Mink Eases at Kopenhagen...,
but Collection Nears Sellout,
Dip Called Expected Correction,
Wild Fur Slips in North Bay,
Greek Crisis May Be Easing.

MINK PRICES EASED BACK A BIT FROM APRIL’S RECORD LEVELS AT KOPENHAGEN FURS LAST WEEK, AS BUYERS CONTINUED TO PICK THE SEASON’S OFFERINGS VIRTUALLY CLEAN. With this year’s auction schedule now in its final stages and consisting increasingly of breeders and lowgrades, buyers from Hong Kong and mainland China are showing no signs of a let-up in demand. Having filled much of their needs to take care of their export orders at the earlier sales, much of their current buying is believed to be earmarked for their domestic operations. Last week’s easings – and those in Finland the week before – are not expected to impact on wholesale garment prices, which already have advanced since the lines were introduced, but rather enable manufacturers to average down some of the record prices they paid earlier.

KOPENHAGEN’S CURRENT COLLECTION, CONSISTING OF OVER 5 MILLION MINK PLUS OTHER FURS, WENT ON SALE LAST WEEK AND WILL SPAN SEVEN DAYS, ENDING TODAY WITH THE BLACK AND WHITE TYPES. At presstime, only the mutation minks had been sold, but a price pattern appeared to be set and it was expected to carry through to the main categories as well. Starting with the silverblue and blue iris types, the males were showing about a 15% easing from their April peaks on a goods-for-goods basis, while the females were backing off only about 5% to 10%, according to buyers’ calculations in dollar terms. It should be noted that the Danish krone, in which Kopenhagen sells, had eased about 5% since the April sale, largely because of the European credit crisis. The male/female price-change discrepancy was attributed to a perceived backing-off by Russians and their Greek agents/suppliers on their usual buying of mostly males, possibly in anticipation of economic problems this fall/winter that could affect consumer buying.,

WHILE MORE INTERNATIONAL FASHION DESIGNERS THAN EVER HAVE BEEN INCLUDING FURS AMONG THEIR MATERIALS, THE DEMAND ALSO HAS BEEN FED BY INCREASING NUMBERS OF CONSUMERS IN SUCH COUNTRIES AS CHINA AND RUSSIA WHO ARE NOW ABLE TO AFFORD A FUR GARMENT. During their learning period, as the designers have become more acquainted with furs, they also have been discovering ways to use them in combinations and with other materials so that higher mink prices, for example, may be offset in such mixtures. This was evident at the Hong Kong Fair earlier this year, where it was reported that “...furriers found inventive ways to work and pair the materials to mitigate those rising costs”


Best , FurGuys

Mink Eases at Kopenhagen,
CEO: “Healthy Development”,
Buyers Call It a ‘Correction’,
Demand Is Still Strong.

IN WHAT KOPENHAGEN FUR TERMED A “HEALTHY DEVELOPMENT,” MINK PRICES AT ITS RECENTLY-COMPLETED JUNE SALE SLIPPED AN AVERAGE OF ABOUT 6% BELOW THE RECORD-HIGH LEVELS ACHIEVED IN APRIL. During the last two seasons, commented ceo Torben Nielsen, “we experienced a constant rise on mink skins and it appears that we now have reached the top. The price of mink is at a record high and, of course, there is a limit as to how high prices can get. To me,” said the head of the biggest seller of mink skins, “the price reduction is a healthy development because the trade is considering consumer ability to meet the high prices.” Nielsen, however, took comfort from the auction’s results, which demonstrated that the demand for mink is still high.

