7/13/2012

Ugg Boot Sales Drop Causes Collapse In Sheepskin Prices

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 percent and signaling a change in fortunes for the global juggernaut, which sold more than US$1.2 billion worth of Ugg shoes last year. 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 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.