july 2014

NORT H A MERICAN F UR AUC T IONS

65 Skyway ave. ToronTo, on M9w 6C7 Canada | Tel: +1.416.675.9320 | fax: +1.416.675.6865 | www.nafa.Ca

NAFA NEWS

> President’s message > rob Cahill Joins naFa > naFa welComes new neighbors> sPotlight on the trimbergers> teChnologiCally delivering innovation in grading ProCess

Dear Rancher,

The selling season we have just experienced has been one of the most challenging in a long time. However, despite the dramatic decreases in market levels and prices, NAFA still expects to show an operating profit this year. This is a significant achievement that should not be taken lightly – it demonstrates that your auction house has been prudent and judicious in its decision making processes during the more prosperous years of high pelt prices. This was done strategically to insulate you and the company during market fluctuations and downturns. NAFA’s large volume and efficiencies in the handling of pelts has also played a large part in ensuring the continued profitability of your auction company.

By far, NAFA is the market leader in North America and is now the second largest mink auction house in the world. As we move forward in an uncertain marketplace, now more than ever, it is important to know that the place you choose to market your furs has a steady, strategic approach to business and is on solid financial grounds.

It is also important to note the following:

- NAFA consistently yields the best prices for your mink – this year we posted results that exceeded our competitor in most every category, despite the challenges in the marketplace.

- Buyer attendance at NAFA in our February and May auctions was solid, notwithstanding higher attendance in previous years resulting from a more robust market. Attendance at our auctions is globally competitive and is not contingent on another company’s solicitation efforts.

- NAFA’s volume –10 million mink this year alone - ensures your fur is seen by and marketed to the most influential and biggest buyers in the world.

All eyes will now be focused on the upcoming year and NAFA is doing everything it can to help steady and stabilize the market. These problems can be overcome with proper management and product promotion. NAFA continues to make significant inroads in the fashion design industry and we need to continue these efforts, despite the current market related problems. Rest assured, you have NAFA’s commitment that we will continue to work as hard as we can to overcome these challenges to return to a more prosperous market.

Sincerely,

Michael D. Mengar, President & CEO

President’s message

NAFA is pleased to announce the appointment of Rob Cahill as Senior Vice President of International Marketing for NAFA effective August 1, 2014. Many people already know of Rob from his days working at NAFA as Sales Manager, then as Executive Director of the Fur Institute of Canada and most recently, as Vice President of the Americas for the International Fur Federation. Rob’s extensive experience in the fur industry which includes policy, industry relations and international fur promotion, makes him the exemplary candidate to take on this position. NAFA remains committed to the IFF Americas and will be working with all parties to ensure a smooth transition.

It is, therefore, with mixed emotions that NAFA also announces the retirement of Diane Benedetti as Senior Vice President of International Marketing effective July 31, 2014. Diane has been in the fur industry for 35 years and 28 years with NAFA.

“To say that Diane has been a tremendous asset to the company is an understatement – her strategic vision and award winning marketing programs have played a key role in NAFA’s growth in the industry. She has been on the cutting edge of marketing in developing the NAFA brand labels internationally” said Mike Mengar, NAFA President & CEO.

Diane will remain with NAFA in an advisory capacity during a period of transition to assist Rob as he becomes more acclimated to his new position and she will remain available to NAFA as a consultant. NAFA would like to thank Diane for her tireless efforts, diligent work ethic and superior marketing programs.

“Please join me in welcoming Rob back to NAFA and celebrating Diane’s many years of NAFA service,” said Mr. Mengar.

For those of you wishing to contact NAFA’s head office in Toronto or Stoughton, it is important to note that NAFA has toll free numbers to save you some money.

rob Cahill joins NAFA

toll FrEE dialing to naFa

Toronto: 1-800-745-0693

Please jot it down and use it at your convenience.

The following is a copy of the recent press release posted to NAFA’s website:

Stougton: 1-800-872-3877(USA-FURS)

from Canada only

from the u.s only

van deurzen ranch: how the decision was made to set up shop in the u.s.

It is no secret that there’s been much talk in the ranching community that young people need to begin to take over the reins and get their feet wet in the mink ranching business – for the future of the North American market and indeed, for the future of the overall fur business. This is where Iwan Van Deurzen enters the picture – a young, energetic businessman who enjoys a challenge and has chosen mink ranching as his career. He’s not from America but he is a rancher and wanted to begin his career in earnest in North America. Van Deurzen watched his father work as a mink rancher in The Netherlands, and through his tutelage, Iwan decided to begin a ranch of his own.

Van Deurzen is only 26 years old, with a young wife and child and he is now living in the U.S. because he believes in the future of the mink business and understands the difference between a high quality mink and more commercial variety. Van Deurzen wants to produce a high quality, short nap mink and decided his future would be in North America.

“To come here was my own decision. I was at a NAFA auction,” he explained. “I saw the American mink [on show] and a few racks away the European mink. By the time I got home, I thought I needed to re-think what I was doing.”

Setting down roots in a foreign country, for a business that is known to be difficult, wasn’t an easy decision. But, once the decision was made, Van Deurzen jumped in feet first.

“When I first came to America, I bought mink first before I bought property,” he laughed. He clearly saw the opportunity and wanted to be a part of an industry with a solid reputation for raising a good quality mink. “Its an opportunity to grow and raise a better mink and learn along the way.”

