New York Times 12/24/06 Back in Style: The Fur Trade

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http://www.nytimes.com/2006/12/24/business/yourmoney/24fur.html?ref=business

December 24, 2006

 

Back in Style: The Fur Trade

By KATE GALBRAITH

 

Zuki Balaila, a Montreal fur designer, with an array of beaver

pillows and blankets. He says sales in Russia are surging.

 

TOM DeLISLE, sporting thigh-high waders, squishes through mud and

cattails surrounding a pond near Albany, looking for wayward beavers

that might have wandered into one of his underwater traps. Alas, his

instant-kill traps, baited with Backbreaker castor oil, are empty.

But Mr. DeLisle plans to keep trapping all winter, knowing that the

pelts of beavers and other animals will grow thicker - and may fetch

a better price when he sells them - as the months wear on.

 

" Come trapping season, it's hard to wait, " Mr. DeLisle said of his

pursuit. " It's like a kid on Christmas morning. "

 

At his warehouse in northern Greece, Sotiris Vogiatzis, a fur

wholesaler, eagerly waits for pelts from trappers like Mr. DeLisle

because beaver is a hot fashion item in places like Russia and

Turkey. Five years ago, Mr. Vogiatzis was buying 5,000 beaver pelts a

year; now he buys about 30,000 annually, at prices that have climbed

to $30 to $35 each, from about $26 to $28. After he gets the pelts -

known in the trade as skins - he ships them to plants where they are

sheared, tanned, plucked and dyed.

 

Once treated, the beaver skins make their way into the hands of

fashion designers around the world, like Zuki Balaila in Montreal.

Mr. Balaila has been working with beaver since the 1970s (when he was

known as " Kooky Zuki, " because he dyed beaver in vivid reds and blues

for American fashionistas). Today, he serves markets far beyond North

America.

 

" Now we export to China and Korea, which is unheard of, " he said,

taking special note of surging demand in Russia. " Moscow is like New

York City. "

 

As humble beaver skins circle the world at steadily rising prices, so

goes the fur market as a whole. Buoyed by the globalization of trade

and the broader reach of the fashion industry, sales of fur garments,

trim and accessories amounted to about $13 billion for the fiscal

year ended August 2005, the most recent for which data is available -

up 9 percent from the previous year and up 40 percent from five years

earlier, according to the International Fur Trade Federation. The

organization predicts that fiscal 2006 will show a further climb in

sales.

 

A variety of styles and colors - and for beaver, a new lightness and

reversibility owing to improved shearing - has also helped fur fly

off the rack worldwide. The price of mink, the gold standard of the

fashion industry because of its softness and lightness, is at an

all-time high (about $57 a pelt for Danish mink, for example). Even

lesser-known furs have caught fire. The show-stealer has been

muskrat, the " poor man's mink, " which tripled in price during the

last year, to roughly $8 a pelt. Lynx and western coyote skins are

also selling well, while red fox and ubiquitous raccoon pelts have

lagged. American consumers spent about $1.8 billion on fur last year,

a 50 percent increase since 1998.

 

Looming over the entire industry, of course, are animal-rights

activists such as People for the Ethical Treatment of Animals, more

commonly known as PETA. Activists have earned both enmity and fear in

the fashion world for their in-your-face tactics, like the moment in

1996 when an unidentified protester tossed a dead raccoon onto the

plate of Anna Wintour, Vogue's fur-wearing editor, as she dined at

the Four Seasons.

 

While some designers, Ralph Lauren most recently, have abandoned fur

after pressure from the animal-rights movement, the industry says

that many more have taken it up. " The last five to six years, more

than 400 international designers have included fur in their

collections, " said Tina Jagros, executive director of the North

American Fur Association, a trade group. She estimates that this is

double the number of designers who included it 15 years ago.

 

WITH sales soaring, the fur trade has become bolder about taking on

activists - even securing Osama bin Laden-like status for antifur

marauders. Last month, the industry claimed a victory when President

Bush signed the Animal Enterprise Terrorism Act, which gives federal

authorities enhanced powers to prosecute animal-rights activists for

certain offenses. (The act defines " animal enterprise " as any

" commercial or academic enterprise that uses or sells animals or

animal products for profit, food or fiber production, agriculture,

research or testing. " )

 

The main reason for the fur boom, however, may simply be that pricey

pelts are now within the reach of a broader and younger population,

particularly in developing countries like Russia and China.

