Handbags to get even more expensive. Here's why:

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    March 5, 2007 -- Anyone who's suffered sticker shock while shopping for a new leather handbag recently, take note: pricey bags look set to get even more expensive.

    Demand for these bags - as well as other leather products such as shoes, jackets, upholstered furniture and car seats - has soared in recent years, far outstripping the supply of cattle and sheep. As a result, the price of raw hides has risen steadily, up 20 percent in the last year, according to Hidenet.com, an online market report.

    Many variables go into determining a product's price, such as labor, shipping and marketing costs. In the case of handbags, manufacturers have been using more exotic tanning techniques, such as washed leathers, and adding extra details such as metallic treatments or laminations to differentiate them in a crowded market.

    The strong euro has also played a role, helping to push up the price of imports.

    One of the bigger costs, by far, is that of raw materials such as leather hides. Calfskin, among the highest quality leather sought by handbag makers like Coach, tends to be in shorter supply than lesser grade skins.

    "A key reason behind rising handbag prices is the rising cost of raw materials such as leather," said Tim Schifter, the former owner of Le Sportsac, who along with Gwen Stefani, has launched a new accessories company, Schifter + Partners.

    Higher raw material costs won't affect all companies equally. Those likely to be hardest hit are smaller U.S. manufacturers. Coach, for instance, said it has offset most of the rise by shifting production to countries with lower labor costs.

    Shoes account for 55 percent of finished leather goods; autos and furniture make up 30 percent, and the smallest slice, 15 percent, comes from accessories and clothing, industry sources said.

    Unlike auto and furniture manufacturers, who have been squeezed by cheap Asian imports that have kept a lid on prices, shoe and accessory makers have found some wiggle room by upping the fashion quotient.

    Shoe prices, for instances, have risen by more than 10 percent since 2004, according to the NPD Group. Likewise, handbag makers said consumers are showing little resistance to price increases, as long as the merchandise contains additional embellishments like brass hardware.

    Several years ago, Coach's most expensive bag sold for $290. Today, the company counts 13 percent of its overall sales from bags priced at $400 and above. "It's our fastest-growing category," said Coach Chief Executive Lew Frankfort.

    Demand for leather has been on the rise for some time, accounting for a quarter of all upholstered furniture sold in the U.S., up from 7 percent two decades ago.

    The number of available hides depends on meat consumption, since cows and sheep are never slaughtered for their skins alone. Since a low point in 2003, the consumption of red meat has been on the rise, up about 5 percent to 51.5 million metric tons, according to the Foreign Agricultural Service.

    "People want to eat meat," said Don Ohsman, Hidenet's publisher, "but, even more, they want to buy leather."
  2. Interesting article - thanks for posting!
  3. interestig post! thanks :yes:
  4. You always post the most informative threads. Thanks maxter!
  5. Great article, Maxter. This definitely flies in the face of those activists that tend to minimize the demand for leather products.
  6. Thanks, Maxter. Oh, the aspects of the world of fashion that we don't think about! Very enlightening.
  7. Interesting article maxter. Thanks for sharing!
  8. wow very interesting and i am VERY happy to read "since cows and sheep are never slaughtered for their skins alone. "

    This is very important to me and the reason why i wont carry exotic skins or furs or anything of that sort necause those poor animals die just for the sake of fashion thank goodness these animals that make out lovely leather bags are eaten as well!!!!

    (i doont eat anything but chicken so i am glad there are people to consume the meat from cows and sheep or i would have to morally stop carrying leather, and that would SUCK!) ;)
  10. interesting article.. thanks for posting!
  11. slush- that's awesome that you don't eat red meat. I'm such a red meat lover I doubt I could give it up... I need my steak!

    But, interestingly, some guy (vp or something important) from PETA gave a talk this year and handed out a lil manual about how badly chickens are treated.. like worse than other animals. I almost stopped eating chicken after that but I've recovered now.:shame: Just something I didn't really know or expect!
  12. CTGIRL! you are so right i am sure chickens are treated so bad i try not to even think about it

    i was veggie from when i was like 9 till i was about 20 i just love animals so much i couldnt eat them
    i have never in my life had steak! :smile: ive had a burger before and a hotdog but not since i was like 8
    never steak tho! :smile:

    But i started eating chicken about 3 years ago because i really needed the protein!
    but i wont eat off the bone, and i wont watch it being made or touch it myself when its raw haah
    i am still a little weirded out by it but its yummy

    IM kinda glad i never had steak cause ive heard its so good i prob wouldnt be able to pass over it but i dont know what im missing so its ok!
  13. I think if I paid attention to PETA, I'd stop eating meat and dairy, wearing leather, etc. Since, I'm not ready to do that, paying attention to PETA is on my moral to-do list. For now, I'm telling myself that I'm top of the food chain, so I get to eat and wear the other animals. I try to avoid products that are widely known to be made from animals that are killed inhumanely, but I know it's a cop-out. I really think that morally there's no difference between wearing exotic or other skins or furs and bags and shoes made from cows and sheep (and oftentimes lambs and calves). Even though I don't wear fur, I try to not judge women who do wear it, because I know it's hypocritical.
  14. Very interesting, thanks a lot for sharing.
  15. great article, good to know.