1.) Global Fashion Powerhouse Escada Throws in the Designer Towel:
“Escada AG, the German luxury clothing maker whose dresses are worn by Demi Moore and socialite Paris Hilton, filed for bankruptcy protection after failing to win bondholders’ backing for its refinancing . . . More than 2,200 workers are affected by the collapse of what was once the world’s largest maker of women’s fashion. Founded in 1976 by a Munich couple, Escada makes dresses that can cost more than 10,000 euros ($14,000). The company also produces accessories including snakeskin handbags, eyewear and fragrances. It makes most of its revenue outside Germany, and is popular with affluent female consumers in the U.S. and Russia.”
Escada just hosted a huge Pink Party in July during Berlin’s Fashion Week to celebrate its thirty three years of history in the fashion and design business, but it’s now apparent that it was more a wake than a party. Video clip below (in German) of the festivities:
It’s like watching people dance aboard the Titanic.
Escada had acquired the St. John and Badgley Mischka lines, branched out into children’s clothing and accessories, as well as offering its own line of beauty products and fragrances. One analyst believes that Escada lost its original vision and tried to expand in too many directions, while also hurting itself by dragging its feet on establishing an online presence: “On the PR side, I view Escada as distorting its original story and message by hiring designers like Todd Oldham, as well as leaving its production roots in Germany to relocate to France . . . If your retail is tanking, you can do celebrity endorsement deals, fashion shows and advertisements till you’re blue in the face, but if people can’t go online and buy your clothing, no matter how “couture” you claim to be, then what business do you have for this decade?”
According to the Wall Street Journal, the company is still saying that they’re going to try to restructure and turn everything around. Video clip below of a behind the scenes look at Escada’s Fall/Winter 2009/2010 advertising campaign:
But it isn’t just Escada (and LeCroix). There’s a succession of grim news on the retail and economic fronts, and while I don’t want to be a complete and utter Debbie Downer about it, I think you should brace yourselves:
A.) Strip Mall Vacancy Rate Hits 10%, Highest Since 1992: “‘Right now it looks like all signs are pointing to rents and vacancies, big components of income, getting shot down,’ [Victor Calanog, director of research for Reis] Inc said. ‘Until we see stabilization and recovery take root in both consumer spending and business spending and hiring, we do not foresee a recovery in the retail sector until late 2012 at the earliest.’”
B.) Foreclosures rise 7 percent in July from June: “The number of U.S. households on the verge of losing their homes rose 7 percent from June to July, as the escalating foreclosure crisis continued to outpace government efforts to limit the damage . . . Foreclosure filings were up 32 percent from the same month last year, RealtyTrac Inc. said Thursday … Banks repossessed more than 87,000 homes in July, up from about 79,000 homes a month earlier.”
The continuing downward spiral in the real estate market (both private and commercial) can’t help but eat away at the retail scene as it reflects a wider distress in the system — lack of available credit, rising unemployment, a drop in consumer confidence. Any retailer who’s looking at these numbers and not connecting the dots to Escada filing for bankruptcy is whistling past his/her own grave.
C.) First-Quarter Clothing Exports to Russia Decline: “German clothing exports to Russia fell 6 percent in the first quarter … Italian exports to Russia dropped 20 percent while those from France plunged 23 percent . . . A third of Russia’s 42,000 clothing retailers will close by the end of this year … Casualties of Russia’s economic decline have included outlets of Diesel and Stella McCartney. Gross domestic product in Russia shrank 9.8 percent in the first quarter, the worst contraction in 15 years.”
And it was only last year that major fashion houses were designing entire collections with the Russians in mind, with previously frowned on furs making a comeback on the runways as a direct response to the cold Russian climate. Remember Gucci’s Fall 2008 collection, with its mix of Eastern European (aka Russian) peasant flourishes and gilded Czarist appeal?
D.) Bleak sales are another reality check for economy: “A bleak report on retail sales Thursday reinforced a nagging worry of economists: Shoppers won’t spend enough to help a recovery take hold . . . Even Wal-Mart, which had managed to post robust sales during the recession, reported an unexpected drop in quarterly earnings. The company faulted lower prices for groceries and other products. But it warned that the economy is also still forcing customers to scale back their purchases.”
