Trade show news

Trade fairs reflect industry trends

GDS smaller, but organisers positive

Well-heeled and elegant, footwear buyers from across the world, including South Africa, again made their way to the sprawling trade fair complex on the outskirts of Düsseldorf, the fashionable Westphalian capital on the banks of the Rhine river, for the March GDS & Global Shoe international trade fairs for footwear and accessories.

Twice a year, the latest trends, colours and footwear shapes (see the article on trends seen at the show) are shown to buyers from across the world, who come to see, learn (there are several seminars), catch up on what is happening in the industry (crisis, as in economic crisis, is a refrain) and meet friends.

Representatives of the well-known international footwear brands lining the wide passages (plenty of space for socialising), smiled positively (“it will get busier, its still early”). The daily fashion shows, introduced by international model Lily Cole on the first morning, were an elbow-thrusting fight for space, especially on the Sunday, when the shop assistants attended their conference in droves.

The roughly 800 exhibitors from 29 countries represented a 3% drop from the previous year. Visitor numbers* (31 000 buyers) were about 2 000 (6%) down from the previous year. This reflects global conditions in the fashion industry.

The lower visitor numbers were, however, due to leading retailers sending fewer buyers, not because retailers stayed away, says Kirstin Deutelmoser, director of the GDS & Global Shoes trade fair.

She also describes the fewer exhibitors as defying the cyclical downswing in the industry. “More than ever before the show offers all forms of trade a strong platform, not only for gathering information on the latest trends but also for scouting new trends, comparing merchandise and drawing inspiration.”

The show has a distinctive German flavour — many lectures were only in German, without translation — although nearly half the visitors to the GDS show came from 90 other countries. Apart from Germany, the top five countries represented by visitors were the Benelux countries, UK, Austria, Italy and France. Exhibitors were mainly from EU and European countries, with German distributors predominant, but there were also exhibitors from Australia and New Zealand, Turkey, Israel, US, Canada and Brazil as well as China, Hong Kong, Taiwan and Japan showing their ranges.

About a fifth of these visitors (6 200) also visited the Global Shoes sourcing show, combined with the GDS show for the first time. The approximately 310 manufacturers that exhibited came from 19 countries in Asia, the Far East, Europe etc.

“We have probably never needed GDS as much as we do today,” said Ralph Rieker, chairman of the Federation of German Footwear Industry. He warned that 2009 will not be easy for many in the footwear industry. “What we need today is ideas and new concepts. Trade fairs are the perfect location for trade and industry to exchange views, to take new courage, and to provide new momentum.”

But, despite the worldwide economic crisis “the labour market has shown itself to be robust, so that the buyer confidence is currently still positive,” he said. Employment in the German footwear industry grew by 5.3% in 2008 to more than 13 000 employees — the highest level for years. Consumer prices have remained, and will remain, stable so that buying resistance from this quarter is not indicated either, he reported.

However, the German shoe production of approximately 26.3-m pairs in 2008 was slightly down from 2007 (minus 1.1%), reported Manferd Junkert, GM of the Federation of German Footwear Industry. The production of outdoor shoes with leather uppers dropped significantly (9%), while the domestic manufacturing of less labour intensive sandals and safety shoes grew. Annual turnover fell 3.6% from €2.8-bn to €2.7-bn in 2008.

Shoe imports remained stable at 498.5-m pairs, an increase of 0.2%, with average prices increasing 1% to €8.86.

The anti-dumping measures to protect European manufacturers introduced in 2006 had no effect, says Junkert (also see p28). Despite restricting quotas, imports from China grew 4.9% from 252-m to 264-m pairs. Imports from Vietnam had the second highest growth (10.8%). China and Vietnam now have 68.8% share of the German footwear market, up from 60.1% the previous year. Imports from Asia increased 3.8%, or 14-m pairs, to 388-m pairs.

In comparison, shoe imports from the EU and other European countries fell 12.6%. Imports from Italy decreased from 21% to 5.5% of the market from 2007-2008. Imports from Spain dropped 23% to 5-m pairs.

Yet, footwear exports from Germany rose 10.9% from 141-m pairs to 156-m pairs in 2008 — with Poland as the top importer (15%). The average price remained static at €15.57.

He was optimistic that studies showing improved consumer confidence at the start of the year as a result of lower fuel and energy prices and a drop in the inflation rate would further strengthen the German footwear industry this year.

Women are by far the largest footwear market — with women buying about six pairs of shoes per year, compared to men buying 1.5 pairs.

According to Brigitte Wischnewski, President of the Federal Association of German Footwear Retail Trade (BDSE), the income of footwear retailers dropped about 2% last year, and about half the retailers lost income. However, 18% of companies participating in a BDSE survey reported an increase in turnover.

