THE FUR TRADE: PAYING TOP DOLLAR FOR PELTS (Published 1981) (2024)

The prices are ''crazy, crazy,'' one man mumbles. A second man drops out of the bidding, chomping glumly on his cigar. But Joseph Charles Reich, sitting in the center of the auction room, raises a manicured, gold-braceleted hand and buys another bundle of pelts. By the end of the two-day auction, Charlie Reich will have bought some 60,000 mink pelts, nearly one-third of the total number sold, and he will have spent $3.5 million.

In the small, clannish and immensely profitable world of fur, Mr. Reich, at 58, dominates a coterie of so-called skin dealers. Although industry figures tend to be guestimates, Scheflin-Reich, which he founded with Murray Scheflin in 1955, is generally thought to be the country's biggest mink dealer, with estimated annual revenues of $30 million to $35 million, and a significant factor in the international industry. It sells mink pelts to such well-known houses as Revillon and Ben Kahn and to countless smaller manufacturers. (The largest dealer in all skins is said to be Anglo-American Fur, also in New York.)

The fur auction season, which began in December, ended last week with a series of mink sales at Hudson's Bay on 30th Street in New York. At the auctions, Mr. Reich and his colleagues buy the stiff, dirty and smelly skins that they then sell to manufacturers, who transform them into the coats worn by elegant women - and, increasingly, by men - around the world. (The rest of the year, the dealers supervise the ''dressing'' of the raw skins, match the pelts and sell them to manufacturers.)

''It's very comforting that the whole world wants mink,'' says Mr. Scheflin, who is 70. Indeed, there is no shortage of buyers these days. Last year, retail sales of fur coats in the United States reached $944 million, according to the American Fur Industry, and they are projected to pass the $1 billion mark this year. Furthermore, with American fur craftsmanship world-renowned, United States pelts and coats have become a big export business. The United States shipped $552 million abroad last year, compared with $329 million in 1976; while raw skins accounted for most of those sales, coat exports are growing far more rapidly.

Business has not always been so good. Since the 1950's, when every American woman supposedly implored, ''make mine mink,'' fur coat sales in the United States had plummeted from about $600 million a year to $279 million in 1970. Sales were depressed by the general wave of protest stemming from the Vietnam war, a revulsion against conspicuous consumption and an objection to killing animals to make expensive coats. Furthermore, the industry was producing shapeless mink coats while customers were looking for flair.

But in the early 1970's, manufacturers turned to Seventh Avenue designers, and fur turned into a fashion. Concern with social issues subsided, the ''Me Generation'' flourished, and by 1975 the industry had made a resounding comeback. By the time Nancy Reagan swept through the Inaugural whirl, not in a respectable Republican cloth coat but in her Lunaraine mink, no one cheered louder than the furriers.

Along the way, however, the industry contracted sharply. Dressers, the specialists who tan the leather and beat, kick, wash and grease the raw skins into sleek and silky pelts, were among the casualties. ''There were 86 dressers and dyers in 1946,'' recalls John Cucchiara, a partner in Manhattan Fur Dressing, one of the biggest dressers. ''Now there are six.''

The number of manufacturers, which totaled several thousand in the 1940's, has fallen to about 600. Until recently, fathers did not encourage their sons to join the ailing trade. ''This is one of the most personalized businesses in the world,'' said Fred Goldin of Goldin-Feldman International, whose daughter joined the company a few months ago. ''When the head of a company dies, the company disappears.''

At Scheflin-Reich, however, there appears to be no doubt about the future of the trade. Mr. Reich's two sons are managers, and his grandson works there part-time. For Mr. Reich, who was born in Warsaw, emigrated to this country from Palestine in 1938 and learned the business as a teen-ager by going to work for a dealer when ''I didn't have two cents,'' the skin trade has truly been a rags-toriches story. Mink has paid for a home with a pool in Connecticut, a Mercedes, a wardrobe of well-tailored suits and gold jewelry for Mr. Reich and five fur coats for his wife, an interior designer.

