As Demand Outstrips Supply, a Shortage of Fur is Looming

Because use of fur has skyrocketed on every fashion level in the season just ending and with spiraling demand in newly emerging domestic markets in China and Russia, there is a growing fear that in the near future there will be insufficient goods to go around.

"There is no question the demand is exceeding the supply in three major markets," said Michael Mengar, president of North American Fur Auctions. "In the domestic markets of Russia and China and in North America, we are seeing that. The prices have risen sharply in keeping with the demand, and our ranchers are finally seeing some benefits."

His view was echoed by Dale Thiesen, who handles international marketing for American Legend in Seattle. Legend has devoted considerable attention to China, and Thiesen says the expansion of the domestic market there has been phenomenal, plus the increased exports they have been sending to neighboring Russia.

Fur has always commanded pride of place in high priced haute couture and in its new manifestations, light of weight, colorful and sporty, it has become a trans seasonal item that every major designer in the world is using, including many who never used it before. Further down the line real fur has ousted faux in the outerwear and sportswear categories, with many first-time manufacturers using mink and fox in record volume for trimming fabric and leather garments. Still others make entry level fur garments in a variety of skins, extensively rabbit.

Fashion Rainwear

The fall collection of London Fog is a case in point. It features mink, fox and lesser skins for the first time on a collection of classy women's fashions that defy identity if the label isn't checked. Mackintosh of Scotland, the grand daddy of high end rainwear, is offering part of its line with detachable fur trim and lining, and New York's I. Spiewak & Co., one of the largest manufacturers of uniforms and rugged outerwear and workwear for men, has become the top buyer of coyote pelts for trim.

The new found prosperity that has created substantial domestic markets for fur apparel and accessories in China and Russia has forced up prices as much as 50% for certain skins at auction in North America and Scandinavia, and the racks have been left bare.

"If things keep going the way they are, there will definitely not be enough goods to go around," said veteran fur buyer and broker Dean Brenner of Delta Furs, New York.

Brenner, who has been in the business 28 years, says the fur dealing community is divided in to two categories: Eternal Optimists and Eternal Pessimists.

"The Eternal Optimist says 'This is fantastic, things have never been this good.' The Eternal Pessimist is convinced that 'Something is about to happen to derail the boom'," says Brenner, who admits to being an optimist, but nevertheless keeps his fingers crossed.

Outside Forces

"We are very much at the mercy of outside forces," said Mengar. "The economy, as is presently impacting western Europe; the weather and, last year, it was a disease."

"Looking back," added Brenner, "each time a groundswell takes hold, something comes up. From 1995-98 the Russians commanded the market, but they never took up the goods. In 1987 it was the stock market collapse. Going back to the 1970's there is this cyclic pattern of disaster. When the unexpected happens, all gains slip away."

After recent sales in Helsinki, Copenhagen, Ontario and Seattle, 70 to 80% of all goods, especially the choicest skins, is in the hands of the manufacturers, who either bid on it themselves or dealt through brokers like Brenner. North American Fur Auctions has a sale coming up May 17 to 20 in Rexdale, Ontario, and American Legend is offering 1.3 million mink pelts in Seattle May 25-27. These will be less than top quality for the most part, but the view is that most, if not all, will go in brisk bidding, with Chinese and Russian buyers leading the pack.

Even Wild Furs

Even wild furs are hot items in the current market.

They are much favored for trimming, and Fur Harvesters of North Bay, Ontario, will have a sale with substantial offerings beginning May 14, and maintaining its new status as a growing player, the auction house will host a widening corps of international buyers.

"We don't have the final list of offerings yet," said fur grader Ed Ferguson, "but there will be a heavy volume of raccoon, which is much favored for trims; a fairly large collection of marten, which is North America's wild sable, and some lynx, which is in great demand for trimming."

North Bay is a three-hour drive from Toronto on good roads and six hours from Montreal, so Canadian and U.S. buyers will be there, but in keeping with current demands, so will contingents from Hong Kong/China and Russia.

Once an outpost, North Bay is now a pleasant little community, easily accessed and with most of the leading hotel chains represented. Fur Harvester sales have a relaxed atmosphere which appeals to international buyers, and its racks were cleared at auctions in December and February.

Russian Buyers

Ferguson said that the February sale saw 10 buyers from Russia, six of who had never been there before. Previously Russians had been content to get those wild furs through brokers or in many cases, buy them in finished garments from Canadian or Greek manufacturers. Now the trend is to buy the raw materials and do the value added work in Russia.

Fur Harvesters recently concluded an agreement with trapping organizations in the Yukon, Northwest Territories, Nunavut and northern Quebec, which provides a volume of marten pelts, which vary from coarse to extremely high quality, depending on their source.

Some even find their way in to higher priced garments.

"Otter is also much in demand," Ferguson said. "There is never much of it, and the darker pelts do not command high prices, but the lighter ones, which are quite silky, are highly coveted."

For the moment this increased demand has not prompted increases in trap lines, but it has boosted trapper earnings because prices have spiked.

Truly Global

Like apparel generally and the leather market in particular, the fur trade has become truly global. Much of the fur bought in North America will come back attached to outerwear and fabric coats made in China or Eastern Europe, but an increasing volume of fur purchased by Chinese and Russian buyers will be absorbed by their newly energized domestic markets. That is why Mengar, Brenner and others see the overall supply becoming inadequate.

In entry-level garments the rex rabbit and other furs may originate in China, and a trend is shaping up in the People's Republic to enlarge their mink ranching industry. Chinese buyers have been soliciting purchases of living animals in North America and Scandinavia to build up their own domestic source of supply, and some have even made offers to buy North American mink farms.

"We hear a figure of four million mink being raised on Chinese ranches," said Thiesen, "but there is no way of knowing what the true picture is. Some of their domestic pelts may find their way out to North American or European markets, but we cannot even know how many."

Mengar believes any increased pelt production in China will go to their domestic market, and he says that is not a matter of concern, because raising mink or other fur bearing animals is difficult and takes time. Meanwhile the Chinese are omnipresent at western auctions, determined to take away the lion's share of skins, and forcing prices up in the process. A secondary problem is the irresponsible attitude of some Chinese manufacturers who ultimately do not meet timetables for filling North American orders for finished garments because they had better offers domestically.

For further information contact: Fur World, Creative Marketing Plus, 19 West 21st Street, Suite 403, New York, NY 10010; Tal.: (212) 727-1210; Fax: (212) 727-1218; fharrow@creativemarketingplus.com.

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