NoVEmBEr 2013
mArKEt uPDAtE NAFA welcomes Barry Alvarez to its Board of Directors...see back page
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P r e s i dent's m essage Dear Rancher: As we come into pelting season and NAFA prepares to collect, grade and sort all the mink that you have labored upon so diligently all year long, I wanted to write and update you on all the things that we are doing to get ready to successfully market and sell your fur in 2014. Once again, 2014 looks like it will be another great year for NAFA and thus, all of our shippers. While you can read more about what is currently going on in the major global fur markets in the next article, it basically all boils down to the fact that there is still considerable optimism in the international fur trade regarding the demand for fur in 2014. And in the coming year, NAFA will be doing more than its fair share to meet this growing demand. NAFA currently expects to sell well over 10 million mink at our three auctions in 2014 which is both 2.6 million more than we sold in 2013 as well as a whole additional auction. Clearly all of this growth is not just organic from our present producer community. NAFA continues to have new shippers in both North America and Europe join our family and many of these new shippers are well known and distinguished producers who will add considerable prestige to our 2014 fur collection, labels and catalogue. Therefore, NAFA will, once again, see real and significant growth in its overall share of the worldwide fur market in 2014. While other auction houses claim to be growing, NAFA has the real and undeniable evidence of growth. As we have previously announced, NAFA’s record attendance from last year has dictated that we needed more space in the auction room and as a result our auction room is being expanded by 50% and will be ready for our opening sale in February. Furthermore, the increased quantities that we are expecting in both wild fur and ranch mink has made it possible for us to add the April auction to our schedule. This will allow all of our producers an additional marketing opportunity and, for our buying customers, the flexibility of spreading their buying out more evenly to accommodate cash flow and production. Our increased quantities of both European and North American ranch mink also creates further opportunities for NAFA to expand the scope of our integrated mink catalogue in 2014. This is NOT the inter-sorting of mink as has been so loosely claimed in a recent news release but an integrated approach to cataloguing mink that has already proved its worth in 2013 by creating additional value for consignors and positive reaction and comments from the international buying community. The goal of NAFA’s integrated approach to cataloguing is not only to create bigger and more attractive strings of mink but also to make it easier for our buyers to understand our catalogue, thereby improving their ability and willingness to establish an appropriate premium price for your mink. Most importantly, it is our best effort at protecting and enhancing the intrinsic value of North American mink and our successful NAFA label campaign. As our newest NAFA Board member, Barry Alvarez, Director of Athletics for the University of Wisconsin and College Football Hall of Fame inductee, recently said to me as we were discussing the ins and outs of the fur business, “As I used to say to the young men that I was recruiting to come to the University of Wisconsin as both students and football players, you are going to hear a lot from our competition saying this or that bad thing about our school. However, it seems to me if you hear nothing but bad things from someone else about what you are doing, then either the competition has very little good to say about themselves or they are trying to cover up for their own shortcomings.” I heartily agree with this comment especially when I see and hear some of the statements being made in the market these days by our competition. I take great pride in seeing all that NAFA has accomplished over these last few years in building the fastest growing and most vibrant auction in the world. That is why I said in my last letter to you that I firmly believe that NAFA is on the right course of working with our shippers to continually build, grow and improve what has become a truly energetic and global fur business. Finally, we are very proud to be the only auction outlet selling in North America. I wish you all a good pelting season. We look forward to receiving your mink here at NAFA for what we hope and trust will be another stellar selling season. Sincerely,
Michael Mengar, President & CEO
