Late last summer, the Beijing Fur Fair and China Tushu, a major Chinese crown corporation, named NAFA as the official sponsor of the country's annual fur design competition, which was renamed "the NAFA Cup."
What did NAFA do to earn the billing? "Not much," Benedetti shrugged. China Tushu and the fur fair were putting up all the money, the advertising (including a new billboard headlined "Dawn of New Decade." "Oh great," Benedetti muttered when she first saw it, "they missed the 'A'"), a gala banquet for a few thousand people and-not to be underestimated-the seal of approval from a powerful arm of the Chinese government. NAFA covered the soft costs, as Benedetti calls them: skins for the designers to use and prizes for the winners (including a week at the company's Toronto design studio). And, of course, the fur fair would avail itself of Benedetti's fashion show expertise.
Can NAFA outlast the bubble? Travelling around the country, it's common to meet retailers and manufacturers who rode market waves for leather, and then for cashmere, neither of which are as popular with Chinese consumers today as they once were. Politics and protectionism-China does have its own fur producers, even if their goods are usually of poor quality-can also upend a company's China fortunes overnight.
The state of the greenback doesn't help. Much of NAFA's success is a function of exchange rates, says Herman Jansen, the managing director: It's far cheaper for international buyers to shop with dollars, which NAFA uses, than euros.
The most worrisome development for the company, however, is Europe's progress in raising short-napped mink. NAFA has built its brand in China largely around the superiority of its fur, after all-the uniqueness of the product has been the company's greatest bulwark against Kopenhagen and the Finns. But European mink ranchers have since figured out the formula, and now they've begun producing short-napped mink that's almost indistinguishable from the North American stuff, Jansen says, in every colour but the most sought-after ones: mahogany and black. Where Kopenhagan offered 500,000 North American-style mink skins four years ago, it sold four million this year-a number that's just shy of North America's total production-and the figure will only continue to grow.
In response, NAFA is pursuing an aggressive growth strategy, with the aim of enabling buyers to skip the European auctions altogether. In recent years, NAFA has tired to poach some of the best mink ranchers in eight European countries. The company sold 2.4 million European mink this year in Toronto, compared to three million from North America. "What we'd like to do is be a one-stop shop," Jansen says.
Jansen, speaking somewhat cryptically, suggests that the Toronto company has made overtures to American Legend, as well. "Over time these two companies will merge," he says. "Guaranteed. It only makes sense. Logically there should be just one North American auction house." The difficulty, Jansen says, is that ALC, a co-operative, is ruled by its members. "People aren't always logical."
Russia, whenever its economy rebounds, "will be absolutely huge" as a consumer market, say Jansen and others in the company. The country is an important market not only for garments but also for trim and fur hats (the latter are especially attractive to furriers because they fall apart after a couple of seasons). Other possibilities? Northern India, another cold region in a hugely populous, fast-developing, bling-loving country. Iran is cold, also, Jansen says, adding, "We haven't been there yet."
And even though a few luxury business analysts have begun to worry that China's major cities are starting to suffer luxury fatigue, Benedetti and Jansen contend that there's room for plenty more growth in China, particularly in less-developed regions; the company's agents are pushing into promising new areas, including Urumqi, a wealthy and-even by China's standards-exceedingly fast-growing city in China's northwest corner, near the Kazakhstani border.Report Typo/Error