Market Update – January 26, 2012
‘Open to Buy’ Position in China is Strong
The strong Chinese market is expected to continue this year as the appetite for fur among consumers remains solid. Chinese buyers are expected to be in a receptive ‘open to buy’ position when they come to our February auction as a result of satisfactory retail sales this year and a clearance rate of approximately 75 percent of goods.
The Chinese New Year fell on January 23rd this year and is as important to Chinese retailers as Christmas is to North American retailers. The New Year in China is a time of brisk sales and is a good way to measure the overall health of the retail sales market. Sales this year are not as strong as last year’s record breaking sales but good enough for it to be considered a successful retail season. Skin inventories are considered to be low and there is a need to replenish stocks.
Cold weather returns to Russia
After a mild start to the winter season, the temperature in many Russian cities has plunged into the negative territory with a vengeance; minus 20 to 30 degrees Celsius in some areas and Moscow has been dealing with minus 15 degree temperatures in the last few weeks. The retail sales slump in November and December has turned into a jump as retailers are now reporting that traffic has picked up; however most sales are now being done at discount prices. The higher end retail stores which feature quality mink, like Black NAFA mink, say sales are brisk but profit margins are not what was expected. Buyer turnout for the upcoming auction from Russia, Greece and Turkey is still expected to be strong.
Korean Market Solid
Warm weather has returned to Korea in January after a few weeks of cold, seasonally average temperatures. As a result, retail sales of fur are slower than usual – particularly in the last six weeks. October and November sales were good as the temperature began to dip but then, a roller coaster ride of warm and cool weather has created a slow-down in retail sales. Despite this, the Korean market is still in good shape– the lack of cold weather has simply meant that it isn’t as robust as it could be at this time of the year. We are expecting a good buyer turnout for the February auction from Korea.
Summary
Despite the unusually warm winter in most consuming markets, we are pleasantly surprised and pleased with the season-opening December levels. Most buyers around the world have told us they are hoping to see levels similar to what was achieved at our February 2011 auction. Overall, the coming auction promises to be an exciting one and there are reasonable expectations for a successful sale.