Danish Fur House Sales Reach Records as Rich Chinese Buy Minks

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Danish Fur House Sales Reach Records as Rich Chinese Buy Minks

By Tasneem Brogger

 

Nov. 10 (Bloomberg) -- Kopenhagen Fur, the world's biggest auction house for

furs costing as much as $35,000, is posting record sales as China's new rich

snap up minks and chinchillas.

 

" The truly rich are a growing demographic in China, " said Torben Nielsen, the

Danish company's chief executive officer, in an interview. " This top end is

really beginning to flourish where there's a very large potential for the most

expensive labels. "

 

Founded in 1931, Kopenhagen Fur is the world's biggest seller of raw mink used

in coats with prices that start at $3,500. The company, which sells to fashion

houses including Gucci Group NV, Prada Holding NV and Fendi SpA, has benefited

from an economic boom in emerging markets that created hundreds of millionaires.

 

" We've always had our biggest markets in countries where there's an explosive

shift up the socio-economic scale, " Nielsen said. " In the 60s it was Germany, in

the 70s Japan, in the 80s Italy, in the 90s Korea, and now it's China and

Russia. "

 

Sales at the auction house jumped 49 percent to 5.2 billion kroner ($893

million) in the year through September, with 80 percent of revenue from China

and Hong Kong, the company said.

 

China is the world's third-biggest buyer of luxury consumer goods, according to

the Worldwatch Institute, citing data provided by Goldman Sachs Group Inc.

 

Chinese Growth

 

The nation last year overtook the U.K. as the world's fourth-largest economy.

Annual gross domestic product growth exceeded 10 percent in each of the first

three quarters, equivalent to double the global average.

 

In 2002, the richest 10 percent of Chinese earned almost a third of the

country's income, according to the United Nations 2005 Human Development Report

for China.

 

The average net worth of China's 400 richest this year is $275 million, while

the combined net worth of the 400 top earners jumped 51 percent to $38 billion

this year from 2005, according to a Nov. 2 Forbes.com Inc. report.

 

Kopenhagen Fur, which is collectively owned by about 2,000 fur breeders,

produces about 40 percent of the world's mink, its most popular fur, accounting

for 90 percent of furs sold. Fur is Denmark's biggest export commodity to Hong

Kong and China, according to the company's Web site.

 

Ethical Shift

 

Kopenhagen Fur is also benefiting from a shift in global perceptions on wearing

fur. According to Nielsen, consumers have forgotten anti-fur campaigns supported

by supermodels including Christy Turlington, and Naomi Campbell, who posed naked

for People for the Ethical Treatment of Animals under the slogan " I'd rather go

naked than wear fur. "

 

" People's attitudes toward fur have changed, " said Lise Skov, author of " World

Fashion and Hong Kong " and a lecturer at the Copenhagen Business School. " A lot

of consumers don't care so much about ethical issues. "

 

Naomi Campbell can be seen draped in fur on the Web site of the Fur Information

Council of America, a California-based organization that supports the

international fur industry. The group offers advice to protect fur companies

from " extremist " animal rights groups, according to its Web site.

 

Supermodel Cindy Crawford, who once pledged to support Peta, has appeared in an

advertising campaign for the Blackglama mink brand, owned by Seattle-based

American Legend.

 

'On Our Side'

 

" Fashion is on our side, at the moment, " Nielsen said. " The anti-fur sentiment

from the 80s and early 90s has to a high degree changed. There's still an

anti-fur movement, but it's not particularly strong. "

 

The most recent addition to the Danish royal family, Prince Christian, the

one-year-old son of Crown Prince Frederik and Crown Princess Mary, is

transported around by his parents in a mink carrier provided by Kopenhagen Fur.

 

According to Peta, an absence of ethical objections to wearing fur holds

particularly true for China.

 

" China's newly wealthy are trying to emulate celebrities in the west and the fur

industry is telling them that wearing fur and eating meat are part of a

glamorous lifestyle, " Peta campaigner Yvonne Taylor said. " The fur industry is

starting with a public that has no awareness of animal cruelty. "

 

Kopenhagen Fur, whose raw furs are sold at five annual auctions, last year sold

15.2 million skins. Denmark's fur industry cooperates with the Royal Veterinary

and Agricultural College as well as the Danish Institute of Agricultural

Sciences and Danish Animal Welfare to improve the conditions under with the

animals are kept, according to the company's Web site.

 

The live mink, bred by the company on farms in the Jutland region, are housed in

cages measuring 30 centimeters by 90 centimeters, with access to smaller nesting

cages. They produce a litter of babies about one year into their lives, after

which they are culled with carbon dioxide.

 

Demand for furs means there are more competitors on the way, " that's for sure, "

Nielsen said. " We've had a fantastically good demand and there's no doubt that

demand is greater than the supply of furs currently available on the market.

We're at a good starting point for the coming season. "

 

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