''We always did well,'' he says of his company. Each year, the company buys some 700,000 skins at auctions around the world. Much of the buying is done overseas, in Scandinavia, Leningrad and London, where Hudson's Bay conducts the world's biggest fur auction; there are also auctions in Minneapolis and Montreal. But the biggest auctions for mink are in New York, and the quiet, impeccably-groomed Mr. Reich dominates them.

Before he bids on the furs, Mr. Reich visits the ''cold rooms'' of Hudson's Bay, to examine and price the pelts. The average male pelt costs $60, the pelt of a female - prized for its lighter weight and silkiness - is $65. (Between 50 and 60 pelts go into a full-length mink coat, which retails for between $7,500 and $15,000.)

THE skin dealer has no orders from manufacturers yet, only an approximate notion of what he will need, and thus he is taking a gamble. By summer, when the manufacturers have shown their samples to retailers and received orders, the price of pelts may have fallen, and Scheflin-Reich will be forced to sell at a loss or hold the furs until the market improves. ''I've taken a beating many, many times,'' says Mr. Reich, although he adds that the price has not dropped by as much as 10 to 20 percent in the last eight years. Lately, however, the price of skins has been rising.

Stiff with dried blood, the pelts hang looped together on cords like so many fish that didn't get away. The top-of-the-line Blackglama minks, on which Mr. Reich bid last week, hang leather side out, fur side in. Mr. Reich inspects a sampling for size, color and silkiness of fur. To him, slight discolorations in the stiff leather indicate that the furry inside is also flawed, and he lowers his price. Where the fur is visible, he ''breaks'' the skin, folding it back to examine the color of the underfur. In the Blackglama, for example, the darker fur is most desirable.

Acquiring a feel for fur is not easy. ''It took me five years to learn,'' says Alfonso Telese, a vice president of Revillon, wiggling his fingers. Mr. Telese, who worked for Scheflin-Reich before joining Revillon, says of Mr. Reich, ''He buys the top.''

At the auction last week, Mr. Reich paid the top price: $290 per pelt for a 50-pelt bundle of Black Willow females. ''I paid more than I expected,'' he admits during a lull in the bidding, but he bids steadily. In the auction room are other skin dealers, brokers and manufacturers buying for their own account. In the last three rows, mink ranchers watch the bidding with equal intensity, recording the prices with ball-point pens capped with Blackglama mink.

After the auction has ended for the day, manufacturers start telephoning Scheflin-Reich. The conversations tend to be to the point, according to Mr. Reich. The manufacturer asks him what he bought, and he tells the caller the number of bundles he purchased from different breeders.

''How much?'' the manufacturer asks. ''Reasonable,'' says Mr. Reich. ''They're mine,'' says the manufacturer, and with those words, he commits himself to an order that may represent an outlay of $1 million or more.

''When a man tells you, 'They're mine,' you don't have to sign any contracts,'' says Mr. Reich. ''That's it. Always.'' To cover costs and make ''a nice profit,'' Mr. Reich says, he charges manufacturers 10 percent above the price he pays. But the financial relationship between manufacturer and dealer does not stop there. ''We do everything - buy, sell, finance,'' says Mr. Reich. Because of the seasonal nature of the industry, it is common for dealers to extend credit to the manufacturers for six months, charging interest from billing date, at the prime rate or, in some cases, 1 1/2 points higher.

Scheflin-Reich, like virtually all of the other skin dealers, manufacturers and dressers, as well as the small specialty companies that sell silk linings and finish fur garments, is located in New York's fur district. Within its borders - 27th Street to 31st, the Avenue of the Americas to Eighth Avenue - the furriers present an peculiarly inelegant picture of an industry swathed in glamour. Perspiring shirt-sleeved men, clutching lush fox coats, straggle from manufacturer to finisher; others tote pelts from dealers to manufacturers, who ''borrow'' them before placing an order.

At the Beaver Room in the Traders Cafe, the furriers' restaurant, the industry's clannishness thrives amid a mul-tinational atmosphere. Manufacturers of Greek ancestry do business with Jewish dealers who emigrated from Leipzig and with Middle West mink ranchers. Often there are buyers from West Germany, Italy or Japan. They see each other at shows and auctions, and everyone knows everyone else. ''You go anyplace in the world,'' says Mr. Reich of his tight circle of colleagues, ''and if there's a fur man there, you'll know him.''