205 IndustrIal CIrCle, stoughton, WI, 53589, usa tel : 1.608.205.9200 | fa x : 1.608.205.9210 | W W W.nafa .Ca

65 sk y Way ave, toronto, on M9W 6C7 Canada t el : 1.416.675.9320 | fa x : 1.416.675.6865 | W W W.nafa .Ca

NAFA MArket UpdAte

Wild Fur Market update – august 2016

A very difficult selling season has nearly come to an end. There is no doubt that it has been unbelievably disappointing for most articles. To date we have sold 100% in raccoon, muskrat, beaver, wild mink, sable, fisher, otter, red and grey fox. By the end of September we believe the balance of our previously offered wild fur will be sold 100%, which at least is a positive in an otherwise negative market. Yes, it is true articles like better trimming coyote, lynx cat, sable and fisher to name a few did OK, but beaver, raccoon, muskrat and otter continued to be unprofitable for most of our wild fur producers. A huge decline in ranched mink prices due to overproduction started this trend in September of last year, which continued throughout most of the selling season.

Looking ahead, with a reduced ranch raised mink quantity available next year, we are cautiously optimistic that later in the 2017 selling season the wild fur articles that were most depressed will have a better reception in the marketplace. Next year, we as a company will keep a very close eye on our expenses and re-channel as much as is necessary to wild fur promotion, pursuing every new potential customer we can. At a time like this, all of us have to watch our expenses, but at a time like this it is also very important that we keep on promoting – that is where our future lies. Keep in mind that we, along with the Wild Fur Shippers Council, are the only ones throwing serious financial support behind these programs and no one else.

Next selling season we will open with a February mink and selected wild fur offering, but our largest and most attractive offering of wild fur will be sold in our May sale. We truly believe that selling later in articles like muskrat, raccoon and beaver will help not only the clearances, but also the price structure. History has shown most of our wild fur producers who have been in the game for some time that a major correction in the market like we have just experienced takes a few years to fully correct. We believe it will not be any different this time around.

It will again be extremely important to trap and ship only fully prime, seasonal articles. We have witnessed this past season how discriminating the market has been towards inferior skins. The market has, in comparison, paid premiums for better handled, larger size, better quality and coloured skins. For the foreseeable future we expect this to continue.

For those of us who have been in the fur industry for essentially a life time, we have already experienced significant blows to our livelihood many times in the past. Through perseverance and careful planning we will also see our way through this and once again see better times ahead. Make no mistake about it, North American Fur Auctions has, and always will be, fully committed to the wild fur industry, no matter what it takes.

We will all continue to do what must be done. At the end of the day, however, we will need co-operation from world economics and favourable weather patterns to aid the resurgence of a proud and important part of our history.

Herman Jansen

Managing Director

NaFa – MarketiNg your Fur to the World

We are facing changing times in the world fur markets as Herman has noted in his letter (previous page). We are now exploring new markets, new customers and new uses of wild fur. Over the past 3 years, our wild fur campaigns have broadened to every global market, and have expanded to fashion companies outside of the traditional fur trade.

To help achieve wild fur promotional success, NAFA is running an ambitious Wild Fur Strategy to help support the current positives, and to develop more markets, more uses and more demand for your wild fur.

Following is an outline of some actions and successes of our strategy.

Fashion promotion and supportKeeping fur “in fashion” and expanding its reach in the world’s fashion circles is the number one priority, and is absolutely vital to the fur market. If fur remains fashionable in the eyes of the major fashion brands, such as Fendi, Gucci, Louis Vuitton, Yves St. Laurent, Michael Kors, Alexander McQueen, Canada Goose and others, it will be demanded by buyers in important markets like Europe, the United States, China, Korea and Russia.

designer outreach – europe andNorth americaPromote directly to major fashion brands in Europe and North America, in cooperation with the dressers and dyers in Italy and France.

trend promotion and influence – China and koreaWhile Europe and North America remain the fashion market trendsetters, China is the world’s largest and most important consuming market of fur. In addition to supporting current wild fur trends in China such as trim, bags and liners, NAFA’s outreach helps to play a role in pushing larger trends and design concepts from the haute couture and luxury fashion houses in fashion capitals like Paris, Milan and New York to mass-market production in places like China and Korea.

F ashion trade outreach – europe, North america and ChinaThe first issue of NAFA’s in-house Fashion Magazine, Front Row: Fur in Fashion, was very successful in opening doors and introducing

new brands and fashion companies to NAFA and our diverse wild fur collection. We look forward to launching the second issue this fall, featuring the Fendi-NAFA Top Lot of Lynx Cat on the cover.

March 2016 - MiFur gala Finale: 10 of italy’s top fashion companies designed and promoted NaFa Wild Fur in a unique capsule collection

removing Barriers to Wild Fur Markets around the globe

With the Russian economy hurting all consumer products in that country, wild fur is being hit the hardest. As we explore other markets, we have found out that American retailers such as Neiman Marcus and Bloomingdales are shying away from American Raccoon fur products due to labeling and promotional issues. The CSR program is designed to address those concerns and keep other companies using wild fur in their fashion collections. In addition, we are currently working with global fur trade interests, including Chinese associations, to reduce the import tariffs for wild fur going into China.

As you know, there is a lot to do, and when developing new markets it takes time, patience and perseverance. As it has for 346 years, wild fur remains a key part of the NAFA promotional strategy.

NaFa’s Corporate social responsibility (Csr) program

Many high level fashion brands are being lobbied by animal rights groups to stop using fur. This program will provide the necessary information to assure the most important and influential fashion brands that they can, and should, continue to use wild fur in their collections.

As part of NAFA’s CSR / Wild Fur Guarantee, we will be promoting Trapping Standards, Best Practices and government regulations in the United States and Canada which have helped to maintain healthy wildlife populations and address animal welfare concerns over the past years and decades. Trappers, the industry and governments have invested tens of millions of dollars

into these initiatives, and this is the perfect opportunity to present all of that hard work to top brands.

Rob Cahill

Senior Vice President, Marketing