Luxury Industry News Roundup: 02/26/10

1.) London Fashion week came and went, and now Milan is tossing styles down their runways (ending on Monday), followed by Paris all through next week. Just a few highlights so far:

In London, the fashion crowd lost their minds for the crazy-oversized Aviator coats at Burberry (Burberry broadcast their show in digitally forward 3-D for those that couldn't attend in person). Some editors stated that the coats were really the stars of the show, along with thigh-high leather boots and studded bags (dresses? what dresses?).

Burberry also took the unprecedented step of offering some of the bags and coats online for 72 hours after the collection debuted, allowing consumers to seize the moment and snag a highly coveted item without having to wait until Fall. This might just be the future of fashion, as consumers are growing impatient with the "Show Now, Sell Six Months Later" routine -- get 'em while they're hot!

The new Fly Girl

From Grazia Daily: "My American friend called the Burberry show Tuesday a 'fashion-gasm'. That about sums it up for me too, but not for the same reasons. The show was a triumph. It created need where there was none. It set trends and was dramatically staged with celebrities and plenty of pomp."

*Note: On a not-so-up note, Burberry has shut down its independent Spanish operations due to the financially squeezed Spanish economy, resulting in a loss of over 300 jobs. Its Spanish subsidiary, the only subsidiary that manufactured Burberry designs tailored to the regional clientele, will be folded into the global Burberry brand, with global Burberry merchandise replacing the Spanish manfuctured pieces in the stores.

The other key trend-influencing London show was from young, up-and-comer Christopher Kane (Kane's label was founded in 2006, begging the question, "How many years can a designer be an up-and-comer before actually being forced to arrive somewhere?"). He applied bright, floral 1970's bohemian-hippie embroidery to tough black leather & lace pieces. It shouldn't have worked at all, but I found the concept so out-there and potentially wrong that it was absolutely and completely right.

How poisonous does your garden grow?

Suzy Menkes writes: (Kane's) precision is his strength . . . this was a show to savor for its outward prettiness and to ponder for its interior vision."

And moving on to Milan, Prada made waves when they ditched the super-skinny look and flew in a pack of Victoria's Secret models at the last minute to add a bit more curve to a 1950's Mad Men influenced collection that favored a buttoned-down sex appeal over the "powerful 'ugly' aesthetic" of past years:

Victoria's Secret Secretaries

From the Wall Street Journal: "A collection of dresses and skirts that any mother could love. Or a librarian for that matter, if she were an impeccably dressed and wealthy librarian. With cat-eye glasses and a hair-sprayed bun in her hair . . . They were pretty, which isn't what you expect to say of a Prada show - this being the designer who gave us wool underwear and fishing waders a year ago."

The biggest names have the most to lose in this economy, which is why we're seeing collections from Marc Jacobs, Michael Kors and Prada that are color safe, real-world figure friendly, and as functional (i.e. winter warmth!) as they are attractive. I've found it especially intriguing to watch Miuccia Prada, the queen of crazy-cool, rein it in and tamp it down as retailers cut back on inventory in response to softening consumer demand.

But as long as we've brought up the subject of Prada, the fashion industry's most coveted marketing tool, Lady Gaga (of course), is sporting specially created pieces from both Armani and Prada on her current world tour. Versace was apparently asked, but declined.

As NYMag says: "She's certainly come a long way from the days of $20 lace body stockings and homemade disco-ball bras."

2.) eBay Joins the Sample Sale Madness:
"Following the success of sites such as Gilt and Rue La La, online auctioner eBay is entering the sample sale game with Fashion Vault (launching in March) . . . Boutiques with heavily discounted designer items will be online on a weekly basis to start with, and shoppers need to be registered with eBay to take advantage of the special offers."

I'm wondering if eBay might be a little late to the party, what with sites like Gilt Groupe, Haute Look and Rue La La having already established very firm positions in the marketplace -- but, eBay is global, and has a distribution network in place that can outdo every single site just mentioned.

They likely won't provide the same type of online ambience and extra service that a site like Gilt Groupe affords (an attractive website, easy ordering, nice packaging), but the sales will be offered through eBay, so there won't be the unfortunate "is this a fake?" questions that buying from eBay can provoke.

Obviously, consumers have a trust problem with eBay, and I'm sure they're hoping that offering more officially sanctioned collections like this can help repair the damage that unscrupulous resellers have done to the site's reputation over the years.

Besides, sample sale-ing is so very 2000-Now!

*Note: the future eBay sample sales will undoubtedly follow their current Narciso Rodriguez model.

3.) Saks Fifth Avenue Does Better Than Expected:
"Luxury department store operator Saks reported better-than-expected quarterly results . . . The company, which was one of the hardest hit retailers during the financial meltdown ... said it plans to cut down on the number of days it offers promotional sales in a bid to help boost margins . . . 'We believe there is more stability and predictability in our business compared to this time last year; however, the overall environment remains somewhat uncertain and challenging, and we are approaching 2010 with continued caution,' CEO Stephen Sadove said in a news release."

