1.) H&M Gears Up for Jimmy Choo As Sales Continue to Slide:
"Fashion retailer Hennes & Mauritz ... posted an 8% drop in September same-store sales, blaming the fall on unseasonably warm weather in most of its markets and a continued slowdown in consumer spending . . . sales from stores open at least a year were down 8% from a year earlier, missing analysts' forecasts of a 7% fall . . . total sales, including stores that opened over the last year, were up 1%, missing expectations of a 4.3% increase . . . the Stockholm-based retailer's comparable sales have declined in 13 of the 14 past months."
Yet there's wild excitement in the air for the upcoming H&M+Jimmy Choo collaboration, which has prodded H&M management to adopt strict sales policies this time around in order to avoid the frenzied crowds of the past that pushed and shoved to grab all the good merchandise they could, only to turn around and hawk it for double to triple the retail prices on eBay once the collections were sold out.
The first 160 shoppers in line will be escorted in groups of 20 to the H&M "VIP" (Jimmy Choo) area and allowed just ten minutes to choose items. Only one item per size per customer will be allowed.
Video clip below of Jimmy Choo founder Tamara Mellon discussing the H&M collaboration -- this will be the first time the Jimmy Choo name has graced the label of clothing items, as Choo has always been a luxury accessories brand:
"What kind of dress would I wear with that shoe?"
Of course, it doesn't hurt when you can rope your celebrity pals into hyping the collection for you:
But while successful for the moment (Karl Lagerfeld's 2004 collection for H&M sold out in hours and bumped H&M's sales figures up 24%) not everyone thinks the celebrity/designer collaborations with lower-end retail chains is a lasting, or even particularly welcome, trend: "Anna Wintour, the editor-in-chief of American Vogue, recently said: 'Every D-level celebrity who thought they could make a quick buck by designing a handbag or whatever is going to disappear. And I think that's a good thing.'"
Margareta van den Bosch, creative director for H&M, admitted in a recent interview that the designer collaborations are only a small part of H&M's overall expenditures, and that they're often loss leaders themselves (i.e. the company doesn't make money on the actual collections) due to the higher costs of producing the collections: "'The Viktor & Rolf wedding dress cost a lot more to produce than we charged for it,' says Van den Bosch, 'but we like the rumours around these collections. They create a sense of excitement about shopping.'"
And by "sense of excitement", she means that these collaborations are designed to bring customers into the stores, which is half the battle when working in retail.
Sidenote: Anna Wintour was recently appointed to the President's Committee on the Arts and Humanities.
2.) The New Low-Priced Luxury:
"But we can begin to see the emergence of new low-priced luxury brands in the remarkable success of J.Crew, which recently doubled the estimates on its third-quarter earnings and projected same store sales growth in the 'high single digits' . . . What allows J.Crew to thrive while other fashion and luxury businesses collapse? A preppy aesthetic of understating one's affluence."
It seems to me as if we're dumbing-down the definition of luxury by the day. Luxury used to refer to artisinal goods produced by hand out of exceptional materials and with superior workmanship. Now the word "luxury" includes J.Crew -- affordable goods mass produced in Asia utilizing low-wage labor and cut-rate materials.
Mass-market, low-wage garments and goods are not "low-priced luxury" by any stretch of the imagination, and it only hurts the genuine luxury goods market as a whole when companies like J. Crew self-label as such.
See how cosmopolitan, stylish and low-priced luxurious we are?
Summary: when everything is luxury, then nothing is luxury.
In related news: Portfolio.com (with WWD) offers a comprehensive analysis regarding the economic crisis and its effects on the luxury industry. It's a fascinating glimpse into the future of high-end retail, and the word I kept reading over and over is "quality", as in "Consumers will demand it and if we want to stay in business, we'll supply it" -- finally, they understand.
Back to Basics: "While a range of opinions emerged, designers, chief executives, analysts, and other observers agreed that, in luxury's next wave, consumer expectations are likely to be higher than ever, with craftsmanship, service, heritage, and longevity among new priorities."
The article quotes a laundry list of luxury executives from the likes of Gucci, Hermes, Fendi, Yves St. Laurent, Coach, Dolce & Gabbana, Chloe, Prada, Valentino and more. One highly relevant soundbite came from the CEO of a marketing agency who talked about a return to customer service: "It's no longer going to be about a power dynamic between shop assistant and customers, but more peer-to-peer selling. I was recently invited to a YSL store event in London, and the chief executive of the company was there helping the customers with the clothes."