OVER 5 MILLION SKINS WERE SOLD FOR A TOTAL TURNOVER OF $46.3 MILLION AND BRINGING AN AVERAGE MALE/FEMALE PRICE OF $85.83 FOR THE ENTIRE COLLECTION, INCLUDING BREEDERS. This was about 8% below the April average, but the collections were not directly comparable, the most recent sale having included a higher percentage of smaller sizes. The fierce demand, Nielsen noted, is being driven mainly by the Chinese market. “The Chinese fur industry is experiencing a massive boom and centers for manufacturing and retailing are being built all over the vast country in the east, so both the emerging markets in Asia and the established markets like Europe, North America and Russia can be served.” For the current auction season, which ends in September, Kopenhagen expects to reach a total turnover of 10 billion DKK, or about $168.3 million. ,

THE DECLINE AT KOPENHAGEN CAME AS NO SURPRISE TO BUYERS, WHO HAD ALREADY EXPERIENCED SIMILAR DIPS AT THE RECENT AUCTIONS IN NORTH AMERICA AND FINLAND. Many viewed it as a correction, possibly one that was long overdue, considering how long the rise was sustained and the heights that were reached. It also was likened to frequent stock market ‘corrections’ that have followed steep increases in stock prices. But there also have been upward ‘corrections’ that have followed sharp declines. Those are often called ‘recoveries’, such as that in the fur trade in 2009 which followed the 37% mink price drop linked to the financial crisis of 2008.

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Service Business Lagging,
Incoming Storage Called OK...,.
but Cleaning, Repairs Slightly Down,
Record Heat Wilts Mink Kits.

FOR THE PAST TWO YEARS, THE NORMALLY SLOW SPRING-SUMMER MONTHS FOUND THEM BUSY ENJOYING THE RESIDUAL BENEFITS OF GOOD SEASONS THAT WERE SPARKED BY HARSH WINTERS. Customers flocked in with their garments, starting in April-May, looking not only to store them for the approaching summer, but also to clean them and make necessary repairs. Not so this year. In addition to having been dealt a winter that wasn’t, they’re now looking at a disappointing service season. The abnormally mild temperatures provided people with much fewer opportunities to wear their furs, thus sharply reducing the need for cleaning or repair. With charges for such services and storage normally accounting for as much as 35% of their total annual revenues – and generating far higher profits than their product sales – they see reason for concern. These operations, including the remodeling of old garments into fresh fashions, are what keep retailers and their staffs busy during the summer, the income more than offsetting overhead costs during a period of dull sales.

MEANWHILE, NEW FUR SALES IN JUNE, ONE OF THE WEAKEST MONTHS OFTHE YEAR, WERE DESCRIBED AS MERELY OKAY, ON A PAR WITH LAST YEAR. Those reporting slight declines tended to attribute them to a drop in traffic from storage customers, usually a good selling opportunity. During these slow months, retailers tend to devote most of their selling areas to the kind of new fashions and items likely to be purchased on impulse, but traffic is the key. Sales have been mostly in smaller, inexpensive items including accessories, but also sheared mink jackets and short coats as well as other furs.

NEW SEASON FOR FURS? There have been many attempts over the years to reestablish a spring season for furs, such as that which existed more than a generation ago when stoles and other small pieces were strong promotional fodder for retailers. Last week, as part of its spring-summer men’s collection, Italian fashion leader Prada included three mink items modeled by women. Produced in cooperation with Saga, they were a car coat, a short sleeved jacket and a vest, all with contrasting mink trim.

PEOPLE, PLACES & THINGS: The annual summer school and international equipment show sponsored by the Utah-based FUR BREEDERS AGRICULTURAL CO-OP will take place Aug. 10-12. Highlights will be the National Feeds seminar Saturday morning, Aug. 11, and a business seminar that afternoon. According to DRE SANDERS, National Feeds nutritionist, a farm panel will discuss such topics as feed, housing, reproduction issues and where North American farmers stand in relation to mink producers elsewhere. A barbecue will follow.

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Regards, FurGuys

FUR INDUSTRY NEWS UPDATE

Clearances at Sales Called High,
Demand Strong Despite Easing,
Record Year for Auction Houses,
Average Sets Mink Record at $94.30.