The turnover of the whole footwear market is about €8.5-bn, and retail turnover of about €6.4-bn therefore constitutes about 75% of the total.

“In the second half-year the effects of the global financial crisis began noticeably to affect the domestic market,” she said.

“The greatest concern for footwear retailers is currently the fall in customer frequency, something which 58% of respondents (in the BDSE survey) complained about. Second among current problems is income development, almost 50% of companies reported a decline here. Rising energy costs are also causing a headache, affecting 94% of respondents.”

As can be expected in the rainy, icy German winter weather, boots are the best selling footwear category. “Apart from the weather, fashion was the most important factor promoting sales of boots,” says Wischnewski. “Particularly when combined with jeans, they developed into a defining fashion image of the last season.

“Among young customers, demand for fashionable footwear such as Converse and Vans continues.”

Men’s (with a share of 16%) and children’s shoes (with a share of 12%) make up just half of the turnover achieved with ladies shoes.

According to the BDSE survey, 40% of German footwear retailers anticipate the same turnover as last year and 11% expect a rise in turnover in 2009.

“A five-year comparison shows clearly that the fluctuations in turnover in the footwear retail trade have been moderate. Wear and tear means that there is a steady demand for shoes. Women, in particular, want to keep up with fashion.”

Crisis, what crisis?
Outdoor and cycling shows buck the trend

Despite constant reminders in the European press that the economy is taking a turn for the worse, the news out of Friedrichshafen is upbeat: outdoor and cycling industry manufacturers appear determined to defy the current economic crisis and have already booked exhibition space for OutDoor Europe (July 16-19, 2009) and Eurobike (September 2-5, 2009) in record numbers.

The two recently completed Friedrichshafen exhibition halls (A7 and B5), increasing exhibition space to 85 000m², have already been filled, say Klaus Wellmann, MD of organisers Messe Friedrichshafen. Thus far, OutDoor has booked 707 exhibitors from 39 countries, representing a 10% increase over the same spring period last year (which was the biggest ever).

Perhaps not so surprising, says Rolf Schmid, president of the European Outdoor Group (EOG): “Our industry will benefit from the change in social values. More consumers are spending their money on recreation, their health and leisure time. People won’t be buying stocks with their money, they’ll be getting out into nature and enjoying life.”

Horst Penzkofer, head of trade show research at Munich’s IFO Institute for Economic Research, however, believes that this trend is unique. “Generally, the numbers of exhibitors and visitors at a trade show bear a direct relationship to the state of the economy,” he explains. “With the current recessionary conditions, falling figures would therefore have been expected.” But, as he points out, particular industries can experience growth in generally difficult circumstances.

Both the outdoor and cycling industries are benefiting from this emerging trend in the marketplace,” asserts Stefan Reisinger, project director of the OutDoor and Eurobike shows.

For example, Intersport, Germany’s leading buying association, broke the €2.4-bn sales barrier for the first time last year with outdoor, hiking and trekking (which together grew by 14%) as the major sales drivers. In general, the retail trade for leisure sport articles and accessories reported good to best-time sales figures for the closing European winter season.

Both the outdoor and cycling industries are sending positive signals and will be introducing numerous innovations this year, says Reisinger. He believes the outdoor industry’s growth in the current economic crisis is due to continuous technical development in recent years, driven by consumers’ increasing awareness about quality. Innovation & Technology will therefore be the theme of this year’s OutDoor Show, with a lecture series to support it.

The change in consumer behaviour — more and more people are adopting the bicycle as an alternative means of transportation — is also reaping benefits for Eurobike, Friedrichshafen’s second largest leisure and sport trade show. Thus far, 890 exhibitors from 40 countries have been registered for the September show, a figure higher than for any comparable time of year in the past.

Outdoor industry manufacturers as well as those of the cycling industry are now hoping that their substantial investments will translate into correspondingly high order figures made by trade visitors. A good omen is that retailers are also expressing optimism about their future prospects. Intersport, for example, reports that consumer readiness to spend money on health and fitness continues to grow at an increasing rate, which should translate into sales growth.

At the OutDoor show, the new halls A7 and B5 will be home to the Tent City, freeing more booth space in the other halls. There is also a new modern conference centre on the first floor of the new Foyer East, beside the exhibition access from the east. This offers exhibitors, associations, federations and media representatives more possibilities of organising conferences in attractive surroundings. The new Foyer East is fully integrated in the infrastructure network of the Messe, with WLan available free of charge in every corner of the exhibition site.

To reduce individual traffic (and resultant energy consumption and pollutant emissions) to and from the exhibition site, the shuttle bus services will be extended at the OutDoor 2009. The hotel buses will now be running twice in the morning and twice in the evening. This also applies for trips to and from the most important regional airports.

More information is available at www.european-outdoor.com and www.eurobike-show.com.