1.) Katie Puckrik Smells — at Beauty and the Dirt!:
Check out Katie’s new column at Beauty and the Dirt. It’s as savvy and entertaining as her video fragrance reviews on YouTube. From the comments to her Le Labo Labdanum 18 review: “And the question I always have is: who stumbled upon petrified whale hurl on the beach and decided it was the missing link to fine perfumery?”
Oh Katie, the horrific realities at the basis of fine perfumery sometimes keep me awake all night long, too. Hyraceum, for example. I mean . . . really?
Avery Gilbert, author of ‘What the Nose Knows‘ gave Katie a box of glowing props on his blog ‘First Nerve‘: “So who is Katie Puckrik? In one sense it doesn’t matter: as a perfume review populist I believe anyone with a flair for smell and the ability to talk about it can play. No need to kowtow before noseurs like Luca Turin and Chandler Burr. Katie Puckrik describes herself as ‘a fragrance thrillseeker whose love of perfume borders on the unseemly.’ Sounds like a player to me.”
Speaking of Chandler Burr, the NYTimes fragrance critic pans the new Kenneth Cole Black with a one-star review, and calls the entire Kenneth Cole fragrance line “one of the worst collections of scent on the market.” Ouch! I think I’d rather wear petrified whale hurl.
2.) Luxury Spending Still Lags:
“Spending on high quality products like watches and fine wines has yet to pick up much and could remain depressed until at least September . . . Richemont, the world’s third largest luxury group in terms of market value behind LVMH and Hermes, said sales had tumbled 26 percent in April (with profit dropping 31%) after adjusting for exchange rate changes, and warned trading would remain tough.”
The article goes on to mention that Bulgari posted its first quarterly loss in ten years; LVMH wines & spirits sales are flat; and luxury group PPR (owner of Gucci Group) stated that it’s continuing its focus on cost cutting measures, including shop closures.
The one bright spot? Tod’s, the Italian shoe and handbag makers, said “orders for its winter collections were “good” in spite of the grim markets. It posted a 4.9 percent rise in first-quarter sales at constant exchange rates.”
In related news, Marc Jacobs spills the beans on what makes LVMH CEO Bernard Arnault happy: “”I only work to please one person, and that’s Mr. Arnault. He gave me the job, he wanted me there and he believed I could do it. When he’s pleased, I’m pleased and the only way he’s pleased is when we sell a lot of product.”
Meanwhile, let’s take a look back at what Mr. Arnault was predicting for LVMH for 2008: “‘The customers we serve are much less affected by these movements in the economy. They have a relatively high level of purchasing power and live in countries where growth will remain strong even if there’s a small or medium-sized recession in the United States,’ he said. ‘There are a certain number of reasons, despite an environment which is disturbed on the financial front…for us to be very confident about 2008,’ he added.”
A cut and dried example of why you should never take a CEO’s word at face value. It’s his/her job to put the best spin on things and present a good picture for shareholders and investors. So when you hear CEO’s that are now talking about “flat” earnings, cost cutting and/or slow growth, you know we’re in trouble.
3.) Current Economy is Hard on Watch/Timepiece Retailers:
“‘In the past, many jewelers did not want to bother selling watches under $400 or $500, but that has completely reversed,’ says American Watch Guild Executive Director Bert Kalisher. ‘Now, stores that never carried watches priced $100 to $400 are starting to stock them, and they find it’s working. Consumers are buying at those price points, and watch companies are paying attention to this. They have to.’”
The article mentions that while Swatch Group (which owns Blancpain, Breguet, Longines, Omega, Tissot and more) saw an increase in sales in its China and Middle East markets, this was offset by a steep slump in its Europe and Americas Markets. For the Richemont Group (Cartier, IWC, Jaeger-LeCoultre, Montblanc, Panerai, Piaget, Vacheron Constantin and Van Cleef & Arpels), sales in “Europe and Asia were up 15 percent and 19 percent respectively, while in the Americas and Japan they fell by 2 percent and 7 percent, respectively.”
4.) India Investment Group Keeps Hilfiger, but Dumps Gucci:
“The Murjani Group, which runs stores of fashion brands such as Tommy Hilfiger and Calvin Klein, and luxury brands such as Gucci and Jimmy Choo, was recently in the news for plans to sell off the latter . . . ‘We are doing it (selling off Gucci). We have decided to shift the focus to our premium brands (Tommy Hilfiger, Calvin Klein), which have been performing at exceptionally high levels. The luxury market will take three-five years before it turns commercially viable whereas the premium market is well-established in the country . . . We will continue to focus on the premium category and not on luxury.’”
Luxury groups (such as Armani, LVMH and PPR) rushed into India during the big economic boom, just so they could have a foothold in what they considered a soon to explode consumer market with a cultural taste for opulence. Journalists wrote of high-end designer boutiques that faced mud streets with no sidewalks, but it was all about being there first and snagging what could turn out to be the best location for when the Indian economy seriously juiced up. In March of 2008, the Times UK wrote: “Reaching consumers is tricky in India . . . hurdles include third world-standard infrastructure, a painfully complex regulatory system, and authorities who are more concerned about cracking down on the booming trade in fake pharmaceuticals than catching the bootleggers o
f Gucci handbags.”