Innovations like knitted fur, laser-cutting, and precision dying

techniques have also made fur more appealing. In another shift from

decades past, fur is no longer considered intimidatingly formal.

 

" People are wearing their mink coats with their jeans, " said Melisa

Smart of the Alaskan Fur Company, a clothier based in Overland Park,

Kan. A few years ago, she even made fur jersey-jackets emblazoned

with the numbers of the Kansas City Chiefs football players. " You

could order a red sheared-beaver jersey with the number 88 on it, "

she said.

 

Within the chain that delivers fur from the wild or from farms to

wholesalers, designers and retailers stand the trappers, who occupy

the most basic and brutal rung in the hierarchy. Fur farms provide

about 85 percent of the world's skins, according to the trade

federation, with wild fur remaining largely a North American

commodity.

 

Although eight states have severely restricted trapping, some 150,000

trappers ply their trade each winter in the United States, and at

least 70,000 in Canada. Increasingly, trappers focus on nuisance

animals like beavers, muskrats or raccoons that suburbanites want

removed. For his part, Mr. DeLisle arranges his trapping spots with

homeowners and, like most trappers, pursues animals only part time.

 

Mr. DeLisle, a native New Yorker, began trapping when he was 13; his

first catch was a muskrat. He recalls bicycling home with animals he

had trapped, telling his mother about the catches, then skinning them

in the basement, as he does at his own home today. Now his

17-year-old son enjoys trapping, too.

 

" It's either in your blood or it's not, " Mr. DeLisle said of his

hobby. A self-employed chimney sweep who traps for love of the

outdoors, Mr. DeLisle caught 30 beavers last year. The $900 he earned

selling those skins accounted for roughly a quarter of his yearly

earnings from trapping, most of which he plows directly back into the

purchase of expensive traps. Mr. DeLisle stores and stretches his

pelts to dry them out and then sends them off for sale, generally to

an auction.

 

For trappers, the most important auctions are held in Canada. There

are three: the North American Fur Auctions in Toronto, which handles

5.5 million pelts a year; the Fur Harvesters Auction in North Bay,

several hundred miles north of Toronto, with more than a million

pelts annually (Mr. DeLisle sends his catches there); and a small one

for western pelts in Vancouver.

 

Luxury skins like mink - which analysts say accounts for more than 70

percent of the fur sold in the United States - are mostly farmed. The

largest mink producers are Denmark, with more than 12 million pelts

annually, followed by China, the Netherlands, Russia and the United

States. The other heavily farmed animal, fox, is concentrated mostly

in Finland.

 

There are more than 300 mink farms in the United States, producing

2.9 million pelts. Utah has the most farms, owing to a large feeding

cooperative in the state, but Wisconsin has the most animals,

according to Teresa Platt, executive director of Fur Commission USA,

an association of mink farms. Fur is so pivotal in Wisconsin that one

House member from the state, Representative Tom Petri, was the

leading sponsor of the Animal Enterprise Terrorism Act when it was

originally introduced.

 

For decades, farm-raised animals like mink have been getting larger,

and the pelts more profitable, because of careful breeding and

feeding. Russia used to be a leader in mink farming. But annual mink

production has dropped - to about 2.5 million pelts today from 15

million to 16 million before the collapse of the Soviet Union,

according to Torben Nielsen, the chief executive of Kopenhagen Fur,

the world's largest fur auctioneer.

 

China's burgeoning mink farms have come under special fire from

animal-rights groups, which have sought to outlaw trapping and

farming worldwide. PETA has posted a video on a Web site,

furisdead.com, that it says was made in China and shows animals being

skinned alive. The organization recently opened an office in Hong

Kong.

 

People in the industry acknowledge problems. " Some of the farms we

have visited are a very good standard. They use full European

standards, " said Thomas Wong, chairman of the Hong Kong International

Fur Fair, where retailers buy garments for their stores. " But some of

the farms they might take time to improve. "

 

When the world's fur buyers gather at auctions, the atmosphere can be

tumultuous. Mr. Vogiatzis, the Greek wholesaler, deals in most types

of skins but buys particularly large quantities of raccoons at

auctions. He describes the scene as a " madhouse. "

 

During auction season in Toronto, truckloads of fur flood into the

150,000-square-foot warehouse of the North American Fur Auctions. As

the items are sorted and displayed, the warehouse's concrete floor

becomes slick with fur and oil.

