More luxury brands invest in production of raw materials to safeguard against price hikes
World’s leading luxury group LVMH agreed to pay 92 million euros for Heng Long, a Singapore based crocodile leather supplier. Bernard Arnault, owner of LVMH, said that despite the very high price (double the value of the company of the Singapore stock exchange and twenty one times its profit) it was a strategic investment.
According to luxury maison Hermes, the price of crocodile leather has increased by 20% in the past six months, while the Italian Leather Association confirms the price of sheep and goat leather increased by 40% in the past six months.
Hermes was among the first major luxury players to secure its access to rare leathers by taking control, several years ago, of the two most important crocodile leather suppliers. Italian luxury brand Gucci owns reptile leather supplier Caravel Pelli.