1.) Feds Warn Holiday Shoppers to be Cautious Against Fakes:
"'If the price is too good to be true, it probably is too good to be true,' said Claude Arnold, special agent in charge of investigations for immigration and customs enforcement in a five-state area including Minnesota . . . The troubled economy combined with consumers' growing demand for brand names at bargain prices has fueled the trend, officials say. Last week, Arnold's agency busted 21 Twin Cities businesses, seizing 17,000 counterfeit items with an estimated street value of $643,000 . . . Such fraudulent merchandizing is bigger than most people imagine, said Officer Brad Wick, a Duluth police spokesman."
A video clip below with some consumer opinions regarding counterfeit goods:
2.) The House of Lacroix Reduced to Licensing Operation:
"Christian Lacroix, the company behind the designer known for his baroque and embroidered dresses, was once part of French luxury giant LVMH and now belongs to the Falic family, owners of U.S. retail group Duty Free Americas . . . The Falic group's turnaround plan consists of halting Lacroix's haute couture and pret-a-porter activities, with the aim of licensing them out to a third party in the event of a takeover. Out of a staff of 120, only between 15 and 20 workers would be retained to maintain the licensing contracts for accessories and perfume."
For a while there, it looked like there were several suitors for the hand of Lacroix, but they all backed out by the time the French court was due to make its ruling regarding the restructuring of the company. Several analysts have noted that a buyer could still step up to the plate, but as it stands right now, retail operations for the brand have ceased activities and the only movement forward is licensing the name out.
So instead of seeing more Lacroix haute couture in the upcoming seasons, we might instead see new Lacroix perfumes, sunglasses and housewares hitting the retail shelves as licensing/manufacturing companies purchase the rights to exploit the Lacroix name.
In related Lacroix news: Paris's Christian Lacroix Sells Apartment After Price Cut -- "Fashion designer Christian Lacroix has sold a Paris apartment for €1.2 million, or about $1.8 million. Mr. Lacroix originally listed the apartment in January for €2 million (or just over $3 million U.S.)."
It hasn't been a good year for Lacroix, and the Telegraph U.K. thinks they know why: "Although Lacroix was adored by fashion editors and celebrity A-list customers for his extravagant, fairytale clothes, couture is a notoriously loss-making activity . . . To survive, haute couture must be built on a pyramid model: haute couture at the top, followed by ready-to-wear, perfumes and accessories ... It is a 'shop window', an advertising investment. But if there is nothing to back it up, it doesn't work."
The Lacroix brand's attempts at mass market fragrance and accessories were rejected by the mainstream consumer, giving the fashion house nothing to fall back on as their extravagant haute couture and ready to wear lines continued to lose money for them season after season.
Below is an advertisement for a Lacroix fragrance released earlier this year in collaboration with Avon -- Absynthe. The fragrance didn't create much of a stir (despite its arguably gorgeous advertising clip), while the conjunction of high-end, extravagant French Lacroix design with a perceived low-end direct sales marketing company doesn't really seem to fit either brand's image:
3.) Alligator Farmers are Pointing the Finger of Blame at Hermes:
"Some farmers insist that the newfound frugality of the Gucci set cannot by itself explain the absolute washout of the alligator business. More than a few are beginning to blame the practices of executives in the European fashion business . . . In the mid 1990s, Hermès began buying tanneries and, as of a couple of years ago, became the largest player in the exotic tannery business. Hermès bought aggressively from the farmers, and is still buying, though recently at prices far lower than in the past and lower even than the price of raising an alligator ... While the tanneries are offering farmers little for their raw product, citing the recession, fashion houses are complaining about the astronomical prices for tanned hides. Many labels are giving up and moving away from alligator altogether, and well-known luxury brands like Manolo Blahnik say it is increasingly difficult to make a profit on such an expensive product."
So the farmers are saying that yes, the recession has hit the industry hard, but then how is it that they're being paid less and less for their skins as the fashion houses claim they're being charged more and more for the finished, tanned hides?