WOrLdWide FUr marKet COnditiOns We have reached the time of year again when all eyes are once again focused on the retail end of the fur business and as always, winter weather conditions will be the most important factor driving fur sales in all major markets. Historically, an early cold spell has seen a spike in retail sales but this does not guarantee a successful “sell through” for the season. Likewise, a slow start because of warm weather should not be cause for alarm. In China, retail activity has been described as brisk as Chinese consumers continue to spend money on luxury products like furs. This is in-spite of unseasonably mild temperatures during the month of October. In Tong’erpu in the northeast part of China, the fur selling season has started off well as the cold arrives earlier there. However, in the major fur centers of Haining and Yuyao in the south, fur retail sales are reported to be slightly less than last year. Nevertheless, new fur malls are still being built and opened all over China and many of the new fur centers in the central and western areas of China have already found customers ready and anxious to buy new fur garments. There is also one other issue that will likely have a significant impact on all auction house sales of fur to China in the coming months depending upon how it is resolved. As you may already know, over the last few months there has been a greater level of Chinese government scrutiny on fur imports into that country. While up until now, these inquiries have not had an impact on the current market price of fur as was demonstrated in Kopenhagen’s September 2013 auction results, how all of this plays out over time obviously adds a further note of caution to what would otherwise be a reasonably optimistic Chinese market forecast. The current price of fur is still causing some price resistance in Russian and Eastern European markets. However, top quality fashion items are doing much better than more commercial goods. Fashion magazines continue to tout fur as the “must have” luxury item of the season, so expectations are good as the winter months approach. Further, the upcoming 2014 Winter Olympic Games, which will be held in Sochi, Russia, offer a unique opportunity for Russian retailers to expose and promote their fur garments to a large worldwide audience. Korea, which has long been an important market for top quality mink, has expanded from traditional styles and colors to more fashion-forward fur garments. This has brought an increased interest to fur retail. The warm temperatures throughout October slowed sales but retailers anticipate renewed activity as the thermometer dips. Western Europe and North American markets are experiencing a somewhat invigorated retail selling season of furs as trims on outerwear garments, ready-to-wear items and accessories. It is the fashion image of fur that facilitates these purchases and brings new consumers to the market. In summary, the timely onset of winter and cold temperatures will have the most significant impact on what happens in the world fur market in 2014 as it always has. With three full selling months still ahead in the major markets and despite the customs issues in China, most sectors of the international fur trade continue to remain optimistic in their outlook for the coming year.
NAFA welcomes Barry Alvarez It is with great pleasure that NAFA announces that Barry Alvarez, Director of Athletics for the University of Wisconsin and College Football Hall of Fame inductee, has been elected to the Company’s Board of Directors. Michael Mengar, President and CEO of NAFA said “We feel very fortunate to be able to add a person of Barry’s caliber and reputation to the NAFA Board. Barry is a charismatic leader who brings not only a winning business attitude to NAFA gained from his many years serving as the longest tenured head coach in Wisconsin Badgers football history as well as the one with the most wins. Personally, I also look forward to taking advantage of Barry’s broad based management expertise and insight in helping us advance NAFA’s corporate strategy and long-range business goals." Barry was named head coach of the Wisconsin Badgers football program in 1990 where he inherited a program that had not had a winning season since 1984, and had only won seven games in Big Ten Conference play in that time. Considering the troubled state of the program he inherited, Barry engineered a very quick return to respectability and established a new winning tradition at Wisconsin that included 3 Rose Bowl wins. During his head coaching tenure at Wisconsin, Barry received national recognition as the recipient of the AFCA Coach of the Year and Bobby Dodd Coach of the Year Award in 1993. He was twice honored as the Big Ten Conference Coach of the Year, in 1993 and 1998. In 2009, Alvarez was inducted into the Wisconsin Athletic Hall of Fame and the Rose Bowl Hall of Fame. Barry was later inducted into the College Football Hall of Fame as part of the 2010 class. Barry stepped down as Wisconsin’s head coach after the 2005 season to become the school’s Director of Athletics, a position in which he continues to serve in today.
Re v ised 2014 Auc t ion schedul e
In an effort to accommodate the international fur trade, NAFA is announcing a change to its April auction dates, to start selling on April 28 The revised 2014 schedule is as follows:
February 17 – 23, 2014 (on show february 12 – 16)
April 28 – MAY 3, 2014 ( on
show april 23 – 27)
June 27 – july 2, 2014 ( on
show june 22 – 26 )
NAFA NEWS is published by
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