Saga Furs swings to loss as labels drop fur, China sees slowdown
today Jan 28, 2019
Do the latest results from Saga Furs suggest that fur is reaching the endgame as far as fashion is concerned? In the year to October 31, the fur specialist’s pre-tax profit was actually a loss – of €1.7 million.
The figures came only a year after the company had recorded pre-tax profit of €9.2 million and operating profit this time fell to a loss of €4.5 million compared to a profit of €5.8 million a year earlier. Saga said that the spate of major fashion names going fur-free recently contributed to its plunging earnings
Recent periods have seen brands – such as Gucci, Jimmy Choo, Michael Kors and Versace – that previously used fur switching to faux varieties on the back of general anti-fur sentiments and “image challenges” in western markets. But the company has also been affected by a slowdown in China.
The results report said that world mink production fell by around 20% last year with mink prices down even further (24%), which would have dented profit margins at Saga. Fox skin prices also fell by as much as 20%. Euro prices were also affected by exchange rates.
The company said that the value of brokerage sales for Saga Furs fell 28% to €314 million and consolidated net sales fell 13% €45.7 million.
Back to the question of whether fur is really on the way out, the company said that it's still seeing strong demand, even though China is slowing down due to large fur stockpiles. Meanwhile Russia is recovering and demand continues to rise in South Korea.
But anti-fur campaigners welcomed the declining profits picture at the company. Humane Society International UK Executive Director Claire Bass said: "Saga Furs’ plummeting profits clearly show an industry on the wrong side of history. In 2018 we saw a domino effect of the world’s top designers including Gucci, Versace and Burberry adopting fur-free policies and the fur trade is clearly reeling from that punch with fur prices plunging and a €10.9 million fall in the company’s profits. Saga Furs is absolutely right to cite ‘image challenges in the western market’ as a key problem.”
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