A video clip below of the Gucci Fall/Winter 2009/2010 show — the kind of product that Indian retail groups are passing over for more affordable lines like Tommy Hilfiger and Calvin Klein:
Speaking of Gucci and ditching things, Bottega Veneta (which is part of the Gucci Group’s brand lineup) has scrapped plans for a 1,700 square foot stand-alone boutique in a brand new Bellevue, Washington development just outside of Seattle. They’re partnering with Neiman Marcus instead: “‘We have evaluated the business and decided that we would prefer to test the market, which is new to us, with our long-term partner, Neiman Marcus,’ (Bottega Veneta spokeswoman Lisa Pomerantz) said in an e-mail.”
5.) Are Luxury Brands Going to Have to Kiss & Make Up with eBay?:
“The European Commission, the 27-nation EU’s antitrust regulator, is drafting new guidelines on the extent to which companies can restrict trade through their authorized dealers . . . eBay, owner of the most visited U.S. e-commerce site, would benefit from the rule-change as authorized dealers would be able to sell more luxury goods on the company’s network.”
The EU commission states that they believe the tighter restrictions that luxury brands place on Internet sales over physical “brick and mortar” stores is unfair to both authorized resellers and consumers. For example, those notices posted at the Saks Fifth Avenue website under a Prada handbag: “Due to high demand, a customer may order no more than three units of this item every thirty days.”
Have you ever heard of a sales person at a physical Saks location restricting how much merchandise a customer can purchase? Yeah, me neither.
6.) Lagerfeld’s Tweet of the Week:
Do the French really say that, or did he just make it up?
7.) JC Penney Takes a Hit — Profit Drops 79%:
“J.C. Penney Co. reported a 79 percent decline in first-quarter profit and lowered its forecast for the second quarter and the full year . . . ‘Looking to the balance of the year, we expect consumer spending and mall traffic to remain weak, which will be particularly evident against tough comparisons in the second quarter,’ said Myron ‘Mike’ Ullman, Penney’s chairman and chief executive officer.”
Abercrombie reported a difficult first quarter, as well, with net profits dropping 24%. Nike also finds itself in the hot seat, announcing that it will cut 1,750 jobs or about 5% of its entire global workforce.
Cut that global workforce, Nike — just do it!
Adidas also announces workforce cuts after first quarter net income falls 97% : “Adidas AG, the world’s second-largest sporting-goods maker, plunged in Frankfurt trading after saying half a year’s profit will be wiped out as demand slumps worldwide and the company revamps the Reebok brand . . . Chief Executive Officer Herbert Hainer said he’ll cut more than 1,000 jobs and close regional offices as part of a plan to save 100 million euros.”
8.) The Buyout Rumor That Was More Than a Rumor All Along:
You know how LVMH has been denying rumors that it’s in negotiations to sell its Moët Hennessy holdings to global wine & spirits giant Diageo? Well, again, don’t trust everything a CEO says: “The Daily Telegraph revealed yesterday that bankers had been working on plans for a deal for some weeks. LVMH, 47% of which is owned by Bernard Arnault, France’s richest man, issued a statement denying it was ‘in discussions to divest Moët Hennessy.’ However, sources close to the company confirmed that the statement did not refer to The Daily Telegraph’s story yesterday, but rather to subsequent reports that claimed the talks between the parties had already started. LVMH refused to rule-out interest in having discussions with Diageo.”
The sale of Moët Hennessy makes no sense unless LVMH is in the mood to cut costs and clear the decks in order to focus exclusively on fashion. As part of that new mood, it was announced that LVMH would purchase a stake in U2 lead singer Bono’s Edun clothing brand.
I love that the Edun article goes on to note that Bono’s real name is Paul Hewson. I didn’t know that. And it strikes me as kind of funny in how much it normalizes him: Bono + Paul Hewson = all the air sucked out of a rock star’s personae.
And since we’re on the topic of Moet Hennesey: By Killian Launches a New Fragrance Series — “Kilian Hennessy, scion of the cognac family, which is part of luxury giant LVMH … was inspired by his Middle Eastern customers for his second line of By Kilian, Arabian Nights. ‘They like scents that are more animalistic and Oriental, scents closer to their culture,’ he said. The Paris-based perfumer said he only approved the formulas of Arabian Nights when they smelled correctly to people he knew from the Middle East.”
What is it with thin white Frenchmen and their insistence on butchering oud for the Western market? Wasn’t Le Labo Oud 27 punishment enough? To add insult to the misery, By Killian’s oud series will run about $395.00 a bottle — an increase of $170.00 per bottle over his original Black series.
In other fragran
ce news, Marc Jacobs recently announced the upcoming release of a new perfume, as well. It will be called Lola, and instead of “artificial bananas and wine-cooler strawberry” (Daisy), it will undoubtedly smell like a creamy, fruity tropical drink . . . oh wait, I’m sorry, the PR copy says it will be “more sensual” and “vampy”, then goes on to list pear, grapefruit and vanilla notes. Wow. What would we ever do without such cutting-edge creativity in the world?
The alleged inspiration for Jacobs’ new fragrance:
“Her name was Lola, she was a showgirl . . . “
Oh c’mon, you just KNOW I’m right! Or, at least, you wish I were right . . . the marketing blitz would be cheese on a stick (i.e. heaven!).