Plus more: 3 big retail chains’ earnings reflect a hard slog: “Discount giant Wal-Mart Stores Inc. said its second-quarter profit beat expectations but also reported that sales fell; trendy clothing company American Apparel Inc. said earnings plummeted 34% compared with a year earlier; and upscale department-store chain Nordstrom Inc. reported that its profit declined 27% but raised its full-year forecast.” i>
And more: Retail stocks drop as J.C. Penney’s forecast comes up shy: “Retail stocks headed lower Friday after J.C. Penney Co.’s profit forecast fell short of Wall Street expectations.” Urban Outfitters isn’t doing too well, either, reporting a 14% drop in profit and sales declines across all its subsidiaries.
E.) High-End Kids Clothes Languish: “Pricier brands have been hit hardest, as parents trade down to cheaper threads and buy only for “special occasions,” says Jamie Ross, a creative director at retail research firm Doneger Group . . . Designers embraced kids’ lines, in part, after exhausting traditional expansions into footwear and perfumes, says Florence Rolando of Kidding Consulting . . . U.S. childrenswear sales grew about 20%, adjusted for inflation, between 2002 and 2006, according to research group Mintel International, hitting a high of $49 billion in 2006. But sales have slowed in the downturn, ticking down to an estimated $45 billion last year.”
Okay, that’s enough of THAT. Even I’m getting depressed just typing all this stuff in. How about we change the subject to something peppy, like lawsuits? Yeah!
2.) Stella McCartney Gets Sued Over Nude:
“Fashion designer Stella McCartney is being sued by a cosmetics company linked to the wife of U2 frontman Bono . . . Stella is due to release her new fragrance Stella Nude imminently – but Nude Skincare, run by eco-entrepreneur Bryan Meehan and Bono’s wife Ali Hewson … are believed to be unhappy about her decision to use “nude” in the title of her fragrance. The case is due to be heard at London’s High Court in the autumn.”
The last fragrance released by Stella McCartney was Stella Sheer (awarded 0 stars by NYTimes fragrance critic Chandler Burr), so a Stella Nude as a follow-up sounds like a great idea on its surface, but there are always those pesky trademark issues.
The Nude Skincare brand doesn’t offer any fragrances at present, and maybe this is why the Stella brand chose to go ahead with the name, believing that they weren’t stepping on anyone’s toes — and I have to say, there’s a serious doubt in my mind that any consumer would reasonably confuse Stella Nude for anything offered by Nude Skincare, but I think the real problem is that the Nude Skincare brand is afraid that if they were to let the Stella brand go ahead with using Nude as its title, then they would forfeit any and all future ability to prevent other companies from jumping on the Nude bandwagon when the concept of “Nude” is the very core of Nude Skincare.
I wouldn’t be placing any bets on the McCartney brand walking out of this victorious.
And as long as we’re on the subject of fragrances, I ran across a PR release about the upcoming Issey Miyake fragrance release, A Scent. The bottle is amazing, like a slice of thick glass, and I can’t wait to get my hands on it just for its brilliant design (the scent itself holds no interest for me).
Arik Levy is the bottle designer, known for his striking design work with interior furnishings: “Such is the powerful, avant-garde concept explored by bottle designer Arik Levy, whose unassuming design ‘does not hide behind plays of color or texture and instead deploys its infinite naked beauty’. Levy’s innovative design suggests that the bottles are sliced, depending on the desired size, from a single, continuous block of light-filled glass – a remarkable piece of glasswork that tests the boundaries of transparency.”
