of the turnover ...

3.2 French leather goods production concentrated in Ile-de-France and Auvergne-Rhône-Alpes

In this section, we broaden the scope of the study, and focus not only on luxury leather goods, but leather goods in general and more specifically items manufactured in France (***). The turnover of the French Leather Goods industry amounts to *.* billion euros, up *% from last year in ****. [***] This trend is explained ...

3.3 A concentrated market

Breakdown of the luxury leather goods market share France, ****, % Source: ****

The French market is highly concentrated: indeed, * groups gather **% of the market share. These are LVMH SA, Hermès International SCA and Kering SA. LVMH SA is the leader in this market, with **% of sales, far ahead of Kering SA (***).

While ...

3.4 The distribution of leather goods is marked by the rise of digital technology

Evolution of the distribution of luxury leather goods sales by type of distribution France, ****-****, % Source: ****

It can be seen that the majority of sales are made in stores. Online sales are in the minority, but the share of luxury leather goods sales made online has been growing steadily in recent ...

4 Analysis of the offer

4.1 Price range & auction

Pricing of leather luxury products

Source: ****

Although it is difficult to define a clear boundary between what is luxury and what is not, one great characteristic that is unique to luxury items is that they have no upper price limit. Thus, if we can arbitrarily consider that a luxury handbag starts ...

4.2 Production concentrated on a small number of products

In this section, we broaden the scope of the study, and focus not only on luxury leather goods, but leather goods in general and more specifically on items manufactured in France (***). Billing for leather goods manufactured in France by an establishment or one of its subcontractors amounted to approximately €*.* billion in ...

4.3 The growing importance of the second-hand market

The second-hand market is steadily increasing. Luxury brands of bags and luggage are particularly popular via these channels, with bags accounting for **% of the second-hand market in France and small leather goods accounting for **% of luxury second-hand purchases.

Multiple web platforms promote second-hand items, as illustrated in the chart below:

Platforms ...

4.4 The threat of counterfeiting

European luxury manufacturers lose nearly ** billion euros a year to counterfeiting. [***] This is not only a loss of revenue, but also a loss of direct jobs: legitimate manufacturers need less manpower and as a result, nearly ***,*** jobs are considered directly lost in these sectors across the EU. Specifically, the luxury clothing, ...

5 Regulation

5.1 Regulations

The "leather" denomination

The term leather is protected by French regulations (***), chips or powders of reconstituted leather and even materials derived from bio-manufactured hides can not bear the name leather. The indications "synthetic leather", "reconstituted leather" or "leather of ..." are therefore not legal and have no right to be affixed to ...

List of charts

  • Breakdown of luxury personal goods revenues by segment
  • Evolution of sales of luxury leather goods
  • Top 10 countries in terms of luxury leather goods sales
  • Evolution of the sales volume of luxury leather goods
  • Luxury leather goods sales volumes by country
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Latest news

Hermès starts 2022 in a good position. - 14/04/2022
  • In the first quarter of 2022, Hermès posted sales growth of 33% to 2.76 billion euros
  • U.S. market up 44
  • Euro zone sales up 44%, Japan up 17
  • In China, the luxury house has 26 stores, and the 3 in Shanghai are closed due to sanitary measures
Hermès sees first-half results soar - 30/07/2021
  • Sales 4,235 billion euros by January-June 2022
  • Operating income recurring 1.722 billion euros
  • Sales up 77% compared with 2nd quarter 2020
  • Sales up 44% on 1st quarter 2022
Creation of a new plant for Hermès in Auvergne (250 new jobs) - 16/09/2020
  • Creation of 250 jobs Hermès has another site in Sayat (Clermont-Ferrand)
  • The new building will be operational by 2023
  • Since 2010, Hermès has opened nine plants, creating 2,500 new jobs.
  • Hermès employs 3,800 saddlery and leather goods makers in France.
  • Hermès Maroquinerie Sellerie has 22 production sites

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Hermès International
Prada Groupe
Chanel
Michael Kors
Maroquinerie Auguste Thomas
Les ateliers d’Armançon
Les Ateliers de Vitré
Maroquinerie Pierre Cotte
Lancel (Piquadro)
Lancaster Maroquinier
Farfetch
Rioland Groupe

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