I'd like to post every intriguing news items regarding the luxury industry in my weekly roundups, but the posts would become overly long and unwieldy and what's luxurious about that?
Right. That's what I thought.
But here are a few items from last week that I think are worth mentioning, and I hope you'll forgive me for putting you through even more news influx (though I have a sneaking suspicion that the Christmas season is going to be one long, extended headline for the retail industry).
1.) Thieves Steal Victoria Beckham Dress Collection for Neiman Marcus:
"In a heist executed last Thursday in London, two armed thieves hijacked between 50 to 75 dresses from Victoria Beckham's Spring/Summer 2010 collection from a van. The shipment of designer duds was bound for Nieman Marcus in New York. The dresses are estimated to be worth over $575,000 . . . A spokesperson for the former Spice Girl said that she hopes the collection can be remade in time for delivery to Nieman's."
The thieves broke into the delivery van as it was on a stop before the dresses were to be flown from Heathrow airport to the New York Neiman Marcus. London police are investigating, and it's rumored that the theft was an inside job as the thieves went straight to the boxes containing the Beckham collection and took only those.
What surprises me most about the story, however, is the valuation of the goods: 50-75 dresses at a total value of $575,000.00 (a Seattle news article put the valuation at almost $630,000.00). But using the $575,000.00 number, that would mean the dresses were scheduled to be sold at prices ranging from $7600.00 to $11,500.00, which seems uncharacteristically high for a fledgling celebrity fashion label, especially one being launched during a global recession.
Which leads me to believe that either #1) the numbers reported are wrong; #2) someone's trying to pad their insurance claim; or #3) those are some ridiculously fine duds turned out by a fashion label that's so far only notable for $300-$500 dollar jeans and sunglasses.
Below is a video clip of an interview with Victoria Beckham about her upcoming fashion collection. Several of the items are displayed during the interview, and while they're beautiful and nicely designed (and look just like pretty much everything else that trots down the runways from YSL to Narciso Rodriguez to Versace to you name it), I didn't see anything that justified a $7K-$11K price tag, so I'm having my own personal doubts about explanation #3:
And speaking of criminals: Dooney & Bourke co-founder sentenced to one year in prison for bribery in an Eastern European oil scheme -- "Frederic Bourke, the co-founder of handbag maker Dooney & Bourke, was sentenced to one year and a day in prison and a $1 million fine for conspiring to pay bribes to leaders in Azerbaijan in what U.S. prosecutors called one of the most corrupt investment schemes in the former Soviet Union . . . Assistant U.S. Attorney Harry Chernoff called the scheme 'one of the most audacious and most corrupt' ever attempted in the former Soviet Union. In court, he said Bourke actively promoted an investment he knew was corrupt in an effort to help (Czech expatriate Viktor) Kozeny 'purchase the entire oil wealth of a sovereign nation.'"
Oh for crying out loud -- why didn't he just hold a $10,000.00 a plate fundraiser? That's how civilized people get things done!
2.) Bottega Veneta Will Soon Have Its First Fragrance:
"Bottega Veneta and Coty Inc., a leader in the global beauty industry, announced today the formation of an exclusive partnership to create, develop, and distribute a line of fragrances under the Bottega Veneta name. This will be Bottega Veneta's first fragrance collection."
And no, it's not a coincidence that Bottega Veneta is hopping on the fragrance bandwagon just as sales of their handbags and leather goods are succumbing to the cruel trick of gravity.
But I don't doubt that it's a smart move -- BV has managed to establish a reputation for high-end, high-quality, logo-free leather products (a contemporary Hermes, so to speak) at prices so high that hardly anyone can afford them. They have a clothing line, as well, but the handbags, wallets and other leather goods are the bread and butter of the BV line. Introducing a fragrance collection, if it's done properly, is the best way for the company to bring in extra revenue without resorting to the production of cheaper leather goods that would tarnish their reputation.
It certainly works for Hermes.
