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Fur council plays down Hudson's Bay's decision.

Fur council plays down Hudson's Bay's decision

One of the largest fur retailers in Canada has announced that it is phasing out the business on which it was originally built.

However, according to the Fur Council of Canada, Hudson's Bay Co.'s decision will not affect the remaining fur retailers or their suppliers.

David Sebben, the fur council's marketing director, estimates that sales of furs in Canada will total $350 million in 1990/91.

Sebben said The Bay estimated its fur sales would only total $7 million for the same period.

He suggested that department stores have been losing fur sales because they cannot offer the same personalized attention and expertise that independent furriers can, not because of pressure from the anti-fur lobby groups.

"You have to realize that The Bay is the last large retailer to wholly own their fur salons. All the other big players have leased out," said Sebben.

The fur council notes that the pattern has occurred throughout North America. In recent years, for example, Eaton's, Holt Renfrew and Simpsons have changed from store operations to leased operations which are being run by fur-marketing specialists.

"You are dealing with a very high-end product, and the stores don't find hiring or retaining special expertise profitable. That is understandable," said Sebben.

Despite claims from animal rights activists that the closing of The Bay's fur salons was a victory, Sebben said retailers are reporting that consumers are conscious of animal rights activities, but are not responding by changing their buying patterns.

"Consumers still view furs in a positive manner," said Sebben.

"The general state of the economy is the number one factor. There isn't as much disposable income out there, so we are definitely being affected by the recession."

Sebben pointed out that Hudson's Bay remains in the fur business because it continues to store and repair fur garments. He clarified that the decision to cease fur sales has had no effect on the operation of the Hudson's Bay Fur Sales Auction House.

The auction house was purchased several years ago by its management and fur producer groups and continues to use the Hudson's Bay name under licence.

$100 MILLION

Hudson's Bay Fur Sales is North America's largest fur auction house, with sales of more than $100 million annually.

A second auction house, North Bay Fur Sales, was recently closed and its owner/operator, the Ontario Trappers Association, is experiencing troubled times.

The recession, anti-fur lobbying efforts and rapidly declining fur prices forced the Toronto Dominion Bank, which is owed $4 million, to place the auction house in receivership. The doors were closed on Jan. 4 following failed attempts to secure loan guarantees from the province.

Sales at the auction house declined to $9 million last year from a high of $33 million during the 1979/80 sales season.

It was estimated that the auction house would realize sales of only $5 million this year, $5 million short of the break-even point.

Sebben said the closure was no surprise and will have little impact on retail sales because the auction house had only five per cent of all fur on the market.
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Fur Council of Canada; Bay Co.
Author:McDougall, Douglas
Publication:Northern Ontario Business
Date:Mar 1, 1991
Words:523
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