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Getting a Handle on the Steep Price of Leather

The cost of calfskin has luxury houses howling

Emanuele Carminati Molina’s latest beef is the cost of leather. The chairman of Valextra, an Italian maker of high-priced handbags and luggage, says the unblemished cowhide his company relies on is becoming an ever more precious commodity: The price of calfskin, the king of luxury leathers, surged 21 percent in the first half of 2011, on top of last year’s 43 percent increase, according to Italy’s tannery industry union UNIC. “There’s less top-quality leather in circulation, and it costs a lot more,” says Carminati Molina. “This has an impact on the price of all products.”

Who’s to blame? No one has uncovered a cabal of leather speculators just yet. It’s just traditional supply-and-demand forces at work. Shoppers from Paris to Ulan Bator have become more discerning in the wake of the financial crisis. Those willing to spend thousands of dollars on a handbag now favor animal skin over canvas and other materials, prompting luxury brands such as Louis Vuitton and Gucci to add more leather to their collections, increasing demand. “Clientele, wherever in the world, is not duped” by prices that do not reflect value for money, says Christian Salez, chief executive officer of Belgian luxury goods maker Delvaux.