1.) Luxury Goods Lose Their Recession-Proof Luster:
"A freefall in luxury spending late last year among the rich led to unprecedented discounting on even premium brands like Chanel and Prada. And while sales of high-priced items have stabilized in recent months, business is still weak and is faring even worse than overall U.S. apparel sales . . . Shoppers will see more merchandise focusing on the low- to mid-tier luxury prices. That means more dresses from $400 to $600, and fewer priced over $1,000. The average prices for European luxury handbags are now anywhere from $1,600 to $1,700, lower than the $2,000 average seen more than a year ago . . . "
Hmmmm, perhaps some of that dropoff in spending among the rich has something to do with this: Survey Finds Wealthy Less Keen on Luxe Category -- "According to a recent survey by the Luxury Institute, 48 percent said luxury products are too accessible and are no longer exclusive; 40 percent believed luxury brands are becoming a commodity, and 52 percent said luxury brands that also sell products for mass consumers are no longer luxury brands."
So in the aquisitions and expansions frenzy that luxury brands and conglomerates (LVMH, Richemont, PPR) engaged in for the past ten to fifteen years, they didn't appear to consider that what wealthy consumers once considered attractive about brands such as Louis Vuitton, Gucci and Chloe was their small size, which allowed for a cohesive vision and focused craftsmanship but also made for limited distribution and a subsequent difficulty for just anyone to find and purchase.
But now that the luxury conglomerates have planted flagships into just about every country on Earth, a canvas Louis Vuitton bag, striped Gucci kicks or Chloe branded accessories are about as difficult to find as a pair of jeans at the Gap. Adding insult to injury are the deep discounts that the once "We're Too Good For You" luxury brands are offering on a seasonal basis -- I mean, once you see Armani dresses and Alexander McQueen handbags at 50% to 70% off, it becomes a willing suspension of disbelief to continue perceiving the brands as anything but over-priced, over-hyped mass merchandise.
Even the Japanese, once the most voracious consumers of luxury brands and the engine that drove the global expansion of nearly the entire luxury industry (but especially for Louis Vuitton), have turned sour on the over-exposed and ubiquitous parade of once highly coveted designer names: Once Slave to Luxury, Japan Catches Thrift Bug -- "A new generation of Japanese fashionistas does not even aspire to luxury brands; they are happy to mix and match treasures found in a flurry of secondhand clothing stores that have sprung up across Japan. 'I'm not drawn to Louis Vuitton at all,' said Izumi Hiranuma, 19. 'People used to feel they needed a Louis Vuitton to fit in,' she said. 'But younger girls don't think like that anymore.'"
Bernard Arnault is likey weeping into his coffee as he reads those words, and Hermes, which has always done well in Japan, is offering up tepid remarks over the prospect of improving sales over the next year or two: Hermes CEO Sees No Light in 'Tunnel' on Japan Slump -- "'I'm not expecting to see the light of the tunnel before 2010,' Thomas said in a telephone interview yesterday from Milan, where he reopened a flagship store for the Paris-based company. The global financial crisis has a 'good year to go, maybe more,' and he was 'not optimistic at all' about the world economy, he added. 'The Japanese economy is not good and we all feel it.'"
When Hermes bleeds, the luxury industry listens.
Addressing the issue of dissatisfaction with the contemporary luxury brands is this quote from Dr. Michel Phan, director of MasterCard-ESSEC Luxury Brand Management Executive Program and LVMH chaired professor at the ESSEC Business School in Paris: "'Today, without the logo, you can't tell what brand it is. They all look the same,' he said." Dr. Phan argues that luxury brands need to offer personalized goods and work diligently at not copying successful items from competing brands -- that the "me, too" approach of brands dog piling onto trends has hurt the luxury industry as a whole.
And Dr. Phan has a point -- I walk through a handbag section at a department store like Nordstrom or Neiman Marcus and it's mostly impossible to tell one brand from the other unless they're splattered with logos. There's no singular vision to a brand any longer -- it's like what Octavian Coifan writes of the frangrance industry at his blog 1000 Frangrances: "On the shelves, modern perfumes are very close in design and color schemes and very few would attract you in the ocean of products . . . They are abstract entities that (have) lost power and magic and worse, the product itself is not able to fill the gap."
Speaking of luxury design houses that go mass market at their own risk:
2.) Narciso Rodriguez Will Be Slumming It On eBay:
"Smack dab in the middle of Fashion Week, the cheap-chic sector has come out with a curveball. Narciso Rodriguez, couturier to Michelle Obama, Sarah Jessica Parker and Rachel Weisz, is producing a line of clothing that will top out at $350 (his pieces usually run $1,000 and up). His partner in this scheme? eBay . . . in the search for that elusive, last-season, sold-out item, (eBay) can be a handy tool, but the clothing segment of the site spans an enormous range of products, from secondhand sweatpants to pristine couture gowns. There is also -- and this has long been the sticking point in the relationship between fashion and eBay -- an inundation of fakes. It's the Canal Street of cyberspace. Rodriguez is wading into seriously untested, wild waters."