A video clip below of the Bottega Veneta Spring/Summer 2010 collection -- you'll notice that the bags are the true stars of the show:
Re: clothing collections not really being the bread and butter of a fashion house, I was reading an article about the rise of designer Alexander Wang when I ran across this surprising tidbit: "Retailers say that more than 50% of (Wang's) clothing sells at full price, impressive compared with less than 20% for some more established brands."
Less than 20% of collections from established designer brands sell for full price! It's no wonder that luxury brands grasp at accessories and fragrances to get them through the day. Side note: is this saying something notable about the collections that most designers produce?
But as long as we're talking about spending, Forbes published an analysis piece last week on the Saks Fifth Avenue retail chain. The overall prognosis was not good (count how many times they say "Saks is f***ed" without actually saying "Saks is f***ed"), but here, in my opinion, is the money quote: "'There is no question that aspirational consumers are out of the market now -- they're gone,' said (Milton Pedraza, chief executive of the Luxury Institute, a New York-based consulting company)."
Considering that the aspirational consumer (the consumer that spends more than he/she can afford in order to possess the accoutrements of a lifestyle that's technically beyond his/her reach) was *the* backbone of the contemporary luxury trade, that particular statement is the equivalent of a doomsday event for the global fashion industry. Just sayin'.
In other fragrance news: Jennifer Lopez has announcing another Glow flanker, and it will be a fruity floral (*snore*), but the more interesting news is that the fragrance company is being upfront about it containing a synthesized aromachemical called "florymoss" -- "Florymoss is a molecule developed by fragrance manufacturer Givaudan, which - with its mossy scent - enhances floral perfumes."
Here's a link to a 2008 NYTimes article (written by Chandler Burr) about the production and use of patented aromachemicals in perfumes and perfumed products: Ahhh, the Seductive Fragrance of Molecules Under Patent -- "Scent makers ... spend billions on research to find new smell molecules, patent them and sell them. The innovative scents of these 'captives', as the patented molecules are known, are crucial to enticing consumers to buy the 600 or so new perfumes introduced every year and appealing to buyers of other fragrant products like soaps and air fresheners."
Speaking of fragrances and soaps: Limited Brands Inc. Smells Success at Bath & Body Works -- "Limited Brands Inc. is known for its high-profile lingerie chain Victoria's Secret, but its fortunes are increasingly dependent on its soap-and-fragrance chain Bath & Body Works, which is expected to produce slightly more than 40% of its parent's operating profits this year . . . This year, Bath & Body Works' product line of high-margin shower gels and lotions are expected to contribute $313 million, or 41%, of Limited's operating profit. That is up from 30% the previous year."
You see? It's become increasingly clear that the big story for the fashion industry is not the fashion, but all the little accessories that a high-profile "fashion" image can help sell. I mean, who knew that the wind beneath the wings of Victoria's Secret smelled like Bath & Body Works?
3.) Valentino Fashion Group more than $2 Billion in Debt:
"Permira and other shareholders of Valentino Fashion Group plan to invest up to 300 million euros ($452 million) to reduce the Italian fashion house's debt of about 2.2 billion euros by about a third, the sources told Reuters on Friday 4 December. The deal to buy back the debt at a steep discount to face value will close in the next couple of days and will see Citigroup exit the fashion group's lender pool, leaving UniCredit and Mediobanca."
I watched the documentary "Valentino: The Last Emperor" this past weekend, and it's a fascinating film, not because Valentino is fascinating (the documentary doesn't pull any punches in portraying him as breathtakingly narcissistic) but because it shows the enormous shift in the direction of the luxury industry, from the artistry and craftsmanship in the 1960's when Valeninto got his start (and went bankrupt once before), to the "Just the bottom line, ma'am" attitude of fashion houses run by investment groups today.
But $2.2 billion of debt? How does a bunch of bankers let that happen? Oh, wait, why am I even surprised . . .
Clip below of the trailer for Valentino: The Last Emperor:
Watch it if you get the chance. Just be prepared to grit your teeth a bit whenever Valentino's on-screen (which is a lot).
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