Despite economic slowdown and political uncertainty in Western Europe, sales of bags and luggage remain resilient in the region. Luxury players continue to dominate, although competition from fashion players is rising. The democratisation of travel, and changing consumer lifestyles, with increasing social media exposure, flexible working arrangements and on-the-go culture, have bolstered the growth of backpacks, luggage and handbags at the expense of categories such as business bags and wallets.
Western Europe is the third largest region for value sales of bags and luggage, accounting for 16% of global sales, at USD24.7 billion in 2019. The UK, France and Italy represent over half of regional value sales, with the UK posting a high CAGR of 6% over 2014-2019, boosted by the strong performance of the luxury segment. In comparison, the regional CAGR was 2%, which reflects the instability caused by currency and economic volatility. However, growth in handbags, backpacks and luggage in particular continued to boost the performance of the category.
The healthy lifestyle trend has evolved beyond diet and fitness culture, as self-care transitions from a luxury to being seen as a necessity for most consumers. The health and wellness trend, combined with the increasing flexibility of working arrangements, continues to influence the fashion industry, fuelling demand for versatile and functional backpacks, which is set to record the highest value CAGR over 2019-2024, at 3.9%.
Accounting for over 30% of total sales of bags and luggage in the region, luxury handbags is the largest subcategory, and continues to record a strong performance. Sales in the UK were boosted by the weaker sterling following the Brexit referendum, whilst in Italy, France and Spain, tourists returned after a slowdown in 2016-2017.The outlook for luxury handbags through to 2024 remains positive, although in the short-term, travel restrictions imposed by Coronavirus (COVID-19) are likely to have a negative impact on the entire personal luxury goods market.
Accounting for nearly 20% of total sales of bags and luggage in the region, sales of luggage increased in recent years, benefiting from the democratisation of travel, product innovation, and marketing which increasingly positions luggage as a fashion statement. Luggage is set to grow through to 2024 despite the expected negative impact of the COVID-19 travel restrictions in 2020.
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