Furriers Worry About Their Boom (Published 1978) (2024)

“I've just heard the most marvelous news — there's a blizzard in Chicago and it might be moving East.”

Elaine Klein, an advertising executive who just bought her first mink coat, is looking for the cold weather in which to wear it. Mrs. Klein is one of that new breed of fur customer who wants her mink less for status than for fashion — and, in the face of soaring prices, pays for it herself.

In the last five years, these customers have produced’ a boom not seen since the early 1960's. The fur industry enjoyed the best December in its history in 1977, and retail sales for the year reached a record $613 million.

It has been a good fur year thus far, but there are signs that this Christmas might not be as much of a holiday bonanza as it was last year, when some retailers saw 25 percent sales increases from 1976. The Christmas season alone can account for more than 15 percent of a furrier's annual business.

Last December was the best ever but now customers are starting to show recession jitters.

“I've seen a considerable amount of customer resistance to the high prices. Recently, they've been taking a reserved, cautious attitude about buying,” said Samuel R. Field, senior vice president of Evans Inc., a fur retailer with 12 stores in the Midwest and in Texas and leased fur departments in another 100 stores.

Since mid‐November, pervasive talk of recession and the absence of crisp, cold weather (it puts customers into a fur‐buying mood) have caused a slowdown in the rate of sales, which had been proceeding at a healthy pace since the traditional mark down of furs for August “specials.” Many retailers have adopted a more cautious attitude about the fourth quarter.

While the fur industry has been enjoying unprecedented sales In terms of dollars since the mid‐1970's, the dramatic increases have been more a result of skyrocketing wholesale and retail prices of fur garments — due to the scarcity of certain pelts and the expensive labor required to fashion them into garments — than of a large gain in the number of furs sold, analysts say.

Today fewer companies than ever before remain in business. And skilled workers — the average age of a fur laborer is 60 — are becoming as scarce as some of the precious pelts they handle.

Nevertheless, industry analysts are projecting that 1978 retail sales in dollar terms will run about 10 percent higher than last year, mainly reflecting retail price increases. They estimate that the rise in retail prices next year will run more than 15 percent in many cases.

“If I were thinking of buying a fur, I'd buy right now. I wouldn't wait until next year,” said Ted Leakas, president of Jan Originals, Inc., a New York fur manufacturer.

“All indications are that at the wholesale level, fur garments shown next March for sale in the stores beginning in August will run 20 to 25 percent highdr than this year,” he said.

Mr. Field of Evans Inc. added, “This is a highly competitive field. We have to get the customer to spend the money.”

And spend she must. Fur manufacturers say the wholesale prices of many pelts have doubled and even tripled in the last few years. Even mink —which remains the pre‐eminent fur, responsible for more than 50 percent of all fur garment sales and whose price has risen at a slower rate than some other furs — has seen dramatic wholesale price increases in the last few years. A good mink coat, for example, which could be bought for $3,000 in the 1960's, today carries a retail pricetag of more than $5,000. Wholesale prices of such furs as raccoon, Canadian lynx and Russian sable have doubled and, in some cases, tripled in the last four or five years.

A good‐quality raccoon coat that might have sold for $1,000 in the mid1970's, today retails at $3,000 and more. A sable coat can run $75,000 in a fur salon, while a garment of Russian lynx, one of the most expensive furs, may start at $50,000.

At the Oslo, Norway, fur auctions held last week, final prices on blue fox pelts ran more than 50 percent higher than a year ago, and ranch mink was up 27 percent. Fur manufacturers estimate that opening prices on many pelts will be 15 to 20 percent higher than last year at other important fur auctions taking place this month in Europe and America.

Because a fur coat represents probably the most expensive and luxurious fashion commitment a person can make — a fur item can be more costly than a car — the buying process is as much psychological as it is financial. And, in the last few years, the fur-buying customer has changed her (and his) ideas about this costly commodity. In the process, the type of customer walking into a fur salon has changed.

In postwar America, a fur coat usually was owned by the wife of a substantial business executive or professional. It was her status symbol, taken out of her closet on rare dressup occasions.

The late 1950's and early 1960's was the age of the mink stole, an affordable luxury at several hundred dollars each. During this time, quality and fit were the only things a customer wanted to discuss. Fashion was not so important as other factors.

“There were thousands of classic mink coats with small collars and square shoulders,” said Ernest Graf, president of Ben Kahn Furs Corporation, a New York fur manufacturer.