If demand truly is down (which it is), necessitating paying the farmers less for the skins, then the prices for the finished hides should be down as well . . . but that's not happening, raising suspicions that Hermes is using the current recession as a means of reducing the glut of alligator farmers, weaning other fashion companies off of the idea of cheap alligator skins and restoring the once prized (but now increasingly ubiquitous) alligator to its former exclusive glory.
Forcing the majority of indpendent farmers out of business will result in scarcity and so drive the prices of the skins back up to sky-high luxury brand levels. It's a brutal, though effective, way of doing business, and no, Hermes is not required to support a large alligator industry if it doesn't wish to -- though the company doesn't win itself any admirers from the farming labor force in the process. Fortunately for Hermes, the farming labor force is not their target market.
As long as we're on the subject of driving companies out of business: Liz Claiborne Smacked With $20 Million Lawsuit -- " Selective Beauty - a former distributor of Juicy Couture and Usher fragrances in Europe - has smacked Liz Claiborne with a $20.2 million lawsuit that claims Claiborne caused the French firm to go bankrupt when it licensed its fragrance portfolio to Elizabeth Arden."
Selective Beauty was the exclusive European distributor for Liz Clairborne fragrances (which include Juicy Couture and Usher) until Claiborne signed a deal with Elizabeth Arden and cut Selective Beauty out of the picture altogether. There was no breach of contract on the part of the Claiborne company as there was no formalized agreement between the two companies, but Selective Beauty is angry at having spent years building up a market for the Claiborne products only to be swatted away like an annoying little fly once their efforts proved fruitful.
Moral of the story: get everything in writing! Claiborne could not have done what they did if Selective Beauty had a contract with them, but they didn't, and now the Selective Beauty company is screwed. But hey, that's what lawsuits are for, right?
4.) Survey Says That Smelling Good Might Make You More Attractive:
"Research underlines that to the majority of women the right fragrance can make or break their evening out . . . A quarter of women say a man they don't know has asked them out after commenting on their perfume, and 82% think wearing perfume is essential when going out on a date . . . The survey also revealed that that 57% of women are sure fragrances help them attract men when they're out on the town, and 22% have perfumes they only wear when they go out looking for a date."
Chanel No. 5 was listed as the most popular of the "romantic" fragrances, with one out of ten women claiming that they were wearing No. 5 when they met "the man of their dreams" . . . of course, there's no information listed as to whether that dream stayed particularly rosy. But if 50% of marriages now end in divorce, does that mean that Chanel No. 5 is potentially responsible for 10% of all divorces?
I think that's a question we're not supposed to ask.
In similar news, Dr. Avery Gilbert over at First Nerve calls attention to a study titled, Effect of a perfume on prosocial behavior of pedestrians -- "When the young woman who dropped a glove was wearing perfume, the target person called it to her attention 95% of the time compared to only 70% of the time when she was wore no perfume. The difference--the perfume effect--was statistically significant."
There's much more about the study and its results at Gilbert's site. Interestingly enough, the fragrance that the researchers used in their test? Coco Chanel. What is it with Chanel, anyway? Are they, like, the Dr. Feelgood of fragrance houses?
Now I feel like helping someone find a lost glove . . .
Yet since we're talking (and apparently won't shut up) about perfume: Golden age of perfume in the air? -- "Niche fragrances from small independent players, such as the Morocco-based Frenchman Serge Lutens, account for less than 10% of the market but are pushing the envelope of creativity, appealing to a small, fanatical and growing clientele. Niche fragrances have experienced double-digit growth this year, according to Grant of the NPD group. 'They're really small in their overall penetration in the marketplace, but they seem to be an area where consumers are gravitating,' Grant said."
In the same article, perfume critic Luca Turin mentions that Ormonde Jayne's new Tiare fragrance is "the best scent he has smelled recently."
Nice props for Ormonde Jayne -- one of my own favorite independent perfumeries. Go Jayne!