 

Experienced graders in white coats categorize the skins by type and

quality. The pelts - still stiff because they are raw and untanned -

are then strung together into carefully labeled lots of varying

sizes, some lots numbering in the hundreds. As the season progresses,

the warehouse becomes a forest of dangling pelts, and the air within

develops an intense odor.

 

In the refrigerated section - which resembles a closet packed with

pelts, rather than dresses - raccoon skins are hung inside out (the

better to expose blemishes), with their striped tails protruding

below. They are hung in the cooler amid other skins, which on a

recent visit included silver foxes with white-tipped tails, red

foxes, coyotes, river otters and even a few dozen bears.

 

Several days before the auction, buyers and designers arrive to

inspect the pelts before bidding. " When you have to stand up and

check the skins for 14, 16 hours a day, " Mr. Vogiatzis said, " it's

not the easiest job in the world. "

 

Mr. Vogiatzis, who joined his family's fur business 22 years ago, is

one of the largest fur buyers in Greece and says his company has

annual revenue of $8 million to $10 million. He started as a fur

manufacturer in Kastoria, the center of the Greek fur industry, where

he and his father employed 300 workers who made coats from minks,

foxes and raccoons. But 15 years ago, Mr. Vogiatzis decided to shed

the manufacturing side of his business and to deal exclusively in

skins.

 

" It's like a small auction house here, " he said of his operation.

" Going around the world, selling skins - maybe it suits me better

than production. "

 

Mr. Vogiatzis has witnessed the advent of new fur markets, and the

accompanying geographic shifts. When he joined his father's business,

he sent furs mostly to Italy. Now most of his furs end up in Russia.

 

The No. 1 factor affecting his business, he said, is the weather.

" When the weather is cold, everything is good for us - we can sell, "

he said. This season, however, he is worried about a warm spell in

Russia. " We depend on God sometimes, " he said.

 

THE fur boom marks a turnaround from 15 years ago, when retail sales

in the United States were barely half their current level. Fur's

earlier peak came during the early to mid-1980s, when many women,

newly ensconced in better-paying jobs, were using their spending

power. Mr. DeLisle remembers those years as a time when " you would

never see a road-kill raccoon, because somebody would pick it up and

sell it. "

 

But mink farms overproduced, prices fell for luxury furs and then all

other categories of fur. The stock market crash of 1987, and the sour

economy that followed, also hurt the luxury-goods market. At the same

time, fur opponents were gaining strength. PETA was founded in 1980

and now has 1.2 million members. It quickly gained a following among

celebrities and a reputation for attention-getting stunts.

 

Although Europe - where an appetite for beaver top hats helped push

North American settlers west two centuries ago - remains a fashion

leader, it is Russia and China that are driving demand.

 

At the Kopenhagen Fur Auction, about 70 percent of the fur sold is

sent to China, according to Mr. Nielsen. Much of that is made into

clothing there and then exported. China, particularly its Guangdong

Province, has supplanted Manhattan as the world's leading

manufacturing hub for fur.

 

An increasing amount of fur also stays in China, snapped up by

ever-wealthier consumers. " In China and Russia, a fur coat is a

symbol of success, " said Mr. Nielsen, who noted that the same was

true in Spain in the 1990s and Italy in the 1980s.

 

Russia's growing appetite for fur is not solely attributable to

frigid winters. Some segments of the economy are flourishing on the

back of high oil and gas prices. " Russians have a lot more money

now, " said Mark Downey, chief executive of Fur Harvesters. " They can

afford more fashion design-type things. "

 

People in the fur trade, meanwhile, say consumers are buying fur

apparel earlier in life, with the average customer being 10 years

younger than the buyers of 20 years ago, according to Mr. Nielsen.

Another demographic coup also seems to be brewing. " Men are wearing

it now, " said Mr. Balaila, the Montreal designer.

