Chanel acquires tannery provider to secure luxury bag supplies; photo Djamila Celina Melcherts by Bonno van der Putten

Chanel acquires tannery provider to secure luxury bag supplies; photo Djamila Celina Melcherts Chanel has acquired its long-time lamb hide provider, the French tannery Bodin-Joyeux, in the latest purchase by a luxury brand of a partner that supplies top quality materials. Chanel, which belongs to the Wertheimer family, is the 2nd biggest luxury brand in the world, behind Louis Vuitton and ahead of Ralph Lauren, with nearly € 6 billion in estimated annual sales. Like rival Hermes, Chanel has been buying up partners to guarantee long-term supplies and control quality, from plant growers for its Chanel No.5 perfume to embroiderers such as Lesage for its couture collections. The trend toward vertical integration - control from the raw material to the shop shelf - gives luxury brands a competitive advantage, raises barriers to entry and helps them defend the high-quality image they want associated with their products. Bodin-Joyeux is the first tannery Chanel acquired, employing 100 people in central France. It is one of Chanel main suppliers of supple lamb leather, known for its silky feel and used to make the brand's popular 1,500-euro quilt leather bags. Chanel still relies on about 15 different tanneries and noted that the average price of high quality lamb leather was rising as people were eating less meat and demand kept growingand production is not growing. Prices of lamb skin had risen by about 25-30 percent in the past 3 to 5 years, about the same order as for calf leather. Chanel, which started buying up partners in the late 1980s, today owns several niche fashion suppliers including Lesage, the feather specialist Lemarie, the hat maker Maison Michel and the glove-maker Causse. Last year, it acquired the Scottish cashmere company Barrie Knitwear. Gucci-owner Kering, Hermes and LVMH have also been buying up tanneries in an effort better to control their supply chain. Recently, Hermes and LVMH even bought crocodile farms. Learn more: Bonno van der Putten Monarch Capital Partners