In the late 1960's and early 1970's, fur sales suffered a decline, down to 500,000 units sold in 1970, compared with 525,000 in 1965 and 2 million in 1945. The Vietnam war, ecological and political activism and the psychedelic era, along with the comfortable and flashy clothes of the hippie generation, put fur sales in storage. Flower, children and demonstrators didn't want to think about sable and mink, and, in fact, were embarrassed about the fur coats hanging in their mothers’ closets, coats that were symbols of a lifestyle they sought to reject.

But by 1975, unit sales surged to 650,000 and revenues had almost doubled from the 1970 level. The fur coat was becoming very expensive and was being treated as more of a fashion item. European and American designers were bringing forth important fur collections — and both the young professional woman with her own money to spend and the daughter of a woman who had bought fur in the past were beginnihg to take notice.

Men, too, were beginning to wear fur to the point where they now account for about 10 percent of the market.

“There's a new generation of customers out there,” said Arthur Coopchik, president of Coopchik Furs, Inc. “No more is a fur coat a big, important coat for special occasions. The evolution into fashion of non‐mink furs such as raccoon, beaver, otter, Karakul (the “Persian lamb” of years past), lynx and coyote and the return of a desire to dress up has caused a real change in attitude.”

“In the old days, particularly in Europe, fur was bought like gold,” said Jacques Haran, general director of the worldwide operations of Revillon, Inc. and president of the company's American company. Revillon operates in this country in leased departments of Saks Fifth Avenue's 26 stores.

“Now, furs are an accessory,” he continued. “People buy it because they like it — a little like a very good cloth coat or a fine cashmere sweater. They aren't buying fur as an investment, but as a fashion item to wear for several years.”

Indeed, fur manufacturers and retailers say fur should not be regarded as a financial investment to be resold at a profit after several years. True, a woman can find that the price of a fur coat she bought at $4,000 a few years ago stands now at $6,000 for a virtually identical garment. But although resale prices have doubled in recent years, the resale value often is less than her original price because fur depreciates the moment she first hangs the item in her closet.

“Fur does not appreciate, as, say diamonds,” said Leonard Hankin, executive vice‐president of Bergdorf Goodman. The fur department is the largest in the store and reportedly accounts for $5 million of the store's more than $60 million estimated current volume.

“I think the best example of how the customer has evolved can be seen in the example of a woman who is buying a more traditional $60,000 sable coat in our salon, and, ten feet away, is a woman — perhaps younger and paying for the coat herself — buying a squirrel coat dyed bright yellow for $4,250,” Mr. Hankin said.

“But the interesting thing is, the woman buying the more expensive coat might look over and begin to browse among the less expensive, more ‘kicky’ looks,” he continued. “There always has been the woman who wants to spend a lot of money on fur. Certainly, there has always been a $40,000 fur coat available, even many years ago. I found myself in an unusual position recently. I was called to the fur salon to explain to a woman from Austria who had just bought a $40,000 sable that it was, indeed a good coat. She wanted to know why it was so cheap because she had seen sable in European stores for $75,000.”

The gradual shift in fur manufacturing to such countries as Italy and Greece has some industry sources worried. One of these is Russel R. Taylor, founder of an apparel manufacturing company in New York and formerly president of a fur retail and wholesale operation. Mr. Taylor recently completed his doctoral dissertation on the status of the fur industry and now teaches at The College of New Rochelle.

“A lot of people are euphoric about the dollar sales, but 1978 represents a slight decline in units sold in the overall industry,” he pointed out. “The industry is in an unhealthy state. According to United States Census data, in 1947 there were more than 2,200 fur manufacturing firms in the United States. Thirty years later, there are fewer than 700.”

Labor costs have driven up the cost of furs. A good‐quality mink coat, for example, costs about $3,500 to make —$2,000 for the skins and $1,500 for the labor. The most recent three‐year contract negotiated with the Meatcutters and Butcher Workmen of North Ameri ca, the official union, provided for a $35‐a‐week increase last year and $25 more a week for each of the next two years, over and above other contract benefits. A fur laborer can make anywhere from $150 to $500 a week, depending on the job.

“As long as the cost of the raw material exceeds 50 percent of the wholesale price, I feel I am justified to put in expensive labor,” said Mr. Graf. “The public will not pay for labor alone. The fur is a precious object and must be worked, just like setting a diamond.”

The $3,500 mink coat will be offered to a store for about $4,500. To the fur manufacturer, the $1,000 difference represents overhead, taxes and other expenses, as well as profit. The coat will retail at about $9,000, depending on the retailer. Fur manufacturers say their net profit can be anywhere from to 6 percent. By comparison, 3 percent is the average net for retail operations.