5.) High Fashion Houses Hit the Internet:
"Italian fashion houses including Giorgio Armani SpA and Valentino Fashion Group SpA, which have traditionally spurned the Internet, are testing Web stores this holiday season in a quest for new sources of revenue . . . Web sales of Italian luxury goods are expected to soar 42% to 335 million euros ($500 million) this year, according to a study by Politecnico. That beats a 6% decline to 3.48 billion euros for the overall industry in a survey by fashion consultant Carlo Pambianco."
So yeah, it's great to welcome Armani, Valentino, Oscar de la Renta, Alexander McQueen, Roberto Cavalli, Salvatore Ferragamo and Proenza Schouler to the web, but the shocking part of the equation is just how long it's taken them to get there . . . well, except for Proenza Schouler, which hasn't been around that long.
And while web sales for luxury brands are expected to increase by over 40%, the percentage of sales via the web is still quite small compared to the overall revenue generated ($500 million vs. $5.25 billion). Still, in these make or break days, every dollar gained is precious. If Lacroix and Yohji Yamamoto had established e-commerce shops years ago, would their brands have fared better? Would their fragrances and accessories have connected with a broader public? Would they still have gone bankrupt?
6.) INDUSTRY QUICK HITS:
A.) Facebook is changing the rules of online retail: "The business model for online retailers is being turned on its head. It used to be that consumers would visit individual company websites to shop. But now companies are seeking out consumers where they spend most of their time: on Facebook."
Okay, I spend some small portion of each day checking Facebook, messaging friends and catching up with what people I know are doing, but "most of my time" . . . ? Hardly.
B.) Men are eager to show you their cleavage: "Man cleavage -- plunging necklines slit open to reveal chest hair, pectoral muscles, maybe more -- is back . . . Helping to pave the way were magazines like Men's Journal and Men's Health, which objectified the male torso on their covers. Marketers such as Abercrombie & Fitch attracted droves of fans with their buff, waxed male models. For those who don't have the goods naturally, cosmetic surgery offers an increasingly popular solution. The American Society of Plastic Surgeons reports that pectoral implants more than tripled in 2008, to 1,335 procedures up from 440 in 2007."
You know, I've been wondering what's up with all those really low v-neck t-shirts I've been seeing lately . . . in 40-50% off sales. In summary: just because Tom Ford likes to wear his shirt unbuttoned to his abs doesn't mean it works for the other 99.9% of the population. It doesn't necessarily work for Ford, either, but it's a free country and he thinks it's sexy, so we humor him.
C.) Why the Luxury 'Rebound' May Be Premature: "Data on actual sales, rather than hopeful predictions, suggest shoppers-even wealthy ones-are still in a discount mood. Sales of luxury goods fell 9.2% in the first two weeks of November from the same period a year ago, according to MasterCard Advisors' SpendingPulse report, and that is on top of steep year-earlier declines. That makes this October, when luxury sales rose 6.6%, look more like a false dawn."
Financial analysts have been doing the touchdown dance for the last month over what they're jubilantly describing as a "recovery" in the retail sector, the economy, the jobs numbers, you name it -- but the facts are slippery, and it's best not to let a sense of determined hope get in the way of what could turn out to be an entirely different reality.
Here's what we know: 1.) nearly half of all U.S. states are borrowing money to hand out unemployment benefits, which means that half our states are broke while unemployment is continuing to rise (17.2% when counting total unemployment); 2.) November same-store sales numbers (a much more thorough indicator of the long-term economic condition) fell 0.3%, missing the 3.4% projected increase; 3.) the Middle East financial situation appears to be worsening, and the Middle East was a hoped source of recovery/growth for both the luxury fashion and luxury beauty industries; 4.) many analysts believe the Chinese economy is overheating in exactly the same way the U.S. economy overheated running up to our present recession/collapse, yet the luxury industry has placed nearly all its eggs into China's government-stimulus-money basket.
Based on the above, 'premature rebound' seems like an accurate a definition as any.
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