ANY CONCERN THAT THE RECENT EASING OF PELT PRICES FROM THE ALL-TIME RECORDS THAT WERE ACHIEVED THIS YEAR ARE A HINT THAT DEMAND IN THE PRINCIPAL MARKETS MAY BE SLOWING SHOULD BE FADING ON REPORTS THAT POST-AUCTION CLEARANCES ARE STILL RUNNING HIGH. Auction houses on both sides of the Atlantic Ocean are still enjoying the fastest clearances of purchases – many even before prompt date – in their history, strong evidence that the buyers are anxious for the goods. Also, that the buyers – mainly Hong Kong/China and Greece/Russia – are confident of the retail season ahead and have the capital to back up their convictions.

THAT PRICES HAVE BACKED OFF FROM THEIR HIGHS, MANY BELIEVE, WAS MAINLY DUE TO CHINESE BUYERS’ ANTICIPATION OF ADVERSE CONSUMER REACTION FOLLOWING CONSECUTIVE YEARS OF ADVANCING PRICES. That a leveling-off, or a smaller increase at retail, would now be in order. The coming season’s price tags will still be higher than last year’s, but the increase not as noticeable. Actually, Chinese manufacturers have controlled the advance in product prices by finding ways to mitigate their higher costs, such as pairing different furs and other materials. At the same time, however, China’s economy has been growing at a slower rate and both producer and consumer prices in many fields have been edging downward in recent months, another factor that may be giving pause to buyers at the fur auctions.

THAT PRICES OF MALE MINK HAVE EASED BACK MORE THAN FEMALES IS ATTRIBUTED MAINLY TO A SLOWDOWN BY RUSSIAN BUYERS, THE PRINCIPAL TAKERS OF THE BIGGER SIZES. Although the Russian trade has done well in recent seasons, strengthening their capital positions, they are said to be approaching their limits. In addition, the ruble has lost value against the dollar in recent months and doesn’t buy as much as it did a year ago and the Russian government is still exercising tight control over the outflow of hard currencies. Furthermore, the credit they have been getting from their Greek suppliers reportedly has been cut back sharply, largely because the latter – in the absence of bank credit due to their country’s financial problems – are working with their own funds and have limits.

Regards, Redfox

SUMMER ACTIVITY WINDING DOWN,
STORES WARY OF FALL PROSPECTS,
SHIFTING MORE EMPHASIS TO FASHION,
U.S. IMPORTS DOWN AGAIN IN MAY...,
BUT ITALY IS THE SOLE GAINER.


ASIDE FROM THE CHINESE AND RUSSIAN MARKETS WHICH MANAGED TO FARE WELL – AND ENABLED THEM TO MAINTAIN A HIGH FLOOR UNDER THE RECORD SKIN PRICES – RETAILERS ELSEWHERE EXPERIENCED A DIFFICULT FALLWINTER SEASON THAT WAS LARGELY ATTRIBUTABLE TO ABNORMALLY MILD WEATHER. They were particularly disappointed in view of their more optimistic planning that was encouraged by the two preceding successful seasons that had benefitted from normal – and even harsh – weather conditions. Now, after another lesson on the fickleness of Mother Nature, retailers are paying more attention to other factors as they view their prospects for the season ahead. While not ruling out the possibility of a cold winter’s return, neither are they betting too much on it.

MORE LIKELY, BASED ON EARLY INDICATIONS, THEY WILL BE PLAYING UP THE FASHION ANGLE EVEN MORE THAN BEFORE. This year’s ready-to-wear collections – and the recent haute couture showings – placed even more emphasis on furs, not only in garments and accessories, but also in trims and highlights even on dresses and footwear. And at least one top Italian house included furs (modeled by women) in next year’s spring-summer men’s collection. Retailers indicated early this year, before heading to the various international fur fairs, that they were more interested in new fashion than in playing safe with classics, which accounted for most of the inventory they were carrying over. That they meant what they said is evident in the latest U.S. data showing a sharp increase in imports from Italy, while those from all other countries are down.

