By Janice Kew, Andrew Roberts
Crocodile-skin handbags can be to die for. Really.
As demand from the world’s elite surges for the skins, luxury-goods companies from LVMH Louis Vuitton Moet Hennessy SA (MC) to Gucci-owner Kering SA are making acquisitions to secure supply of the beasts, whose habits can make simply collecting their eggs a matter of life and death. Raising the reptiles from hatchling to arm candy without scratches from other crocs is another major challenge.
“Louis Vuitton, Prada (1913), Gucci are trying to elevate the level of perceived exclusivity of their brands, and exotic-skin products really help in this,” said Mario Ortelli, an analyst at Sanford C. Bernstein in London. After LVMH’s purchase of a farm this year and Kering’s of a tannery, “I expect they will continue to make selective acquisitions.”
Exotic animal skins make up almost 10 percent of the total revenue from handbag sales for luxury brands, at least double their share a few years ago, Ortelli estimates. The incentive for luxury-goods companies, many of whom are wrestling with sluggish demand for their most widely available goods, is clear: crocodile handbags can sell for 30 times more than their bovine counterparts. The luxury accessories market was worth 57 billion euros ($77 billion) last year, according to Bain & Co.
While salt-water porosus crocodiles found in Australia are the trickiest -- with enough skin produced for about 25,000 bags a year -- no crocodile is easy or cheap to raise, and it takes years to breed them. More....