Wading into seriously untested waters, sure, and also seriously in danger of losing any and all current customers who won't be keen on sporting the same types of designs that are to be manufactured out of cheaper grade materials and hawked on the Internet site that's most famous for hosting ripoffs of famous brands.
Below is a video clip of Narciso Rodriguez's Spring/Summer 2010 collection that he just recently showed in New York:
"Romantic and poetic without losing its hardcore streetness"
Rodriguez had a recent fallout with the Liz Claiborne Group after they purchased a 50% stake in his brand and likely wanted to slap his name on a line of handbags, sunglasses and other accessories: "The partnership marked Liz's entry into the luxury designer segment, and Liz, whose brands include Juicy Couture and Kate Spade, was hoping to license the Narciso Rodriguez brand and extend it into accessories."
The partnership ended in October of 2008 when he purchased back the rights to his name, but it's not even a year later and Mr. Artistic Integrity is already in the process of peddling a low-rent version of his designs on eBay. Anything the Claiborne company offered couldn't have been any worse than this.
Though Claiborne is having problems of its own: Liz Claiborne working with turnaround firm -- "The company said Thursday that it has hired the turnaround firm on a short-term basis to review its operations with the goal of improving its cash flow in the U.S. and Europe . . . But sales of its key brands have suffered as consumers cut their discretionary spending, and the company expects its sales to continue falling."
Speaking of low-rent knockoffs: H&M Sales Drop Worsens in August -- "Revenue at stores open at least a year fell 11 percent last month, the fourth consecutive drop and worse than July's 3 percent decrease, Stockholm-based H&M said today . . . H&M said sales in Spain, the U.S. and France were "weak" in the third quarter because it had too little inventory to keep pace with discounting by competitors."
It's a race to the bottom of the discount barrel -- last one there is fresh out of business!
And yet the parade marches on:
3.) London's 25th Anniversary Fashion Week Kicks Off with Christopher Kane:
"Kane's latest collection ... suggests 2010 could be the year he hits the big time. The Kane look - hip, art-school style spliced with serious sex appeal - now looks sufficiently polished to charm a heavy-hitting front row which included Anna Wintour, Sir Philip Green, designer Donatella Versace and supermodel Natalia Vodianova . . . He namechecked the 1970s American sitcom The Brady Bunch, the novel Lolita, cult religion and 'Nancy Reagan on the lawn of the White House' as references for a collection he cheerfully tagged as 'a bit pervy'."
New kid on the London block Kane's "pervy" Spring 2010 collection below:
"Looser and with more leg"
And old London standby Burberry closed the party down:
"A classic collection in front of an A-list crowd"
Burberry is the very model of the over-exposed modern luxury brand. They manufacture several women's and men's clothing lines across the pricing spectrum, including handbags, shoes, jewelry, sunglasses, hats, umbrellas, wallets, keychains, you name it. If there's something to sell, then Burberry has it on a shelf, with at least one in its signature plaid check.
They were also one of the most recognized names featured in the massive and demoralizing luxury goods sales that kicked off throughout high-end department stores last fall: "In May, Angela Ahrendts, chief executive officer at fashion house Burberry, admitted 2008 to 2009 was one of the "most challenging years" the luxury sector has ever faced."
But enough of business, what's a London fashion week without at least one minor scandal? Up and coming designer Mark Fast made last minute additions of several larger, curvier models in his catwalk lineup, causing several of his staff to quit before the show: "The daring move, which placed ladies with US sizes 8-10 on the catwalk, led to a near meltdown among the young designer's staff. Both his stylist and creative director walked out just three days before Saturday's show at Westminster."
The Mark Fast collection is below, with one of the curvier models as the first one down the runway:
Said one staff member: "The decision to use fuller girls is something we have been talking about. There's an idea that only thin and slender women are able to wear Mark's dresses and he wanted to combat that. We wanted women to know they didn't have to be a size zero to wear a Mark Fast dress -- curvier women can look even better in them."
And when you're a young designer who's not yet established, it's a savvy move to pitch your brand's image directly to your target market (via a runway clip on YouTube, of course) instead of waiting for a potentially failing fashion magazine to do it for you.
4.) Are New Allergen Rules Destroying Classic Perfumery?:
"Perfume makers, sniffers and vendors are upset over the International Fragrance Association's (IFRA) latest rules governing what can go into a scent's formula. With the association aggressively seeking to reduce or eliminate allergens, some insiders say Chanel's iconic No 5 perfume may be in danger . . . 'There seems to be a steady build-up of regulatory rules,' said Luca Turin, a scientist and perfume expert at the Massachusetts Institute of Technology. 'All the legacy fragrances, these works of art, are being steadily destroyed,' Turin said. 'You aren't obliged to put airbags on a vintage car. Why do you with perfumes?'"
