Some economic events go beyond the sense of the business, emitting a recovery signal for entire countries and sectors. The Milan design week, celebrated in April, has been one of those events. Boasting great visitor numbers – more than 372,000 with a 4% growth on 2014 – the occasion also coincided with Eurocucina, the Salone del Mobile and other events in the city, highlighting the economic strength and design creativity applied to the leather-affiliated sector of home furniture, which has started to see growth after years of difficulty accompanied by ruthless competition between leading manufactures.
Among the most beaten specialisations during the recent drop in leather’s market share, was certainly leather-upholstered furniture. However, the products’ producers still continue to play a central role in the furniture world. According to the ranking by Pambianco Strategie di Impresa of the top 20 Italian design companies by revenue in 2015, the podium is composed of three brands that use a lot of leather.
The first position is occupied by Natuzzi, with revenues of €488 million and an increase of 6% on 2014, ahead of Molteni (€319 million, +10%) and Poltrona Frau (€300 million, +2%). Among the top ten Italian players, six companies are leather-oriented (the others are Poltronesofa, Chateau d’Ax and B&B Italy) and all are growing. In addition, out of the top ten, the top-performer brand is another company specialised in leather upholstery, Club House Italia, which achieved an increase of 28% thanks to collaborations with luxury groups such as Fendi, Trussardi, Bentley and the newest licence presented in the last Salone, Bugatti.
Up, up and away
European leather upholstery seems ready to restart doing bigger business and looking with confidence to the market, but it is clear that what happened in the past few years was not a simple ‘stop and go’. The leather furniture crisis broke out well before 2009 – the last golden years can be considered as those between 2000 and 2002, before the system suffered due to high leather prices and Chinese competition – and has fundamentally changed the logic of the product, with the decline of the leather sofa and the increase of other leather-upholstered products.
The Italian brand Poliform, up 12% in 2015, probably represents the most significant case study for the inclusion of high-quality leather inside and outside of the wardrobe. Meanwhile, the distribution process has changed, with the crisis of traditional retail and the spectacular growth of the contract business for hotel, apartments and public spaces; today, this business sector exceeds 50% of sales for many high-end companies.
Overall, those changes resulted in a sharp volume decline for the tanning industry and a simultaneous increase in quality. Unic, Italian tanners association, estimate a further decline in leather production for furniture for 2016, which in 2014 accounted for 15% of the total volume.
History lesson
In 2005, Italian tanneries produced more than 50 million square metres of finished leather for furniture; in 2014, only 18 million. So the question remains, what kind of leather is being produced by Italian tanners now? For this, Salone del Mobile was able to provide some answers.
The key word for the high-quality ranges is aniline. The furnishing brands are relying on precise themes to be developed, with the goal of obtaining qualitatively perfect leather and, with regard to design, easily recognisable by their clients. Among the companies that have been most convinced by the supply side, one can cite the cases of Poltrona Frau, which created one of the most beautiful stands at the event and that, during the Salone del Mobile, announced the acquisition of a leading brand of outdoor furnishings, Janus et Cie.
Among the most compelling collections seen were those of Flexform and Minotti; the latter in particular came off with a contemporary and minimalist style that characterises its production’s goal to warm hearts with new design ideas. The lodging of a branded house was enriched with new collections of Club House Italia, with stylistic excellence peaks for Fendi Casa, and JC Passion with the brand Roberto Cavalli.
Style and substance
For style, as was seen at the show, one of the most important responses is the partial return to sobriety, as a direct consequence of the decline of markets demanding ostentation (such as Russia). Therefore, it has become prudent to rein in excessive design features, focusing on the intrinsic value of the product.
These considerations, which naturally lead to the choice of excellent materials, collide with two factors: the price of the item and the knowledge of the material by the end customer. Concerning the first factor, furniture business suffers in comparison with its automotive competition in purchasing, holding high prices of the raw material and relieving the market standard raw hides, with perspectives from here to five years of further increase. Furniture tanneries try to defend their position by increasing the range of items and colours but this strategy means higher prices, which are not always accepted by customers.
This brings us to the second aspect, the knowledge of the material, which is a matter of long standing. If there is no awareness of the differences between full-grain and stucco/buffed leather, then it’s difficult to ask customers to pay more for a similar (in their opinion) material. They will continue to favour articles such as the popular stampa dollaro, based on South American hides or European lower grades that are 1.3–1.5mm thick, which constitute the bulk of the work still done at Arzignano.
For now, Milan design week and the surrounding events have seen a hive of activity that can be deemed as encouraging for the leather upholstery image as it reshapes itself for the modern market and consumer.
