Leather Under the Weather

Oh my!  The Fashionomist has come across some supply side issues in fashionomics.

The Wall Street Journal reports today (http://online.wsj.com/article/SB10001424052748703386704576186622203316488.html#articleTabs%3Darticle) that fans of leather will have to pay up this year as prices are rising astronomically worldwide.  Leather (the most popular component of luxury goods) is seeing huge supply-demand conflict, with prices of leather jumping 24% in the past year to a record high $82 apiece.  This is causing a crisis, to say the least.  Hermes International SCA, maker of those "Sex and the City"-esque Kelly and Birkin bags, is flustered about what to do with regards to the price of exotic skins.

 
And it's not just cow leather that has faced setbacks:  material from exotic animal sources have come under price attack, with crocodile, that oh-so-famous bag/shoe material, rising in price 25%.  Lineapelle, organizers of Italy's premier international exhibition of leather and accessories, reports jumps in costs of sheep hide (60%) and goat hide (35%) from just four years ago.  Even non-animal sources of material - cotton, silk, and synthetics - are seeing immense price jumps, with cotton futures leaping 139% to previously unheard of levels.

Why is this the case?  Seems as if a perfect storm of weather and recovery are to blame.  Australia, normally, the world's cattle hide paradise, has been unable to produce as much due to flooding. Couple this with a rising middle class in economically developing countries like China and Vietnam along with recovering economically developed countries that already had quite the appetite for finer leather goods such as the United States, and you have a cow of a problem on your hands, to put it lightly.

What are producers doing to combat these supply/price shocks?  Tanneries are looking to untapped sources for cheaper leather, searching to pass on savings to consumers, who are irate at price increases.  Consumers also aren't too keen on mixing fabric and leather, which fashion houses have begun integrating together in an effort to produce the luxury goods that are finally creeping out of the recession's shadows.  Producers are in a crunch, since consumers crawling out of a recession want to pay pre-recession prices on leather but don't realize the extent of the problem, with Italian tanners suffering the most.  As one observer put it, "This would normally be a good thing for Italy, but there hasn't been enough leather to go around."

The Fashionomist is quite sure that somewhere, PETA is secretly whooping with glee. 


Photo clusters (all from Fall 2011 collections):  Valentino shows its take on leather dresses; the classic Birkin and Kelly bags by Hermes; Hermes struts its leather head-to-toe ensembles; Chloe showcases its leather bags.

*The Fashionomist"