MONTREAL — Following two fairly strong seasons for fur sales in North America, retailers are concerned that double-digit increases in skin prices may put an end to the good times.
This story first appeared in the May 10, 2011 issue of WWD. Subscribe Today.
With that in mind, several retailers and manufacturers attending the North American Fur and Fashion Exposition here placed orders earlier than usual. The three-day show wrapped up May 3.
Mike Henig, owner of Henig Furs, a Montgomery, Ala.-based company that operates 30 stores, said, “I just got back from Hong Kong and China, and mink prices have skyrocketed between 40 and 60 percent in one year. We’re going to have to do a better job of buying and selecting product, because the economy is still soft. Next year will be harder and our margins will shrink.”
This past season, however, was a profitable one for Henig, who saw sales increase 12 percent compared with last year, despite a weeklong store closing due to ice storms this spring. Henig said his inventory is clean and he was able to avoid the usual markdowns in February and March.
“We do a lot of our own manufacturing and we bought skins in December, so we did well to avoid higher prices,” he said, adding that sheared mink and three-quarter-length coats sold well.
Henig was at NAFFEM to shop for excess inventory and to visit a local company that supplies all his hats and accessories.
Bill Ribnick, owner of Ribnick Furs in Minneapolis, said sales were “considerably better than last year” with anything midlength, sheared or reversible leading the upswing. As for what lies ahead, he said, “Mink prices were also up considerably, so we’re taking a smaller markup.”
Despite the higher prices at NAFFEM, stores were not looking for more affordable furs. Ribnick said the memory of last winter’s cold weather and fur is being viewed more and more as a green product continue to drive sales, he added. With no leftover inventory, Ribnick’s open-to-buy was higher this year and he was shopping NAFFEM for “fresh designs to broaden my selling categories.”
The story was similar for Andre Ferber, owner of Jacques Ferber Furriers of Philadelphia, who had a “much better season” compared with last year, with few pieces going unsold.
“We had few clearances as our furs were priced fairly. But prices are going to go up significantly next season,” he said. “However, the value is still there compared to other luxury items.”
David Kriegsman, owner of Kriegsman Furs in Greensboro, S.C., is also coming off a strong season, despite a fragile economic recovery and animal rights activists.
“We had a cold winter and, if it’s cold, we sell a lot of fur coats. We sold a lot of sheared, short coats of beaver, fox and sable. And we continued to buy throughout the season to resist price increases,” he said.
However, with numerous manufacturers predicting prices are heading higher, Kriegsman expects price resistance across the board. “Luxury items will still sell, but people won’t spend as much,” he said. “Sheared beaver will probably substitute for sheared mink as an example, and I’ll probably have to reduce margins next year.”
Business was up about 10 percent for owner Keith Rosenstock of the Canadian Fur Company in Pittsburgh, due largely to seasonably cold weather and an on-target buy.
“I sold a lot more sheared and reversible coats and fur-trimmed cashmere coats and less full-length fur coats and shearlings,” he said. “If a customer usually spent $4,000 to $6,000 on a mink coat, they’re now spending $3,000 on a sheared mink. I’m selling a lot of units for $1,000, such as shaved rabbit, which looks like mink.”
Rosenstock participated in Beautifully Canadian, a marketing program designed to identify quality fur apparel and accessories from about a dozen furriers, including Global Furs, Natural Furs, Wolfie Furs and Zuki International. “The U.S. has exported a lot of manufacturing jobs and the Beautifully Canadian program is the next best thing. If we’re going to lose jobs, I’d rather support our cousins up north instead of the Chinese,” he said.
Despite the price hikes for fur, Rosenstock said he was focusing more on brands than pricing, because consumers are willing to pay more for a recognizable name. “I went to the Coterie and picked up three recognizable U.S. designers,” he said, referring to the New York trade show held earlier this month.
With stores in Detroit and Bloomfield Hills, Mich., Hal Dittrich, owner of Dittrich Furs, said sales were flat due to the shaky economy.
“We’d have a good day of sales then the goods would be returned for nonpayment. We’re also different from most furriers, because full-length coats are still our staple,” he said.
Dittrich has more than 3,000 coats left over between his two stores, and specialty orders decreased from the average of 50 to 60 per season. Next season specialty orders will jump to $9,500 compared with this year’s price of about $7,000, he said.
“Prices just creamed us and we’re going to reduce markups on the new prices for next season,” Dittrich said.
Asked why fur continues to sell well even though prices are rising rapidly, Alan Herscovici, vice president of the Fur Council of Canada, said the message that synthetic furs are not as environmentally friendly as real renewable fur is resonating.
In addition, “Newer uses for fur such as accessories like handbags, scarves and hats also make fur more accessible,” he said. “But when mink prices are too high, retailers look for alternatives to maintain their higher price points.”
Qiviuk, Hilary Radley, MR3 Designs and Suprema 90 SPA were a few of the new labels among the 90 booths. Perhaps the most unusual was Qiviuk, which is sourced from the downy undercoat of the musk ox in Canada, spun and knitted in Peru, and then woven into sweaters, jackets and dresses in Italy.
Company president Fernando Alvarez said only a few fashion houses have worked with Qiviuk, including Hermès, Valentino and Brioni. The Qiviuk line is available in the U.S. only in the company’s boutique in Manhattan’s Plaza Hotel.