Germany’s footwear and leather goods sector took a heavy hit from the coronavirus pandemic in 2020 and the impact of the crisis is expected to continue to be felt this year, according to reports from the Federal Association of the Shoe and Leather Goods Industry (HDS/L)

In the footwear industry, German shoe manufacturers with 50 or more employees saw their revenues dip by 8.4 percent to €2.8 billion, down from €3.1 billion in 2019. The most hit were the manufacturers of fashion shoes, which suffered a 25 percent sales drop, according to HDS/L.

The leather goods industry took a harder hit, with sales falling by 22 percent to €465.3 million in 2020, due to the closing of stores caused by the pandemic and a sharp decrease in travel activity, that weighed on suitcase sales.

In the footwear industry, domestic sales dropped 8.6 percent from 2019 to €2.4 billion.

Exports also fell significantly, both for footwear and leather goods. A total of around 293.9 million pairs of shoes were exported from Germany in 2020, down more than 14 percent from the previous year. The value of shoe exports fell by 10.8 percent.

While exports to the main foreign markets fell by a double-digit percentage, according to the trade association, exports to Poland - the biggest purchaser of German shoes with an export share of 18.9 percent - dropped only by 7 percent. 

The footwear industry is also facing strong pressure from the U.K.’s exit from the EU.

The impact of the pandemic on employment at footwear companies with 50 or more employees, however, was still limited in 2020, falling only by 3.1 percent to 15,500 people thanks to the government’s short-time work allowance.

The trade association expects an “extremely challenging year” in 2021 due to extended lockdowns. Online and click & collect sales will likely fail to compensate for the expected drop in sales in physical stores.

Two thirds of German shoe and leather goods manufacturers expect sales and profit to further drop in 2021.

Children’s shoes, safety shoes, sports shoes and orthopaedic shoes as well as outdoor rucksacks outperformed so far, helping cap the losses during the coronavirus crisis, but for manufacturers in the fashion footwear segment the situation looks particularly grim.

According to HDS/L, around half of the shoe, leather goods and fashion stores will not survive the crisis, with dire consequences for footwear and leather goods manufacturers.

Photo: © Roman Kraft on Unsplash