LVMH Group Contends For Stronger Leather Business Market

According to the information of Paris banking and securities department, the global market of luxury leather accessories in 2014 has increased from 18% in 2003 to 30% now.

With many fashion brands squeezing into the accessories market, luxury giants such as LVMH, Kai Yun and Herm s have been competing fiercely for leather enterprise control. No luxury brand is firmly in control of the supply chain.

In the past ten years, the success of leather products market has made the enterprises change their faces, make the brand revitalize, and contribute significantly to the double-digit growth rate of the whole luxury industry's revenue.

Competition in this category is fierce and the market is very crowded.

If a brand has the ability and ambition to convey the message that it wants to use the best material, it can get a very high price increase.

For example, handbag products actually contribute extremely important gross margins to luxury goods companies.

The prosperity of accessories business has grown into Louis Vuitton.

Gucci, Prada and other brands are the key drivers of recent retail expansion.

Besides obtaining high profits, leather products, especially handbags, are also attractive retail business categories.

They are not only efficient in sales (sales per square foot), but also in full price sales.

According to the data of the Bank Securities Department of Paris, the annual compound growth rate of Louis Vuitton's Keepall Bandouli Bandouli re plus shoulder strap travel bag and Herm s s Leather Handbag price has reached 6% over the past 30 years, and the annual compound growth rate of Chanel 2.55 sheepskin handbag price has reached 13% over the past 10 years.

According to the data of Paris banking and securities department, 10 to 15 years ago, Louis Vuitton and Gucci were the only super luxury brands in the market with the emphasis on accessories. Herm s and Coach respectively dominate high-end and light luxury markets. Now Chanel, Bottega Veneta, C line, C, hon, Hsuan, HSI, and almost all other fashion brands, such as Lu Wei Ming Xuan group, Kai Wan Group and X. Feng Group, have entered the market.

In late June this year, some bloody pictures of crocodiles were shown in international fashion media.

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They said they killed the animals in the farms of the United States and Africa in order to make handbags.

French media Challenges reported that over the years, a French foundry called Arman on has been producing Hermes, Louis Vuitton and Chanel's senior leather goods - Hermes leather is not entirely self-made.

This surprised the Chinese public, especially when it was mentioned that leather goods were cheap when they came out, but the price was much higher at the retail end.

The company's 2014 annual report writes straight out that Hermes's 2/3 product is produced in the company's internal factories - which means that the remaining 1/3 may come from other forms such as foundry.

It also shows that if you control the supply chain, you can guarantee that you can get all the high quality you want.

It can also keep the leather business running normally and sell the inferior quality leather to the third party.

At the same time, approachable brands such as Michael Kors, Kate Spade and Tory Burch have taken part in the market share of high-end brands.

The market share of Michael Kors in leather goods increased from 1% in 2008 to 6% in 2013.

According to the data of Paris Bank Securities Department, the super brand has basically abandoned the market of 500 euros (3402.6 yuan).

However, the profits of luxury leather goods may have been overtaken.

Unlike traditional luxury brands, light luxury giants do not seem to have to adopt the best quality leather, or more freely use smaller areas but perfect leather.