Prada is the latest house to acquire a link in its supply chain. The Milan-based brand has entered into a deal to gain a controlling interest in France's Tannerie Megisserie Hervy, which specializes in lambskin tanning, in particular soft plonge nappa leather. Prada entered into the venture with Tuscan tannery Conceria Superior, a long-time industrial partner of the maker of Miu Miu bags.
This move is part of a larger trend amongst luxury bigwigs. After years of horizontal acquisitions with large conglomerates, like LVMH, Kering and Richemont buying up smaller luxury brands, they have continued buying brands, but have also turned their attention to suppliers, snapping up many suppliers and smaller, specialist companies to ensure craft skills and high-quality parts remain accessible amidst annual growth.
You may recall that Chanel made headlines last year for acquiring its long-time lamb hide provider, France-based tannery Bodin-Joyeux. (The house that Coco built actually began its acquisitions years ago, buying into Desrues, a button maker in 1984; Lesage, an embroidery company, in 2002; and Barrie, a Scotland-based cashmere manufacturer, in 2012). Similarly, luxury conglomerate, Kering, which owns Bottega Veneta, Gucci, Alexander McQueen, and Balenciaga, among others, acquired a majority stake in French tannery France Coco for an undisclosed sum last year.
"This acquisition will allow Kering's brands to further secure a sustainable supply of high-quality crocodilian skins," a company spokesperson said. "This vertical integration is part of the strategy of Kering to better support its brands to better reach their potential."
Before that, LVMH Moët Hennessy Louis Vuitton bought into Heng Long, a crocodile tanning company. In October 2011, the French brand offered $160.8 million for a Singapore-based tannery, paying $0.60 each for all 268 million shares of the company.
And not to be outdone by anyone, there is Hermès … In 2009, the Paris-based house, known for its Birkin and Kelly bags, resorted to breeding its own crocodiles on farms in Australia to try to meet demand for its leather bags. According to the company’s then-CEO, Patrick Thomas: “It can take three to four crocodiles to make one of our bags so we are now breeding our own crocodiles on our own farms, mainly in Australia.”
Hermès reportedly faces a major challenge producing 3,000 crocodile bags a year, Thomas said, adding: “The world is not full of crocodiles, except the stock exchange!” Hermès’ leather goods, which account for 40 percent of its business, have been the most robust in the current downturn with the group taking on 50-100 leather workers this year to add to the 2,000 craftsmen it already employs at French sites. The house also purchased a French calf leather tannery, Tannerie d’Annonay, in 2013. Richemont, your move …