Personal Leather Goods, Except Women's Handbags and Purses

SIC 3172

Companies in this industry

Industry report:

This category covers establishments primarily engaged in manufacturing small articles normally carried on the person or in a handbag, such as billfolds, key cases, and coin purses of leather or other materials, except precious metal. Establishments primarily engaged in manufacturing similar personal goods of precious metals are classified in SIC 3911: Jewelry, Precious Metal.

The overall economic health of the personal leather goods industry, valued at $482 million in 2008, is tied to the status of the domestic leather production industry. This small segment and its parent category are affected by many of the same problems in manufacturing, labor costs, and competition with foreign-made products. The products manufactured by this industry are sometimes referred to as flatgoods due to their small dimensions. They are generally designed to fit into pockets or handbags. Such items include wallets and billfolds, coin purses, and key and cigarette cases, and they may be manufactured wholly or partially of leather, plastic, or fabric, or from a combination of these materials.

Wallets and billfolds have historically represented the largest production segment of this industry, although by the early 2000s the category consisting of travel kits, jewelry cases, vanity cases, compacts, and other personal items had overtaken the wallet and billfold category. Typically, manufacturers offer several product lines each season in a variety of colors and prices. Many of the products are interrelated, meaning consumers of both sexes can purchase a wallet and accompanying accessories in a single style at the department store counter, traditionally the largest retailer of such products. This industry category also includes such items as watchbands, compacts, and business-card cases, if made from leather.

The number of firms engaged in the production of flatgoods has been in decline since the early 1970s. Approximately 244 firms were classified as manufacturers in this industry in 1972, but by 1987 that number dropped 15 percent to 208. By the mid-2000s, there were fewer than 170 establishments in the industry. The largest number of establishments was located in California, New York, and Texas.

Since the early 1970s, the personal leather goods industry in the United States has been dramatically affected by foreign-made products. Due to the skilled nature of the work, labor costs for domestic manufacturers are relatively high. Foreign manufacturers, most notably in China, Korea, India, and Italy, can produce flatgoods at a greatly reduced cost due to significantly lower wages. Because of this, the U.S. consumer market for these products has become saturated with imported wallets, key cases, and eyeglass cases that have lower retail prices than their domestically produced counterparts.

Current Conditions

According to industry statistics, there were an estimated 479 establishments primarily engaged in manufacturing small leather articles. Valued at $481.7 million, the industry employed 6,023 workers. California, New York, and Texas were home to the bulk of manufacturers of personal leather goods. Top categories within this industry were manufacturers of leather cases, cosmetic bags, wallets, billfolds, cases for glasses, and jewelry cases.

Industry Leaders

Randa Accessories which owns brands such as Humphreys Accessories, Trafalgar Company, and Badanco Luggage, reported revenues surpassing $400 million in 2008 with 850 employees. Tandy Brands Accessories Inc.'s revenues spiraled downward from a high of $221 million in 2005 to $129 million in 2009 with 655 employees.

Tandy Brands was forced to cut its workforce by 17 percent after 2008 proved to be the most challenging year in its 17 years of business. For fiscal 2008, the company reported net sales fell 23.7 percent compared to 2007. The increasingly difficult economic situation had Tandy looking at every facet of its operations and reorganizing. The company planned to focus on its key products and doing away with the underperforming products. Difficult times called for difficult measures, thus both the president of its men's division and president of its women's were let go. "We are in an extremely challenging retail environment and it is imperative to have an agile corporate structure that can respond to meet today's market realities," Rod McGeachy, president and CEO told just-style in January 2009.

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News and information about Personal Leather Goods, Except Women's Handbags and Purses

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