 

BORN in Beirut and raised in Israel, Mr. Balaila never saw fur

garments up close until he arrived in Canada in 1973 to join his

wife-to-be. She greeted him at the airport wearing a fur hat and a

fur coat. He soon joined his father-in-law's fur manufacturing

business, which focused largely on mink. He started out sweeping the

floors, but as the 24-year-old passed by the coats, he became

inspired.

 

Mr. Balaila, who as a teenager enjoyed sketching clothes, quickly

developed his own ideas for revamping his father-in-law's business.

To his eye, the garments seemed dull - browns, blacks, whites - and

" looked too old, too heavy, too massive " to appeal to the younger

generation.

 

He resumed his sketching and soon had his own label. In 1986, he

opened his own design shop, using unusual colors and lighter styles.

Mr. Balaila manufactures his own garments, which is rare for a

designer.

 

Despite producing only a few thousand expensive garments a year,

designers like Mr. Balaila feed the global craving for fur. If

fashion shows in Milan, Paris, New York and London are presenting

more fur, or a new type or style, ordinary consumers start clamoring

for cheaper look-alike items. Wholesale prices rise in tandem.

 

In the 1990s, when Mr. Balaila offered his apparel in Japan, his

beaver garments were mistaken for a type of lamb. Now that beaver is

a more popular fur, he plans to exhibit 40 items in mink, beaver and

chinchilla at the Hong Kong International Fur Fair in February.

" Those countries that don't have the weather to wear fur, they're

looking for something new and something different, " he said.

 

About 10 to 13 beaver pelts are used to make a knee-length coat. With

pelt prices rising, Mr. Balaila charges more for his work. A

sheared-beaver jacket that he might have sold wholesale to Saks Fifth

Avenue or Macy's for $2,000 several years ago would probably go for

about $4,000 today.

 

In Paris, Milan and New York, mink and fox - both farmed - have the

largest presence among furs on the runways, and consumers are paying

more for their mink coats and beaver hats. During the last five

years, " we've seen a 5 to 10 percent increase each year in the price

at the retail level across the board, regardless of whether it's mink

or it's beaver or it's fox, " said Angelo Papaevangelidis of Four

Seasons Fur in Toronto, a manufacturer and retailer that sells up to

1,000 garments a year.

 

Despite strong demand, the fur industry remains on guard. As a luxury

item, fur is extremely vulnerable to shifts in global economic winds.

The animal-rights movement is still a chief concern. There is a

widespread feeling among furriers that while the influence of the

movement has declined in recent years, it remains potent.

 

For its part, PETA says serious problems remain underexamined. " We

get calls from the public all the time who find that their dogs or

cats get caught in leghold traps, " said Dan Mathews, a PETA vice

president who worries about drownings linked to underwater traps.

 

Trappers like Mr. DeLisle acknowledge that accidents do happen, but

they say that trapping is done as humanely as possible, and that new

techniques are constantly assessed.

 

The animal-rights movement has its own legislative priorities. The

Humane Society of the United States is seeking better labeling of

fur. Currently, according to the group, only fur priced over $150

must alert consumers to what type of animal it is from, and where it

was produced.

 

Retailers, always on edge about the animal-rights arguments, are

often loath to discuss fur. For example, Harrods of London provided

its fur policy for this article, but in an e-mail message declined

further comment, " due to the sensitive nature of this particular

subject. " Harrods closed its fur salon in 1990, but still sells

fur-trimmed coats and accessories.

 

A HOT topic in Europe has been cat and dog fur. In November, the

European Commission proposed a ban on the import, export and sale of

such fur in the European Union, after acknowledging that some had

slipped in unlabeled from China. The United States enacted a similar

ban in 2000.

 

As is true of many industries these days, all eyes in the fur trade

are likely to remain on China. The country's mink production is

revving up, and its designers are gaining reputations overseas for

style and quality.

 

So for beavers and other furry creatures, the world tour is likely to

continue. A beaver snared by Mr. DeLisle on an icy New York morning

next month could find its way to Mr. Vogiatzis and a pressing plant

in Poland or Greece. Then it might be shipped to Siberia as a warm

black hat with ear flaps. Another beaver could become a light blue

sleeve in a soft and stylish reversible coat by Mr. Balaila, sold in

a Korean department store for thousands of dollars.

 

" Nobody wants to wear what her grandmother or her mother was

wearing, " Mr. Balaila said. " You have to excite the people. "

 

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