The managing director of Longchamp had this to say about an industrywide refocus on quality and craftsmanship over flashy money-making trends: "The customer still wants a sexy, desirable product but is no longer ready to pay $1,500 or $2,000 for a bag that is obviously not worth it."
3.) Billionaire India Family Becomes Major Luxury Industry Player Overnight:
"India's billionaire steelmaking Mittal family ventured into luxury goods as Megha Mittal, the 33-year-old daughter-in-law of steel magnate Lakshmi, agreed to buy Germany's insolvent Escada . . . The Mittal family trust is buying Escada's main business, brand rights, production facilities and distribution network . . . 'It could work,' said Armando Branchini, founder of Intercorporate, a luxury-goods consulting firm in Milan. 'There's growing interest for luxury in India, and the Mittal family has a very strong business background.'"
The Mittal family stated that no jobs would be cut, and that present CEO Bruno Saelzer, former CEO of Hugo Boss, would keep his position. Saelzer was brought in only recently by the company's previous German owners in an attempt to stem the massive losses and help turn the company around.
Lakshmi Mittal, the head of the Mittal family, was ranked eighth on Forbes Magazine's latest list of the wealthiest people in the world, with a fortune valued at over $19 billion. With those kind of resources at hand, and a hefty global business experience to boot, Escada might just live again.
Video clip below that gives some background information on the Mittal family:
"Plunking down milions and millions of dollars on anything they want."
4.) Polo Ralph Lauren Sees Profits Rise Even As Sales Decrease:
"Polo Ralph Lauren Corp. said Tuesday its fiscal second-quarter profit rose and topped Wall Street expectations, helped by increased market share and lower operating expenses . . . Revenue declined ... partly because of a 6 percent decline in retail sales at stores open more than a year . . . In the fiscal third quarter, the company expects revenue to decline in the low single digits."
Squeezing out profits even as sales are falling is some tight sailing on the part of management. A shame about the third quarter, however, though it doesn't seem like many companies are predicting positive results through the rest of 2009.
OTHER RETAIL REPORTS: Abercrombie & Fitch reports a sales decline of 15% in stores open for a year or longer, while Neiman Marcus reported that for the quarter ending October 31st, sales in stores open at least one year declined 13.7%, with overall total revenue falling 11.9%, but in Tokyo, the Fast Retailing Company (which owns Uniglo, a competitor to Swedish fast fashion retailer H&M) reported a sales increase of 35.7%, the largest increase for the company since March of 2001; Target axes 85 marketing positions, which amounts to 8% of its corporate marketing staff.
FRAGRANCE RELATED REPORTS: International Flavors and Fragrances (IFF) posts an 8% drop in revenue for the third quarter, with fragrance sales overall increasing by 3% while sales of Fine Fragrance in particular declined; German flavor & fragrance company Symrise reported a 5% increase in earnings ; L'Oreal reported "a 5.9 percent rise in consumer products but blighted by a 6 percent drop in luxury sales and a 1.4 percent decline in revenues from hair salons"; and Avon reported a 30% drop in third quarter profits, with sales volume sliding 19% in China alone.
In related news (and via POL), Walmart's new displays may unlock cosmetics sales: "Manufacturers of fragrances and pricey cosmetics could ring up sales increases this holiday season as Walmart unlocks display cases to make shopping easier . . . The change comes as more women are choosing to buy cosmetics in lower-priced mass chains instead of department stores and as the key holiday selling season gets underway."
And who would NOT want to know that Roy Orbison's widow is trying to cash in on the man's (severely diminished) fame by commissioning a fragrance in his honor? It's called, of course, Pretty Woman. It sells for $80.00 -- the going price for fame in the Reality TV/American Idol age?
Not to be outdone by some old white lady, there's Power by 50:
"Do you smell that, y'all? It smells like Gangsta!"
Between the dead famous husband exploitation and the Smells Like Gangsta Spirit, the celebrity fragrance trend is really scraping the bottom of the barrel. Maybe it's time to call it quits before all dignity is tossed out the window and we get Weird Al Yankovic, The Cologne.
5.) Little Ms. Seamstress Takes on Chanel Over Claim of Design Piracy:
"Carmen Colle, a former social worker who founded an ethical clothing company to provide employment for refugees, is waging a legal battle against Chanel over a crochet pattern which she claims was copied by designers at Rue Cambon . . . The case ... is being watched closely by observers of the high fashion industry, who believe it could empower the petites mains who work as tailors and seamstresses for powerful brands in France . . . If Colle, who claims Chanel used her pattern without placing an order, wins her fight, she believes it could have widespread repercussions."
