Feeling the pinch … Judith Tratner, owner of Australian Ugg Boots, has seen sales consistenly decline over the last few years. Photo: Simon O’Dwyer
A SLUMP in overseas sales of the classic Australian ugg boot has triggered a collapse in global sheepskin prices and left farmers with a pittance for their once highly prized hides.
American footwear giant Deckers, the predominant company in the international ugg boot market, has reported a sharp fall in sales growth for the shoes, prompted by a mild northern winter and Europe’s economic woes.
Sales of the company’s Ugg brand boots slowed markedly in the three months to March this year, spurring a fall in sheepskin prices by up to 70 per cent and signalling a change in fortunes for the global juggernaut, which sold more than $US1.2 billion worth of Ugg shoes last year.
Bucking the trend … English tourist Karina Sharpe tries on a pair of uggs in the Rocks. Photo: James Alcock
Even the best quality skins, usually a lucrative by-product for sheep farmers, now fetch as little as $10 a piece, down from $30 during last year’s peak, the Meat and Livestock Australia sheep meat analyst Robert Barker said.
“The skins would go a long way to covering costs, so [the fall in price] has made it just that bit tighter for farmers this year,” Mr Barker said.
An increase in Australian lambs to the slaughter after years of drought has also helped push prices down, he said.
The director of Australian Lamb Skin Processors, Darren Vinton, said stockpiles of skins and boots mean orders from overseas buyers, mostly from China, have dropped substantially.
”If [the northern hemisphere nations] don’t get a cold winter again … it will have a flow-on effect to our business next year,” he said.
Hailed variously as a wardrobe must-have and a hideous fashion faux pas, ugg boots unleashed international sales pandemonium eight years ago after being embraced by celebrities such as US talk show host Oprah Winfrey, who famously bought 350 pairs for her staff.
As shops ran dry at the peak of the craze, bidding for a pair on online auction sites topped $US500, and the trend soon spawned designer collaborations and, more recently, novelty styles such as a wedding range.
The editor of Vogue Australia, Edwina McCann, believes the present dip in sales is cyclical.
”They are stocked in places like Le Bon Marche, the best department store in Paris, sitting there next to Christian Louboutin and Chanel,” she said.
English tourist Karina Sharpe, 18, was helping to keep sales alive last week, shopping for a new pair of boots after wearing her previous pair down to threads.
“Our Australian friends say you have to take ugg boots off when you go outside, but they are so comfortable, I wear them everywhere,” she said.
However, a drop in tourist numbers has also prompted a slide in domestic sales, said a spokeswoman for the Queensland manufacturer Ugg Australian Made, which operates in the Rocks.
1. From a sales high of $1.2 billion last year Ugg boot sales have
slumped 30 per cent. What does this translate into current sales figures?
2. What factors account for the sharp fall in Ugg boot sales?
3. How has the drop in Ugg boot sales impacted on price for sheep skins?
4. Which country is a significant buyer of Ugg boots?
5. In terms of marketing, how did the rapid increase in demand lead to product extension?
6. Which of the 4Ps of marketing was Oprah Winfrey engaging in when she featured them in her show?
8. Which niche did the Ugg boot occupy in the footware category?
9. Deckers Outdoor Corporation claimed trademark rights when it purchased the business. What does this mean?
10. Calculate the percentage increase in sales in 2011 over the previous year.