Russia's economic crisis hurting Italian fur industry

New York - Russia's economic woes are being felt by the fur industry in Italy. In 2015, sales of Italian fox furs and minks took a plunge. The unusually warm weather in the Northern parts of the United States this winter did very little for their profits as well. The Russian ruble's decline and rising oil prices certainly weren't help fur sales in Russia either.

PwC reported that Italian fur producers saw a 7.9 percent plummet in the Italian fur trade to 1.52 billion dollars for the year 2015. The main declines were in the areas of styling, garment making, and retail sales.

Exports to Russia plunged 34 percent and exports to the Ukraine plunged 30 percent. Auction prices of luxury hides like sable also fell.

Demand for fur has slowed so much that Italian furriers have been slashing prices in countries like Russia, Ukraine, China, South Korea, and the Middle East.

Italian designer Vinicio Pajaro told WWD that in 2014 the Russian market represented 70 percent of total sales for his eponymous fashion fur company. In 2015, the Russian market only represented 50 percent. Furriers do have hope for the European markets in 2016, however.

“Europe is showing positive signs. I am starting to believe a lot in the future of the European market, but the problem with Italian stores is they make orders and then you don’t have the certainty that they will pay,” Pajaro said to WWD, noting that his sales overall fell 15 percent in 2015. “I have faith that in 2015, we will rise again.”

Robert B. Cahill, the vice president of North American Fur Auctions, noted that prices of auctioned furs in the U.S. and Canada fell 50 percent in 2015.

The good news for the fur industry is that they definitely have proven they have a future with younger customers. Parkas with fur trims from brands like Canada Goose have put fur on more members of the millennial generation than the fur industry and luxury brands originally would have conceived.

Brand's like Diego M and Albertalli are confident that they can rebuild their business in Russia. In the meantime, they are hoping price reductions in other markets will help them weather the economic crisis in Europe. They have also begun introducing new offerings like dyed mink and fox mixed with cashmere, shearling, and leather.