I can appreciate the point that Turin's trying to make, but a vintage car isn't the best example to use -- a vintage car doesn't get used up and then replaced with a quick trip to the local department store fifty years later. The formulae for vintage fragrances may have been crafted before the new allergen regulations, but the fragrances themselves are in continuous production.
Perfumer Isabelle Doyen expresses the frustration that perfumers feel when informed of yet more allergen restrictions on perfumery ingredients: "'Even water, if you investigated enough, would become something dangerous,' said Isabelle Doyen, head perfumer of the French fragrance house Annick Goutal. 'What's terrible is that you put in place the formula and within one or two years you have to rework it.'"
A fragrance often takes two to three years (if not more) of testing and tweaking to become market ready. Finding out only two years after release that you have to go back to the drawing board would be slightly headache inducing (to say the least).
5.) Industry Quick Hits:
A.) Successful GWM Seeks International SugarDaddy for Next Big Step: "Tom Ford International, the luxury line from the former creative head of Gucci, is seeking funding to expand into women's apparel . . . Citing unnamed sources, peHUB reported that the design house, based in New York, was looking for an investment of $50 million or more. Representatives for Tom Ford and Credit Suisse could not be reached for comment."
Is Ford genuinely looking to expand into womenswear just as the entire luxury market is braced for a massive collision with the brick wall of reality? Though, to be fair, wealthy clients are tired of the already over-exposed brands that presently underwhelm them, and Ford's name isn't emblazoned on a one of them . . . yet. Should the likes of Valentino, Versace and Gucci get kicked to the curb, that could leave plenty of room at the table for a hungry, and experienced, entrepreneur like Ford.
Bonus points: his line of Private Collection fragrances smartly positioned his brand name in the up-market section, where it doesn't sully its good taste and breeding among the less exclusive likes of a bottle of Marc Jacobs or Hugo Boss.
A video clip below of a conversation between Tom Ford and International Herald Tribune fashion critic Suzy Menkes:
B.) Now that everyone's sick and tired of our old stuff: "Editors aren't the only ones watching the studied evolution of Rodarte designers Kate and Laura Mulleavy. LVMH North America chairman Renauld Dutreil was given a prime front-row seat at the Mulleavy's show on Tuesday, prompting a renewed round of speculation that LVMH may be looking to invest in the company."
In with the new! Handbags and perfume undoubtedly coming soon.
C.) Mothers, Don't Let Your Sons Grow Up To Be Metrosexuals: "Demand among male shoppers for pantyhose has apparently been soaring over the past five years. Selfridges in London has now responded with a range designed exclusively for guysized legs. The tights, dubbed mantyhose ... come in black, beige and charcoal . . . According to those in the know, mantyhose are usually worn under suits to keep the legs warm and to give the hips and thighs a nice smooth line . . . There has been a trend in recent years towards 'metrosexual' dressing, with male handbags dubbed 'manbags', leggings for men known as 'meggings' and eyeliner for men described as ' guyliner' all proving popular."
The photos that accompany the article are just about the crappiest examples of a "soaring" trend I've ever seen. Make it stop!
D.) Google Wins, eBay Loses: French court rules against eBay for counterfeiting while the European Court ruled that Google can continue to sell trademarked brand name keywords for advertising -- "Just a day after Ebay was ordered to pay 80,000 euros ($119,000) in damages to LVMH, an advisor to Europe's top court handed a small victory to Google . . . Google hasn't violated LVMH's trademarks by selling adverts based on key word searches for the luxury goods makers brands, said Luis Miguel Poiares Maduro, advocate general at the European Court of Justice wrote in a statement on Tuesday."
E.) Gucci, diamonds and criminals: Arrest Made in Gucci Store Heist after thieves drove three cars through the store window to get at the merchandise, while an estimated $200,000.00 jewelry store heist in Greenwich, Connecticut leaves owner in shock -- "'Your business gets hit because of the economy and then you get robbed of what you do have,' she said, staring at the broken glass littering the once-pristine store. 'This is just a shock.'"
6.) Milan Fashion Week to Open Under Economic Cloud:
"Milan Fashion Week kicks off Wednesday under an economic cloud as a sharp drop in exports of Italian ready-to-wear women's apparel has put tens of thousands of jobs on the line . . . A study published last week by fashion trade federation Sistema Moda Italia said Italian exports of women's ready-to-wear shrank by 25.3 percent to Russia, 26.8 percent to the United States, 12 percent to Switzerland and 18 percent to Japan in the first five months of 2009."
But hey, "Crisis -- what crisis?", right? Somebody has to fiddle while Rome burns, and it may as well be the fashion designers!
A brief glimpse of the Prada Spring/Summer 2010 collection that made its debut yesterday:
"When things are bad, you have to come out from that. Optimism," Miuccia Prada declared, "is a choice."
Search
Comments