Post by krank on Nov 29, 2018 17:31:50 GMT -6
Heres a letter they put out.
Attachment Deleted
November 29, 2018
Dear Consignor,
I have just returned from a trip to China and thought that you would be interested in knowing more about what I learned in my travels.
First, let’s start with the weather. It has not yet been consistently cold in the north of China. As previously reported, fur garment sales during the November 11th Singles Day were reported to be quite good, but until the really cold weather comes and stays, further garment sales will likely remain at or below last year’s levels. The lack of extremely cold weather so far this year has also meant that most retailers generally report that they have only earned limited profits on what has been sold thus far because of discounting. The good news, however, for NAFA consignors is that many Chinese buyers are doing better selling NAFA’s high quality mink to their customers, especially those who are supported by our label programs and initiatives.
Universally, people in the Chinese fur industry are hoping for a major cut in mink production worldwide in the hope that this then drives a real increase in the price of mink and many wild fur articles. However, in order for the state of our industry to truly change for the better, I believe that we need to see more of a new fashion element injected into the business. This is happening via the on-line Internet selling channel, where sellers focusing on this particular channel seem to be doing better than the traditional brick and mortar fur retailers. The consumers who buy garments via the Internet shops also tend to be younger and more fashion conscious.
In short, the problems that we all currently face can generally be summarized as follows: •Significant over production of mink worldwide.
•A traditional brick and mortar retail system that is suffering the same woes as we see in many Western markets.
•Wild fur articles that compete with Chinese produced alternatives (eg., Chinese raccoon or domestically produced foxes)
•Some animal rights activity that is influencing the purchasing decisions of younger buyers.
I would say that it is not just the fur business in China that is currently difficult. Many people talk about how the whole Chinese economy is soft these days, so consumer spending is generally down in many sectors. The US trade war seems to have negatively impacted China’s economy, as have many Chinese government policies.
According to Rob Cahill who is also travelling at this moment in Asia, the Korean market seems to be doing much better than China. Rob reports that while the weather is warm in Korea, virtually all domestic brands are reporting decent sales. They are on par with last year in terms of quantity but are experiencing some modest downward price pressure. Discounts have started, but all are quite optimistic that they will get through their inventory this year.
However, change is coming to the market, as we believe that production of mink in Europe (the major market supplier of mink to the world) is indeed falling quickly due to climatological issues and market realities. Taking into consideration production in all European countries, we expect Kopenhagen/SAGA/NAFA to divide up a total fresh mink offering of 34 million in the 2018/19 season. Some portion of this production will also be put away in storage, waiting for better times. By 2019, the total European production is forecasted to drop to less than 27 million mink.
Similarly, North American mink production is forecast to decline to approximately 5 million pelts by 2020. Further, lower mink prices will also continue to be some form of governor on the price of most wild fur articles, thereby reducing the harvest of most of these items.
Chinese mink production also is reported to be falling but, of course, this is harder to quantify.
In summary, the global supply of fur produced each year is quickly becoming better balanced with real demand which should help prices stabilize or, indeed, rise. Still, there is no doubt that our industry still faces difficult days ahead. Nevertheless, NAFA will continue to do all that it can to support and service our consignors and customers.
Best regards,
Douglas Lawson
President & CEO
Attachment Deleted
November 29, 2018
Dear Consignor,
I have just returned from a trip to China and thought that you would be interested in knowing more about what I learned in my travels.
First, let’s start with the weather. It has not yet been consistently cold in the north of China. As previously reported, fur garment sales during the November 11th Singles Day were reported to be quite good, but until the really cold weather comes and stays, further garment sales will likely remain at or below last year’s levels. The lack of extremely cold weather so far this year has also meant that most retailers generally report that they have only earned limited profits on what has been sold thus far because of discounting. The good news, however, for NAFA consignors is that many Chinese buyers are doing better selling NAFA’s high quality mink to their customers, especially those who are supported by our label programs and initiatives.
Universally, people in the Chinese fur industry are hoping for a major cut in mink production worldwide in the hope that this then drives a real increase in the price of mink and many wild fur articles. However, in order for the state of our industry to truly change for the better, I believe that we need to see more of a new fashion element injected into the business. This is happening via the on-line Internet selling channel, where sellers focusing on this particular channel seem to be doing better than the traditional brick and mortar fur retailers. The consumers who buy garments via the Internet shops also tend to be younger and more fashion conscious.
In short, the problems that we all currently face can generally be summarized as follows: •Significant over production of mink worldwide.
•A traditional brick and mortar retail system that is suffering the same woes as we see in many Western markets.
•Wild fur articles that compete with Chinese produced alternatives (eg., Chinese raccoon or domestically produced foxes)
•Some animal rights activity that is influencing the purchasing decisions of younger buyers.
I would say that it is not just the fur business in China that is currently difficult. Many people talk about how the whole Chinese economy is soft these days, so consumer spending is generally down in many sectors. The US trade war seems to have negatively impacted China’s economy, as have many Chinese government policies.
According to Rob Cahill who is also travelling at this moment in Asia, the Korean market seems to be doing much better than China. Rob reports that while the weather is warm in Korea, virtually all domestic brands are reporting decent sales. They are on par with last year in terms of quantity but are experiencing some modest downward price pressure. Discounts have started, but all are quite optimistic that they will get through their inventory this year.
However, change is coming to the market, as we believe that production of mink in Europe (the major market supplier of mink to the world) is indeed falling quickly due to climatological issues and market realities. Taking into consideration production in all European countries, we expect Kopenhagen/SAGA/NAFA to divide up a total fresh mink offering of 34 million in the 2018/19 season. Some portion of this production will also be put away in storage, waiting for better times. By 2019, the total European production is forecasted to drop to less than 27 million mink.
Similarly, North American mink production is forecast to decline to approximately 5 million pelts by 2020. Further, lower mink prices will also continue to be some form of governor on the price of most wild fur articles, thereby reducing the harvest of most of these items.
Chinese mink production also is reported to be falling but, of course, this is harder to quantify.
In summary, the global supply of fur produced each year is quickly becoming better balanced with real demand which should help prices stabilize or, indeed, rise. Still, there is no doubt that our industry still faces difficult days ahead. Nevertheless, NAFA will continue to do all that it can to support and service our consignors and customers.
Best regards,
Douglas Lawson
President & CEO
Goodbye 2020