Exotics: Limited Supplies Get Under Designers’ Skin

Almost every accessories brand is offering exotic skin bags, from alligator to ostrich.

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Almost every accessories brand is offering exotic skin bags, from alligator to ostrich.

This story first appeared in the July 16, 2007 issue of WWD.  Subscribe Today.

The result: a smaller supply of grade-A skins and heightened competition for designers to get them. Despite limited materials and soaring raw skin costs that have increased retail prices, the exotic handbag business shows no signs of slowing.

Accessories designer Carlos Falchi has seen a drastic change in the market in the last five years.

“The problem is that today, everyone wants to be a handbag designer and wants to touch some kind of reptile,” said Falchi, who has been using exotic skins for more than 30 years. “For a lot of people, it’s difficult to get. It’s very competitive and expensive.”

Falchi said his costs have tripled. Five years ago, he would have spent $9 on one centimeter of alligator skin. It now costs him $20 to $25.

“The price of alligator has gone up 40 percent in the last two years,” said Christine Plott Redd, sales and marketing director of the Griffin, Ga.-based American Tanning & Leather Co., which provides exotic skins to brands such as Proenza Schouler and J.Mendel. “But the price is cyclical. We buy in feet and sell in centimeters. It’s been as high as $70 a foot and as low as seven dollars to $10 a foot. Right now, we pay about $53 a foot for an entire raw carcass, which sells at $28 a centimeter. But this is first-grade skin. There’s plenty of skins available, but when you get into wanting good skins, that’s the problem. There are only so many first-grade skins.”

The U.S. government allots farmers only a limited percentage of alligator eggs for skinning in order to secure the species’ survival, making it an even smaller pie to divvy up for designers, Plott Redd said.

To ensure his share of top-tier skins, Falchi began working directly with suppliers. He is a partner in a tannery in upstate New York and consults on others in New York and Europe. He also owns a crocodile farm in South America.

“All of my skins, from alligator to python, I have access to,” he said. “They are our own farms, so my supply is always available.”

Santiago Gonzalez, president of handbag company Nancy Gonzalez, operates his own farms in South America and rarely finds a problem in getting what he needs.

“I usually have priority because my volume is so enormous,” Gonzalez said. “I provide 80 percent of my own skins, but we work 100 percent in exotics. Our volume is huge. I made 28,000 bags last year and this year, hopefully, 33,000. So when I buy the amount of skin I use, I have some leverage in the buy.”

While Gonzalez doesn’t sense any tightening quantity-wise, he feels greater pressure in obtaining the highest-quality skin.

“The quest is to find the best skins,” he said. “If you have your own tannery, you’re more protected, but if there’s an amazing group of skins coming in from Asia, I can guarantee you Hermès will buy it and so will we. Ideally, the best skins in the world come from my tanneries. But if not, I have to go out and get them.”

The luxury firms aren’t taking any risks, either. Fred Distenfeld, owner of accessories firm LAI and an exotic skin manufacturer for more than 50 years, said brands such as Louis Vuitton, Hermès and Gucci all have secured their share of the market in the last eight years by buying and employing their own tanneries, some of which other designers once relied on.

“These brands are the powerhouses of the luxury world and they have to make sure their supplies exist,” Distenfeld said. “The problem is not in the skins themselves, but the quality for the people who want the best possible skins.”

Buying isn’t easy for anyone, and even the industry’s biggest names have to plan ahead.

“Today’s market has forced the major brands to get organized, become vertical and partner with two or three tanneries and say, ‘OK, we want to make sure we have our supply,'” Plott Redd said. “Where before they could go to a warehouse in Italy and buy whatever they wanted, now they go in and classic colors like black and brown aren’t there.”

John Truex, designer and co-creative director of Lambertson Truex, is getting his orders in earlier these days.

“It is a bit more challenging now,” he said. “You have to think more in advance when planning out the purchasing of materials, but it’s something you’re aware of and you do. If I wait until the last minute for color development or design change, I may find challenges, but we adjust ourselves based on the market.”

Truex also adjusts to the rising cost of skins.

“Like all raw materials, costs have gone up,” he said. “And because of that, we have to look at how we design the bags and balance small versus large bags to accommodate for the price increases.”

For the younger brands that lack the financial arsenal with which to compete against the big guns, the key to securing skins is by maintaining strong relationships with tanneries.

Darby Scott’s exclusive line of alligator, lizard and karung handbags is supplied by American Tanning & Leather Co.

“The market has been pretty competitive in the last couple of years, but for us, we’re protected by our suppliers,” Scott said.

Plott Redd said, “It’s about relationships. We work with people we have relationships with. Would I love to take on Chanel or Louis Vuitton? Absolutely, but I would never in a million years turn my back on the people we’ve been with for years.”

Scott and Plott Redd’s relationship began four years ago.

“She’s a small fish,” Plott Redd said of Scott. “Her business has been impacted. It’s difficult. She buys skins and hopes they’re available. She’s not funded by LVMH, so someone like her gets creative with her skins, using different finishes.”

Scott, who works in center cut (meaning she doesn’t piece her bags together with different skins, but requires one big piece for the entire bag), often has to forego doing certain bags if she can’t get top-graded skins in the right sizes.

“The quality we’re looking for can be trouble,” she said. “Our suppliers can’t always guarantee that we’re going to get 100 percent of what we need. When things are dyed and tanned, they don’t always come out perfect. There is a certain amount of falloff.”

But whatever a brand’s volume, buying exotic skins doesn’t come with guarantees, and such is the reason for their appeal: the idea that the bags are natural and one-of-a-kind.

“People are looking for something unique, that’s real luxury,” Gonzalez said. “The same clutch in the same color is not the same bag. Each product has its own personality. That’s why people are attracted to skins.”

Despite the increasingly crowded market, handbag designers are having a stellar year with exotic skins, proving that, for the moment, there is room for everyone, and that, as more designers jump on board, more buzz surrounds the category.

Designer Lelya Awati, whose Bali-based exotic handbag firm has been in the game for five years, reports her business has been doubling every year.

“It’s a reflection of the demand that’s out there and the comfort of the American market with the return of skins,” she said.

Falchi’s exotic business also has doubled in the last two years, and LAI’s sales have tripled in the last three to five years, mostly in exotics.

“Our products are very much in demand and our customer base has grown enormously,” Distenfeld said.

Lambertson Truex and Nancy Gonzalez have reported an increase in fall wholesale orders. Scott also stated that her alligator and expensive exotics are selling ahead of plan.

As for whether or not the exotic skin market will continue to flourish for everyone, designers remain optimistic.

“There are enough skins for everybody,” Gonzalez said. “It’s a scarce commodity, but for a scarce clientele. There are enough skins for the people buying these products.”

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