French luxury goods designer label Hermés has announced earlier this week that they are breeding their own crocodiles in order to meet demand for their popular and astronomically pricey leather bags.

There is a waiting list of several years for some of the label's exotic-skin bags and so executives have decided to establish their own farms, mainly in Australia, to create a bigger supply. The exotic crocodile leather that is used to fashion the purses is very delicate to farm. Apparently it can take three or four crocodiles to get enough skin for one bag - which costs as much as $50,000 USD - and breeding can often be expensive as the large reptiles need to be kept apart in separate rooms on the farm to maximally prevent skin damaging when they bite one another. However, even so allowances have to be made for natural losses that can amount to around a third of bred crocodiles.

According to Patrick Thomas, chief executive officer of the luxury line, "We are now breeding our own crocodiles on our own farms in Australia. The world is not full of crocodiles, except the stock exchange. Hermes already faces a major challenge producing 3,000 crocodile bags a year."

Hermés' leather items, which account for 40 per cent of their luxury goods business, have been the most in demand in the current state of economic crisis and recession, with the group hiring about 50 to 100 leather workers just in 2009 to add to the nearly 2,000 craftsmen it already employs at French sites. The CEO admits that the group has been concentrating more on other areas of the business, such as fashion and textiles, so it is not so dependable on leather bags, but says this area still continues to be its fastest-growing product line. "We cannot face demand. We have massive over-demand. We are limited by our ability to train new craftsmen," Thomas added.

It is exactly this obsessive demand, in combination with an intentionally limited supply, that made it possible for the label to prosper in times of financial downturn, that has decimated its competition. While many of its competitors are experiencing hard times under the strain of the global recession, Hermés, an iconic brand that has always been famous for its silk scarves and handbags, had a remarkably profitable first quarter. As some luxury brands like Gianni Versace, for example, closed some of their boutiques, Hermés is planning to open several new stores this year.

The Hermés crocodile-skin bags have become a cultural touchstone. The Birkin bag was featured in an episode of the HBO series "Sex and the City," and the Kelly bag was used as a plot device in the 2003 film "Le Divorce." Hermés' pocketbooks are favored by Eva Longoria, Katie Holmes and former Spice Girls singer Victoria Beckham, who is regularly seen with different versions of the Kelly style and is believed to own a collection of over 100 of the purses valued at some $2 million.

Tags: Fashion

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