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Identifying Regional Stars in Bags and Luggage: Europe

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This last installment of a three-part series analyses the best performing regional bags and luggage brands in Europe. Western Europe accounts for nearly 80% of Europe’s total value sales, and thus directed the competitive environment in 2012. 

Deep-rooted influence of luxury brands in Western Europe

Home-grown luxury brands are vital to the bags and luggage environment in Western European markets such as France, Germany and Italy. Louis Vuitton continues to increase its influence on bags and luggage sales in France, and was responsible for nearly a fifth of all sales in 2011. Relying almost entirely on luggage, German luxury brand Rimowa is one of the leaders in its home market.
Italy’s ongoing economic concerns did not lead to declines in home market sales for Prada and Salvatore Ferragamo, two brands which are concentrating on extracting value out of tourist expenditure in the country. Growth for both brands outpaced that seen by mid-priced brands such as Furla and Tucano over 2006-2011. In the UK, Mulberry registered excellent growth in its home market. It is expected to be the largest handbag brand in 2012, overtaking mid-priced Radley. Italian luxury brands Prada and Bottega Veneta were among the fastest growing bag brands in France and Germany over 2006-2011 and are also likely to lead growth over the forecast period.

Contrast with Turkey and Eastern Europe

While most markets in Western Europe continue to be led by luxury brands, Turkey presents an entirely different landscape. Domestic mid-priced brands Desa and Matras are extremely influential, and are known to offer high-quality products at affordable prices. Marketing campaigns from market leader Desa include advertisements featuring Turkish celebrity Seda Sayan, as well as the use of fashion blogs to attract new consumers. The company owns its entire supply chain from manufacturing to retailing, and plans to further increase its outlet network in 2013. Although Louis Vuitton and Burberry garner substantial sales from Turkey, no luxury brand has been able to challenge the leadership of local brands.

Eastern Europe, on the other hand, presents virtually no dominant manufacturers as the competitive environment is highly fragmented in all markets. Across Eastern Europe, Ukrainian brand Derby is the only one expected to account for more than a 5% share of its country’s bags and luggage sales in 2012. Regional sales for mid-priced brands Guess and Furla were higher than those of luxury brand Gucci in 2011, a rarity given the relatively global appeal of the latter.

Performance of regional brands across the world

After the widespread global recession of 2009, several key markets in Western Europe experienced contracting GDP in 2012 while growth in China, India and Brazil also slowed. Despite these setbacks, the luxury segment increased its share of global bags and luggage sales throughout the review period. This trend was spearheaded by Prada, Michael Kors and Bottega Veneta, all of which invested extensively in expanding their respective retail presence. However, regional mid-priced brands remain vital to the competitive landscapes of nearly all regions other than Western Europe. US-based Nine West and Kate Spade, Brazilian brand Primícia and Australian-based Oroton are among the prime candidates likely to expand their respective regional presence over the forecast period.

Note: Review period refers to 2006-2011, forecast period refers to 2012-2017.

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