Video clip below with designer Arik Levy:
Marie-Helene Wagner has several ‘A Scent’ related video clips posted at her site, one of which features Mr. Levy talking about his design for the Issey Miyake bottle: Video Interviews with Perfumer Daphne Bugey & Designer Arik Levy
3.) Nordstrom Adapts to Trends by Jumping on the Twilight Wagon:
“Based on the best-selling book series “Twilight,” which is set in the Olympic Peninsula town of Forks, Nordstrom Inc. said it will begin selling apparel and jewelry inspired by the Stephenie Meyers novels . . . ‘The line allows customers to show their love for the film by creating a whole look with pieces from the collection or combining with other merchandise to create a unique look of their own,’ said Loretta Soffe, Nordstrom executive vice president and general merchandise manager for women’s apparel, in a statement.”
Now, I know that a clothing line based on the Twilight books is enough to make certain heads spin, but you have to hand it to Nordstrom for jumping on a demographic and milking it for precious cash, especially considering their overall sales for the 2nd Quarter of 2009 were over 6% lower than last year. The first Twilight movie was a commercial success and sequels are already in the works, so Nordstrom is likely to see this as a bankable move that can pretty much fuel itself for the next few years.
After a disappointing quarter where earnings plunged 90 percent, Macy’s is also jumping on its own demographic — women who need size 11 shoes: “Macy’s Chicago-area stores are stocking greater quantities of women’s shoes in size 11 due to huge demand . . . ‘We’re are showing (size 11) shoes on the sales floor and making it easier for sales associates to help customers (with them),’ Chief Financial Officer Karen Hoguet said. ‘In some cases, we’re seeing double-digit pairs of shoes bought when women can find their size.’”
4.) Miuccia Prada Admits the Recession Has Influenced Her Designs:
“‘Sometimes you do too much fashion and forget the basics,’ she says. ‘When you say ‘commercial,’ it shouldn’t be an insult, like something is not beautiful,’ she continues. ‘It has to be best in the sense that
[it's] really what people want to wear to look beautiful and elegant [in]. I wouldn’t have been thinking of all this stuff if there was not a crisis. The crisis obliges [us] to really focus also on what really makes sense.’”
This mirrors a point I was making when I commented on a review for the new series of Mark Buxton fragrances. The reviewer panned the Buxton fragrances as disappointingly commercial, comparing them unfavorably to Christopher Laudamiel’s wild, edgy, decidedly non-commercial creations for Humiecki & Graef, but then fessed up to never wanting to own any of the Humiecki & Graef scents despite being wowed by them.
Designers are finding themselves in the position of having to evaluate their past tendencies to indulge in critic-friendly experimental excess in the light of presently plummeting sales figures and shrinking access to both credit and cash (Prada reported a 22% drop in earnings for 2008). Miuccia Prada’s comments appear to show a recognition that eliciting a gasp of wonder from fashion critics is great for the ego, but doesn’t pay the bills. Yes, critics matter (“I don’t believe that anyone is not bothered by critics. I think that everybody cares,” she says … “(but) There is a difference between caring and really being changed by it, okay?”), but the ability to create beautiful yet also wearable items is another challenge altogether. The consumer audience is less eager than the critics to be thrilled by wild experimentalism.
Miuccia Prada’s Spring/Summer 2010 menswear collection below — gone are the whacked-out days of sticking her male models in tutus and claiming it’s revenge for the uncomfortable clothes that men expect women to wear. Now she has to actually, you know, sell stuff:
Though I’d still have to have surgery on my thighs to fit into those trousers.
5.) Target and Amazon Part Retail Ways:
“Amazon.com, arguably one of the most successful e-commerce infrastructures for retail sales, will no longer manage Target’s website technology. Since their partnership started in 2001, Target has used Amazon’s order fulfillment technology with much success, but Target now may be strong enough to manage its own multi-channel network . . . Target looks to end the partnership in hopes that their sole management will lead strategic management and customization of their site.”
Target has until just before the 2011 holiday season to get its own web infrastructure up and running, and I’m sure they’re looking forward to the freedom of running their own show. For its part, Amazon will undoubtedly miss whatever fees and charges they’ve been pulling in from Target, though Amazon did recently snag Zappos, which shows that they’re actively looking for replacement revenue generators.
Though I had noticed that Zappos was getting low on the inventory lately. Maybe they needed Amazon more than Amazon needed them . . . ?
