PARIS Dec 5 Chanel has acquired its long-time
lamb hide provider, the French tannery Bodin-Joyeux, in the
latest purchase by a luxury brand of a partner that supplies top
Chanel, which belongs to the Wertheimer family, is the
second biggest luxury brand in the world, behind Louis Vuitton
and ahead of Ralph Lauren, with nearly 6
billion euros ($8 billion)in estimated annual sales.
Like rival Hermes, Chanel has been buying up
partners to guarantee long-term supplies and control quality,
from plant growers for its Chanel No.5 perfume to embroiderers
such as Lesage for its couture collections.
The trend toward vertical integration - control from the raw
material to the shop shelf - gives luxury brands a competitive
advantage, raises barriers to entry and helps them defend the
high-quality image they want associated with their products.
Bodin-Joyeux is the first tannery Chanel acquired, employing
100 people in central France. It is one of its main suppliers of
supple lamb leather, known for its silky feel and used to make
the brand's popular 1,500-euro quilt leather bags.
Bruno Pavlovsky, chairman of Chanel's fashion business, said
the brand had been working with the tannery for 30 years and
would continue to supply rivals as other Chanel suppliers
"Bodin-Joyeux are lambskin specialists and we wanted to
protect and preserve their know-how," Pavlovsky told Reuters in
an interview. Financial details of the transaction were not
Pavlovsky said Chanel still relied on about 15 different
tanneries and noted that the average price of high quality lamb
leather was rising as people were eating less meat and demand
kept growing - a trend which also applied to calf hides.
Pavlovsky estimated the price of lamb skin had risen by
about 25-30 percent in the past three to five years, about the
same order as for calf leather.
"We are eating less meat yet there is more demand and
production is not rising," Pavlovsky said.
Chanel, which started buying up partners in the late 1980s,
today owns several niche fashion suppliers including Lesage, the
feather specialist Lemarie, the hat maker Maison Michel and the
Last year, it acquired the Scottish cashmere company Barrie
Gucci-owner Kering, Hermes and LVMH have also been
buying up tanneries in an effort better to control their supply
chain. Recently, Hermes and LVMH even bought crocodile farms.