PEOPLE, PLACES & THINGS: Hollywood’s famous Paramount Studios served as the backdrop for designer MICHAEL KORS’ fall ad campaign for his furs, other apparel, jewelry and accessories. The theme is old Hollywood glamour and jet set style, shot on authentic lots by photographer Mario Testino and casting models Karmen Pedaru and Simon Nessman as a modern-day Carole Lombard and Clark Gable, their fifth campaign appearance for Kors. The multi-million dollar global campaign runs August through October in all the leading fashion publications around the world, but also on a new website, destinationkors.com. The furs were produced by New York manufacturer POLOGEORGIS, whose other designers are Zak Posen, Chado Ralph Rucci, Chris Benz and Zandra Rhodes, in addition to the house label.


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Regards, Redfox

Fur Industry News Update

Mild Winter = Fewer Wearings,
NAFA Sets Wild Fur Campaign,
China Will Be Main Target,
Nova Scotia Plans Hard Rules


GREECE ENJOYS A SPECIAL NICHE IN THE INTERNATIONAL FUR TRADE, NOT ONLY BECAUSE OF ITS HISTORICAL POSITION DATING BACK TO THE 13TH CENTURY, BUT ALSO AS THE WORLD’S LARGEST MANUFACTURING CENTER SECOND ONLY TO CHINA. Today, it is the chief supplier of manufactured furs to the huge and still-growing Russian market and, as such, an important factor at the international auctions. Although Greek banks are no longer extending customary lines of credit, major manufacturers there so far have been able to operate using their own capital. But none is understood to have unlimited capital, which means that, unless their Russian and other accounts are ready to step up to the plate, these Greek buyers could reach their limits.

NORTH AMERICAN FUR AUCTIONS IS LAUNCHING A MAJOR CAMPAIGN TO PROMOTE WILD FURS WITH STRONG EMPHASIS ON THEIR ROLE IN FASHION. The program, in partnership with the Wild Fur Shippers Council, is aimed at keeping wild furs on the catwalks and in front of consumers, both in the media and in retail stores. According to Diane Benedetti, senior vice-president for marketing, the long-term strategy will include multi-level support to designers and manufacturers through its expanded Studio NAFA program in Toronto, as well as its outreach project around the world. In connection with the latter, NAFA has enlisted Studio Designer & Marketing of Italy, experts in techniques ranging from haute couture to mass merchandising, to teach those techniques. That team consists of Maria Antoinetta D’Errico, Mauro Campaini and Daniele Baviello, who have worked with top designers as well as mass marketers.

THEIR FIRST PROJECT WILL INVOLVE RACCOON AND HOW TO INCORPORATE THIS SPECIES INTO INNOVATIVE DESIGNS AT PRICE POINTS THAT WOULD MAKE IT COMMERCIALLY VIABLE. Introductory workshops in China will be held in Xinji Sept. 10-12 and Haining Sept. 13-16. The second phase, said Benedetti, will bring a number of other species into the project. There also will be other shows and events for the rest of the year in such places as Beijing, Hong Kong, Seoul, Moscow. St. Petersburg, Kiev, Dubai and Istanbul.

A FLAP OVER SANITARY CONDITIONS ON MINK RANCHES IN NOVA SCOTIA IS LEADING THE PROVINCE TO DRAW UP STRICT REGULATIONS GOVERNING THOSE CONDITIONS AND AT LEAST ONE RANCHER WELCOMES THE MOVE. The province is a major source of Canada’s mink production and residents in the areas where such farming is proliferating are concerned that odors and possible pollution from them will cause their property values to drop. The provincial government, mindful of the industry’s contribution to the local – and national – economy, is looking to manage the situation. Rules requiring fur farms to institute controls over storage, treatment and disposal of manure, water and carcasses are expected to be issued in the next few weeks. Failure to comply is expected to result in fines of up to $1,000 a day, possible seizure of the mink, or even jail terms.

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