Jan 12, 2010
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Cold weather and growing sales mock death of fur

Jan 12, 2010

By Eva Lamppu

HELSINKI (Reuters Life!) - In a warehouse outside of Helsinki hundreds of buyers gathered to bid in a three-day auction of mink, fox and other furs just before Christmas.

Any worries about the ailing global economy, the threat of global warming, or the fading popularity of fur as fashion were firmly left outside to chill in the snow.

Bidding was brisk, and by the end of the auction all pelts were sold, compared to sales of only 30 percent of stock last year. Organizers said sales roughly tripled to 39.5 million euros ($57.3 million) against last year, with prices up -- by a third on average -- since an auction in September.

"Demand and supply are in a good balance, and there is maybe slight overdemand, which supports price levels," said Chief Executive Pertti Fallenius of Turkistuottajat, which says it is the world's only publicly listed fur auctioneer.

While the fur market looks to be challenging in the coming years, weighed by a variety of factors including increasing social pressure against its use, the auction clearly showed that any talk of fur's death is greatly exaggerated.

And the industry has certainly got a boost from the recent cold snap that has dumped snow on many countries across the Northern hemisphere.


Fallenius said one reason behind the recent uptick in the market has been a cut in output from China, which since early 2000 had sharply hiked fur production, pressing prices.

He said China in the past two years has halved its annual mink production, while fox is down by three quarters. The country is the world's second-largest fur producer after Europe.

"Cheap labor costs won't get you far in this business. The international textile trade has ... been less and less willing to accept fur skins produced in China," Fallenius said.

Denmark is the world's top supplier of mink pelts, while Finland has some 1,300 fur farms, and last year Europe produced some 32 million mink and fox pelts.

But while recent demand has been strong, helped by markets like China where fur is less taboo and more of a novelty, global output peaked in 2007 and has fallen the last two years.

The European Fur Breeders' Association said 2009 fox and mink production globally was some 50 million pelts, down from the high of 65 million in 2007.

After Austria banned fur farming more than a decade ago, the much-debated trade has been entirely or partly phased out in countries like Britain, Holland and Denmark as stricter regulations come into force in the European Union.

"Fur right now ... doesn't make the top-10 list of anybody's fashion needs," says Milton Pedraza, head of New York consultancy The Luxury Institute.

"It's not that consumers, particularly women, don't like fur -- they do. But they see the social pressure that continues to exist against consuming fur. It's high-end, so they love it, but on the other hand they can do without it. The pain outweighs the pleasure right now of wearing fur," Pedraza said.

Pedraza said the global economic slowdown would also hurt the industry.

"I don't think fur will ever go away for sleeves and colors and some decoration, but a full mink coat?," he said, noting young people were not likely to "flock" to fur -- not even vintage -- anytime soon.

Harald Ullmann, spokesman of the German branch of animal rights group PETA, said that in the next 10-15 years fur would likely disappear from the streets.

"Even if people say fur is back -- and that's what the industry wants us to believe -- I don't think this is really the case," Ullmann said.

"Fur has nothing to do with luxury products. It is a product from the stone age and it belongs in the history books and not on somebody's back," he said.


But for now, fur still sells.

In a large mirror at a Helsinki store, Finnish shoppers and Russians -- known for their lasting love of fur -- measure the fit, weight and length of smooth capes, some of which sold for 38,000 euros apiece -- but with a 50 percent seasonal discount.

"The cold weather is doing its work," said Sari Ihatsu, shop head of Ajatar.

And Turkistuottajat's Fallenius said the industry was working on more versatile ways to use fur outside the winter season.

"The mink coat is a classic, elegant winter piece, and will remain as such, but it is not the only product," he said.

"With various techniques, we can now manufacture very light and cooler qualities and products, like sweaters, suitable even for summer evenings."

(Reporting by Eva Lamppu, editing by Paul Casciato)

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