FURS: End of the Boom

The U.S. fur industry last week shook like a badly frightened rabbit. There was much to be frightened about. Retail fur prices were being cut generally from 25 to 50%. An auction of 25,000 ranch-raised mink brought prices 30% below those of last December, and only 60% of the pelts were sold. Prices of fox, hardest hit of furs, dropped so much at auctions that fox farmers were holding their pelts off the market.

But what knocked the breath clean out of fur men last week was the news that Manhattan’s Motty Eitingon Inc., the nation’s largest single operator in furs, had filed in bankruptcy, begged for a six months’ moratorium on its obligations. Eitingon (rhymes with biting gone), who had come a cropper once before in furs (in 1932 he had to reorganize after a $7,500,000 loss) had got himself in trouble again for the same reason—overexpansion.

The originator of “Bonmouton,” a beaver-like fur made by plasticizing sheep pelts, Eitingon had enthusiastically expanded, bought seven processing plants, talked of selling 15,000,000 mouton coats (from $100 to $200). But the processing took longer than anticipated and he found himself short of ready cash.

In its present none-too-healthy state, the fur industry could not afford to let Eitingon go to the wall. Other furriers rallied around. And with a $250,000 loan from the Irving Trust Co., it looked as if Eitingon might squeak through—given enough time. A not unconsiderable factor: mouton has held up in price.

But the fur industry knows that it is due to go through an economic wringer. Furriers made the most of the easy-money period during the war and immediately afterwards. When OPA controls came off, prices of luxury furs doubled; medium-priced furs went up 50%. The buying rush has come to an abrupt end because of 1) the unseasonable warm weather, 2) fur imports from abroad, and 3) buyers’ resistance to the high prices.

Even with the reductions, many fur prices are still well above prewar prices. Fur men, however, could not quite believe what seemed to be happening in their $500,000,000 industry. They looked around for hidden villains, seemed to think price-cutting the cause of their troubles rather than the result. Said the Fur Trade Review: “We cannot help but wonder whether [stores] have exercised the best wisdom in cutting prices. . . .”