January 14, 2019
Dear Producer:
On behalf of everyone at NAFA, I would like to take this opportunity to wish you a Happy New Year!
While we don’t yet know what the market has in store for the fur industry in 2019, it still appears that this auction season could be a challenging one for our industry. NAFA is currently doing all that it can to prepare for this potential reality.
In the meantime, however, NAFA is pleased to report that its Board of Directors has just approved the Company’s audited financial statements for its fiscal year ended October 31, 2018.
In summary, NAFA’s sales turnover for fiscal 2018 was $300 million, resulting in a small net profit for the year. This result, however, includes a couple of one-time provisions including costs related to NAFA’s acquisition of the Blackglama trademark in 2018. Therefore, after considering these one-time charges, NAFA’s adjusted pre-tax earnings in fiscal 2018 were surprisingly healthy given current industry circumstances.
While the average selling sale price of mink did decline during last year’s auction season as compared to 2017, NAFA sold nearly 10 million skins in 2018 as compared to only 7.5 million the previous year, when a significant amount of mink was directed to long term storage. This volume increase is primarily due to the impact of NAFA being able to consolidate the majority of all North American mink consignments following our acquisition of the Blackglama trademark. NAFA also sold more high value wild fur in 2018, coyotes in particular, and thus, the total wild fur turnover in fiscal 2018 was nearly 30% more than that of 2017.
In 2019, it appears that market demand for most wild fur articles will remain selective. However, trim articles such as coyotes and lynx cats are again expected to be in strong demand again this year.
Fiscal 2018 was also a record year for buyer clearances at NAFA. Following all 2018 auctions, Prompt Day payments received from buyers were close to 90% which is, in itself, an indication that the purchased goods were in demand and that buyers wanted to quickly put them into dressing and/or production.
NAFA, therefore, enters fiscal 2019 in a strong financial position and clearly focussed on what lies ahead. We remain a solid business built upon nearly 350 years of tradition across both good times and bad. NAFA is also keenly aware that it will ultimately be the quality of our response to any market adversity that will define our future and not the rumours and innuendos offered as truth by the competition.
Finally, I want to thank all of our loyal consignors for your ongoing support of our Company. We look forward to seeing many of you at one of our auctions this year.
Sincerely,
Douglas Lawson
President & CEO
