Luggage and Leather Goods Stores

There are 2,341 luggage and leather goods stores in the United States, according to D&B Sales & Marketing Solutions statistics. After years of dismal sales, the travel goods industry, of which luggage retailers are a major sector, saw U.S. sales hit a record of nearly $21 billion in 2006, a fivefold increase from the $4 billion in sales in 2004. While retail sales of luggage and personal leather goods were nearly $4 billion in 2006, the overall number of pieces sold fell versus 2005 sales.

Luggage and leather goods stores employed nearly 11,000 people in 2007. As specialty retailers, all of these businesses carry narrow product lines, but many offer deep selection within those lines. Often, luggage and leather goods stores specialize in either leather apparel or gift items. Many of these stores are located in discount malls and airports. The industry leader, Wilsons Leather, employed 3,461 people and reported 2007 sales of $321.3 million. In 2007, Wilsons operated 280 mall stores, 115 outlets, and approximately 12 airport stores. In recent years Wilsons Leather has struggled and as a result has seen more than 100 stores closed and more than 1,000 jobs lost.

According to data reported by D&B Sales & Marketing Solutions, the total number of establishments engaged in the retail sale of luggage, trunks, and leather goods fell to 1,997 stores, as did the total number of employees to 10,501 workers, however, sales increased to an estimated $474.9 million in 2009. The luggage, and leather goods stores category held 58.3 percent of the industry share and more than half of the industry sales totaling $198.8 million. Leather goods, except luggage and shoes category was responsible for 20.8 percent in market share, while luggage, except footlockers and trunks constituted 30.4 percent of the industry total. The bulk of luggage and leather goods stores were scattered throughout California, New York, Florida, and Texas.

The industry is served by the National Luggage Dealers Association. Founded in 1925, this trade association continues to represent retailers of luggage and leather goods around the country. The association's primary function is to produce promotional material and relevant industry information for its members. Through the efforts of both this organization and the leather producers, the retail luggage and leather goods industry is well organized on a national level, staying in constant contact with the leather producers and manufacturers.

Retailers maintain close relationships with the leather producers to gain a better understanding of customers' desires. Often, the producers hire fashion experts to advise retailers in future fashion trends in leather. The leather producers also provide promotional material and samples to retailers well before the leather articles are available to the public.

During the late 1990s, luggage and leather goods stores faced a challenging business environment. Although people traditionally viewed fine leather as a luxury, the 1990's consumer placed a premium on value. Therefore, in an effort to remain competitive, industry leaders focused on providing customers with good values without compromising quality. Some businesses used strict cost control and streamlining as a means to this end, while others relied on competitive leather sourcing from China, India, and Brazil since these countries supplied quality leather goods at low cost. By the late 1990s, over half of the leather and leather products sold in the United States were imported. Since labor costs represented a high proportion of total production cost for leather goods, it was more cost-effective to import leather goods from developing countries with lower wage rates.

Like most retail segments, luggage and leather goods retailers used technology and automation to improve efficiency. Retailers also needed to attend to customer demands and desires because U.S. consumers in the 1990s shunned hard-side luggage, preferring lighter and less expensive soft-side goods, which became an airline requirement by the mid-2000s. In addition, by 2004, some retailers were offering custom options online for personalized luggage.

Changes in the regulations for carry-on baggage in air travel continue to provide yet more challenges to the luggage industry. In the late 1990s, Anne DeCicco, president of The Luggage and Leather Goods Manufacturers of America, stated "Luggage producers must be certain to accurately and truthfully label products within the parameters of the new carry-on baggage environment that has resulted from the Federal Aviation Administration's 1998 Advisory Circular on Carry-on Baggage and from changes the domestic airlines have implemented in their respective carry-on programs. Luggage manufacturers that use terms such as approved carry-on bag or approved by the FAA or that use incorrect sizes can be charged with fraudulent or misleading advertising by the Federal Trade Commission." By 2007, luggage weight restrictions enforced by domestic airlines meant that U.S. consumers are demanding more versatile, lightweight luggage options. The trends seen at the 2007 Travel Goods Show highlighted lighter-weight luggage that is more durable. Four-wheeled luggage was also rising in popularity were bright colors and patterns. The overall trend in luggage into the late 2000s was expected to reflect consumer desire for versatility, durability, and portability.

According to Michele Marini Pittenger, president of the Travel Goods Association (TGA), "Travel is a category that took a big hit during the last recession, and of course travel goods took a hit as well, with 2009 travel goods sales at their lowest levels of the post-9/11 era." Based on units, luggage sales plummeted 28.6 percent to $17.4 billion in 2009, while dollar sales fell 23 percent compared to 2008. Personal leather goods sales also fell 15.8 percent, as did demand for travel and sports bags with sales falling 13.9 percent year over year as business and leisure travel dwindled. In another report released by market research firm, Global Industry Analysts, Inc. agreed and stated "Luggage manufacturers as well as retailers worldwide continue to struggle with lower margins owing to the decline in growth of luggage sales."

In the late 2000s luggage stores appealed to their consumers by offering luggage that offered both comfort and style. With security a top concern among consumers, luggage retailers offered lightweight luggage with extra focus on locking systems geared towards overseas travel. During the first half of 2010, industry sales began to slowly pick up as both business and leisure travel showed a slight turnaround.

In February 2008 Wilsons Leather shed 160 mall-based stores and eliminated 1,000 jobs to cut costs as the company continued to struggle. In an attempt to bring the company out of its slump, the company planned to focus on women's accessories. However, shortly thereafter the company announced that it was going out of business in July of 2008 with the final 100 mall locations slated to close in October. Following a year of trying to "reinvent itself" had become almost impossible as"...economic woes accelerated the company's demise," cited from an article published in the Star Tribune.