Despite his youth, Van Deurzen knows there will be challenges and is pragmatic in his approach.

“I have [already] learned that you have to be careful. Prices can turn really quickly. It is important to take the time to grow, “ he said.

Shipping to NAFA seemed like the right choice as well, “I raise an American type mink and I think it is best with NAFA because of the short nap I raise.”

For Van Deurzen, there is a future for mink ranching and it is a future that he is embracing.

naFa WelComes our neW NEIGHBOrS

why shipping to nafa has given ranch ‘a leg up’

Having a true homestead farm is something that makes Gerard and Nick Trimberger proud. The Trimberger Ranch has been in the family since 1844 when the family settled in the U.S. The family and the ranch are intertwined –it is impossible to think of the Trimberger family without thinking about the ranch and its successes.

“We are the only homestead mink ranch in North America. This piece of land has no previous owners,” explained Gerard during a conversation with NAFA. “Our father [Joseph Trimberger] is the one who turned it into a mink farm back in 1955; he is the one who transitioned it from a dairy operation,” he said.

The family has been mink ranching ever since and has earned international recognition for its prized collection of mink. They credit their father, their wives, Beth, Joan and their mother, Glorietta for helping them become recognized as producing a premium product. “We spend more time with our animals sometimes than our families,” joked Nick.

Over the years, the Trimbergers have worked hard at the family business and have taken different approaches to marketing their mink. The best approach, they agree, has been marketing through NAFA. They point out that shipping to NAFA has given them the edge they need to compete in an increasingly aggressive marketplace.

“It has given us a leg up,” they noted as they discussed the NAFA rebate program. “It lowers our overall costs of production. But more than that, it allows us to spend money on capital projects that we normally wouldn’t do. We use all those funds for long term projects.”

n a Fa P rogr e s sionSince becoming loyal NAFA consignors in 1997, the Trimbergers have watched the marketplace and appreciated the steady approach NAFA has taken to become a market leader.

“There isn’t a shift in degree every two or three years. In the long run, NAFA is looking out for the ranchers,” noted Gerard.

Overall, the Trimbergers and their esteemed collection of pastels and sapphires look forward to more opportunities by marketing with NAFA in the future. Their homestead ranch has been an asset to them for generations and, with continued hard work and diligence, will be for future generations to come.

sPotlight on the TrImBErGEr rANcH

5

It is no secret that NAFA’s unprecedented and unparalleled growth in the last three years – the largest of all fur auction houses – has created some unique and complicated challenges in many different departments. One of the more demanding issues arising out of our growth has been ensuring that our grading remains consistent, despite a 30 percent year over year increase in consignments. Grading has always been NAFA’s hallmark and, with three grading facilities located on two continents in three countries separated by seven time zones, it is something that cannot be compromised, despite the growth. The almost overwhelming increase in volume over the last few years has made the issue more and more pressing. That’s why the Information Technology (IT) department became involved.

The challenge facing the IT department was daunting and demanding – streamline the grading process - create a coloring machine that could be deployed on any of our production floors and ensure that the end results produced consistent coloring, as precise as the human eye. In short, it was a task that had to be technologically advanced and bring a digitized solution to the most challenging phases of the grading process. The monumental task began in 2011 – a team within the IT department was assembled, tasked with research and development. Through a lot of strategic planning and harnessing the latest in technologies, the department rose to the challenge and was able to unveil four brand new coloring machines this year. The results were impressive and, once again, made NAFA the pioneer in the auction world. Our internationally renowned mahogany collection was successfully graded this year using this ground breaking technology and produced consistent coloring on all strings.

These new micro coloring machines are quite spectacular. They use something called Spectrophotometer technology which is patented and basically produces true-color measurement instrumentation

Technologically Delivering innovaTion in graDing ProcessBy Jeff vallianTvice PresiDenTBusiness sysTemiT services

6

(manufactured by X-Rite Technology.) NAFA has taken this technology and customized it with in-house software development to create a system that now effectively produces digital measurements for mink colors. We are affectionately referring to the digital measurements as ‘Pantone colors for mink’ - a standards based color reference system owned by X-Rite Technologies. If you’ve never heard of that before, it’s ok because all you really need to know is that ‘Pantone colors’ is considered a standard for color reference in many industries and is exchangeable over the internet. It uses numerically identifiable color swatches that are uniquely reference-able. And, NAFA is now producing pantone colors for its mink varieties – a first in the industry! This is in addition to the visual coloring that we have always used. Consider it a double way to ensure consistent coloring.

The next challenge will be to fully integrate these micro coloring machines in all of NAFA’s production facilities. NAFA is now busily preparing for the 2015 season with a goal of using these state-of-the-art coloring machines with demi-browns, pearls, pastels and more.

7

naFa neWs is published by

north ameriCan Fur auCtions

65 skyway avenue, toronto, on, m9W 6C7, Canada www.nafa.ca

toronto, on tel : 1.416.675.9320 toll Free : 1.800.745.0693 Fax : 1.416.675.6865

stoughton, Wi tel : 1.608.205.9200 toll Free : 1.800.872.3877 Fax : 1.608.205.9210

NAFA ANNOUNCES 2015AUCTION SCHEDULE

Press release

SALE DATES

January 27 to february 2, 2015 (On show January 22)

March 28 to april 3, 2015 (On show March 23)

June 28 to July 3, 2015 (On Show June 23)

September 1 to 3, 2015 (On Show August 29)