Back from Bologna

Jeffry Guthrie-Strachan at Lineapelle
Jeffry Guthrie-Strachan at Lineapelle

A week after Bologna everyone is home now trying to digest what is going on in this complicated leather world. Most tanners are still quite busy but retail appears to be quieter around the world. Raw material is too high by a long way but a precipitous fall would create losses as customers renegotiate prices despite the tannery having already bought stock to cover their orders.

So like the rest of the world the leather universe waits to see what will come out of all the current macroeconomic issues running through our lives these days. We had a surprisingly good time in the recent recession and there is hope that demand from China, which helped so much over the last few years, will keep us from evil over the next few.  Bologna certainly started to indicate that this might be a false hope – China would also like a soft landing – and is trying to slow the growth in house prices and consumer consumption. Some smaller shoemakers from Wenzhou are disappearing as a result of China stopping the private loan system that has been so efficient in helping SME’s grow in the past. If you follow my Twiiter comments you will know there have even be suicides in this exciting city which is now so important in the world of leather.

Nevertheless in Bologna the mood was in no way pessimistic, rather it was cautious. And there was still time to get to the Corium Club reunion which is held early evening just as the show ends for the day. The Bologna reunion is good as quite a few students can get there from both Leather and Fashion. So the event was a better mixing moment than Hong Kong and perhaps in the future we can incorporate a small “job fair” element for a handful of students. A good place to get some advice from industry leaders and chat with people we do not get too many chances to meet. Even Dr Jeffry GS got into the Italian spirit with his cultured designer stubble.

What a better statement for our industry to make than that we will help students with the high costs of fees and accommodation at University and to find a career afterwards.  We are not there yet but our current situation is not far off.

Lineapelle itself tried to move out into the streets with a number of events to bring leather into the streets.  A good idea but from a marketing perspective it demonstrated the product orientation which has always been a problem for marketers in the leather industry. We love our product so much that we fail to try and understand what our ultimate customers actually know or think about it. As a result the materials put up in the city included long texts about the use of chrome tanning and a colour card with dark colours on a black background.  No consumer had the slightest chance of working out what dark greens or browns they should be looking out for. We overheard a couple of shoppers just look and laugh. So many people misunderstand the importance of proper marketing in our industry.

Mike Redwood
27th October 2011

Raw material keeps flying high

They always said it was pigs that fly but over the summer it has been raw material prices.  The big issue of small tanners and big customers has come up again and made the leather industry all over feel a bit like the old days of the garment industry.  Then an order was an order when the raw prices went up but just a forecast if the prices went down.  So if the prices went up tanners had to keep on buying but sell at the low prices and if the prices fell tanners who had bought the stock to cover found themselves in endless renegotiation as the season wore on.  Any determination to hold prices meant the leather came back with “quality” issues.  And in the garment trade if suppliers got at all insistent they just went bankrupt and restarted the next day under a new name.

Now the big brands and retailers are not as bad as the old clothing leather users but they do push their weight about and leave tanners with low margins and in some instances losses.  They need to learn that those days are over.  The famous phrase that everyone in the supply chain has to make money does actually mean something important. If new leathers are to be developed and the environment and employees fairly treated then tanners to have to be allowed to make a decent margin consistently and playing the bully to force prices down or wandering off somewhere else is no way to protect the future.

On the other hand the tanners need to give themselves more power and position their leather better. That is the concept behind LeatherNaturally!  Get into the DNA of the final consumer who after all is the one who decides the value of your leather and educate them.  In a way that coincides your leathers, perfectly made, to neatly fit with their expectations of a high quality, high performance material.  Sounds easy but so many tanners live a product oriented life to the extent that talking to a customer beyond partners and close family is anathema. “Market orientation is for the drinks industry, not for tanners”.  You do not need an MBA to know that this attitude has to change or your business will die.

Lineapelle and Tanning Tech

Many of these things will play out in Bologna next week. It is going to be a very important fair. For the University there will be two stands:

Hall 35, stand D47 in Simac/TanningTech, staffed by me and Jeffry, representing the Institute for Creative Leather Technologies
Hall 21, stand C90, staffed by Caroline Southernwood, Jane Mills and colleagues, representing the Division of Fashion and Textiles at The School of The Arts

If you would like to arrange a meeting with Mark or Jeffry you can call +44 7545 420059.

If you would like to discuss Fashion, Textiles or Footwear Design please contact Caroline Southernwood via e-mail at caroline.southernwood@northampton.ac.uk

As in previous years, we have arranged a Corium Club Reunion at the Starhotel Excelsior Bologna, opposite the railway station:

19 October, 18.00 – 20.00
Starhotel Excelsior
V.le Pietramellara, 51
40121 Bologna

We are hoping for another good attendance for an event that seems to be developing strongly in the calendar. It is good as the Starhotel location opposite the station is a good spot to meet after the show before going on to dinner or taking the train to Florence (as quite a lot do).  See you there!

Mike Redwood
11th October, 2011