Ms. Crolle claims a floral crochet pattern her company submitted to Chanel for consideration was copied by Chanel and used in their garments after Chanel informed Ms. Crolle that it had rejected the pattern. In May of 2006, after mediation between the two parties stalled, "the court appointed an expert to examine the sample provided by World Tricot (Colle's company) and the clothing claimed by Chanel that it had designed in-house. France has very stringent copyright laws, the first going back to 1793, that cover fashion design as works of art."
Chanel says that the crochet pattern in question is fully theirs, and the case has taken four and a half years to reach court (this is why people often settle lawsuits before a trial, as it can take years of legal wrangling before both parties even step foot in a courtroom), but Ms. Colle will not be deterred by the might of Chanel.
Speaking of ripping people off: Coach accuses Target of ripping off designs -- "Coach claims Target ripped off two signature designs, the Erago, which is marketed as ergonomically correct; and the patchwork design, which features patches of various fabric patterns. Coach released both of the designs in 2008, and the Target bags hit the shelves in or around the summer of 2009 . . . In 2006, Coach accused Target of manufacturing a lower-priced knock-off of a Coach handbag design. The similar trademark infringement lawsuit was eventually settled."
See what I mean about "settled"?
6.) Industry Quick Hits:
A.) Gucci family is furious over upcoming movie: "The Guccis ... have condemned the movie's director, Ridley 'Bladerunner' Scott, and his producer wife Giannina Facio for allegedly betraying their friendship . . . '[Ridley] Scott had assured us that it would not be a scandalistic movie,' Patrizia Gucci told Italian newspaper Corriere Della Sera, adding that the Gucci family is 'surprised and disconcerted' by new revelations about the movie's focus on the murder. The Guccis have now vowed 'This is not an authorized movie and we will try to block it if it is offensive.'"
In other words, "Yo, Hollywood! Hire us on as "consultants" or that film of yours will never see the light of day." I mean, what did the family think the movie was going to be about -- work-related conversation around the dinner table?
Angelina Jolie was rumored to be in talks to play Patrizia Reggiani Gucci, the ex-wife of Maurizio Gucci, who is presently serving a 26 year prison sentence for hiring a hitman to kill her ex-husband.
B.) The conical bra is back, but would you wear one? -- "The infamous cone bra corset that Jean Paul Gaultier designed for her Blonde Ambition tour became a cultural reference point, long before we realised that, actually, Madonna wasn't the first blonde to popularise this style of lingerie. Indeed, in the Fifties, Diana Dors and Marilyn Monroe were infamous for their unnaturally cone-shaped bosoms that helped shape that Fifties icon 'the sweater girl'. Flash-forward 50 years and it looks like this particular silhouette is back with a bang."
Damn the torpedoes -- full speed ahead!
C.) Christian Lacroix Gets His Mitts On A Bottle of Chivas: "Liquor supplier Pernod Ricard Travel Retail has launched a 1.5l limited-edition Chivas Regal bottle in partnership with French fashion designer Christian Lacroix, available exclusively with DFS Group at Singapore Changi airport. Only 15,000 bottles of the Chivas 12 Magnum by Lacroix, featuring a unique design applied with laser decoration technology, are available worldwide."
Just two weeks ago, it was Catherine Malandrino for Cointreau, and now it's Lacroix for Chivas. As the holiday season rolls ever closer, I predict we'll see a tsunami of brand name collaborations with designers.
D.) One cold hearted snake to go, please: "Whether it's bags, boots or blouses, the marbled, textured snakeskin look seems to be fashion's new favorite alternative to more traditional animal prints. It's not that snake -- which, except at the very highest price points, is actually embossed leather or fabric in a snakeskin pattern -- is new, but it seems fresher than now-ubiquitous leopard and cheetah spots."
You can say that again. I'd die a happy man if I didn't see another leopard spot anything for at least five years (though I'll forgive the transgression if it's got Christian Laboutin's name scrawled on it somewhere) -- but I'm down with the snakeskin!
E.) Milla Javovich gets creative with Tommy Hilfiger: "The model/actress, who previously had her own fashion label (Jovovich-Hawk) with catwalk beauty Carmen Hawk, is reportedly set to collaborate with the (Tommy Hilfiger) fashion house to create next season's Tommy Hilfiger Breast Health International bag for charity. Milla's bag will reportedly launch next April."
What was it we quoted earlier from Anna Wintour about celebrities and handbags? Oh, right -- "Every D-level celebrity who thought they could make a quick buck by designing a handbag or whatever is going to disappear. And I think that's a good thing."
Ouch!
Search
Comments