Though "better than expected" is faint praise when it comes to Saks in this economic climate, as no one was execting them to do particularly well at all. Overall sales fell 3.4%, while sales at stores open at least a year (the indicator that means the most) dipped 4.8% in comparison to last year, which was a bad quarter in and of itself.

Saks said it hopes to halt the erosion of sales by offering twice as much exclusive merchandise as it does at present (such as Zac Posen's new mid-priced American sportswear line Z Spoke).

In similar news, high-end jeweler Cartier is taking an axe to its accounts list (other stores that it allows to sell its merchandise), with "a person in a position to know" stating that between 120 and 140 store accounts were being closed. The article notes that diamond brand Hearts On Fire was also moving to close over 100 store accounts in the U.S. due to poor sales (global diamond supplier De Beers posted a $32 million dollar loss for 2009 compared to a $279 million profit for 2008, while mass market jeweler Zales is also posting a significant loss).

Lower-end retailers, however, are doing much better than the high-end: The Gap reported a profit surge of 45% due to higher profit margins and increased sales; Kohl's reported an earnings increase of 28%; discounter TJ Maxx posted a 58% leap in quarterly profit as sales increased by 10%, while also announcing ambitious expansion plans; Target reported a 53% profit increase; Sears posts its best quarterly profit in three years; and Macy's stated a net income of $466 million compared to the loss of $4.77 billion last year.

WWD reports that Wal-Mart saw a 7% increase in sales for all of 2009, but that they're struggling with their apparel selections, unable to find the right combination of basics and fashion that pleases their customers.

4.) Are Runway Shows Still Effective?:
"Maybe runway shows are really worth the six figures it costs to produce them. The Wall Street Journal teamed up with NetProspex, a sales and marketing database to find out. In the days following the shows, NetProspex tracked the number of sales inquiries for designers who presented at New York Fashion Week. Most designers saw an increase in inquiries of about five times their normal rate . . . Diane Von Furstenberg (saw a dramatic) 1150% increase."

A video clip below of Furstenberg's Fall 2010 show, the one that shot her web inquiries through the roof:

Go ahead -- you know you want to Google me!

But would a splashy video presentation work just as well? Would the YouTube visits, website hits and embedded videos across the fashion blogosphere have just as much an impact as a live show? This is a question being asked a lot as brands are looking to cut costs while still getting the word out about their new collections.

Former Dior Homme designer Hedi Slimane was asked in a recent interview about the future of the catwalk, and he replied: "I like the ritual, the liturgy of a well-crafted, emotional fashion show. I will never be jaded with this side of fashion. The 'catwalk' is pure anthropology, something like an esoteric encrypted parade. It can totally be replaced but it will be missed."

5.) H&M Jumps Aboard the Beauty Train:
"It's already the go-to spot for everything from Jimmy Choo shoes to toddler clothes. Now H&M is adding a beauty division to its roster of products. The line includes shower gels, body lotions, scrubs and lip balms that all include natural and organic products certified by Ecocert . . . The beauty line hits H&M stores in early March and prices range from $5-$7."

Which makes a huge amount of good, rational sense (not a trait that big retailers always possess) -- H&M already has the fast-fashion crowd in its pocket, so why not keep them there with basic cosmetics products that they need to purchase, anyway. And what could be more "in fashion" than using the words "natural" and "organic"? Nothing, I tell you!

Beauty is big business, especially as sales on higher-end apparel and accessories continue to wane. Walgreens just announced that it's acquiring New York based drugstore chain Duane Reade, which has built itself a reputation (and a clientele) for cultivating cutting-edge yet affordable beauty brands through pioneering "a store-within-a-store prestige beauty concept called 'Look Boutique'." Duane Reade has 257 stores in the New York metropolitian area alone, and Walgreen's is hoping that Duane Reed's experience in the beauty boutique area can help them transform their own lackluster image.

In related, "much depends upon this" news, Chanel is launching a new shocking blue nail color (Nouvelle Vague) that it hopes will replicate the buzzy, sell-out successes of its wildly hyped Jade and Particulière shades. Sarah Vine writes at The Times UK: "There's a lot riding on the success of this little pot of polish. It's not just the waiting lists, or the crazy prices on eBay, or the rip-offs that will inevitably follow; it's the value that repeating the sell-out success of last season's hit colour has for a brand such as Chanel . . . It's the brainchild of Peter Phillips, Chanel's creative director of cosmetics, and the man responsible for pushing, very gently and respectfully, the boundaries of the brand."

Another brand that's pushing boundaries in the hopes of igniting mainstream frisson is Serge Lutens, the uber-boutique fragrance brand that's a subsidiary of Japanese cosmetics giant Shiseido. Lutens has built a reputation for challenging, complicated and densely French works of perfumery, yet the month of March sees the global launch of L'Eau Serge Lutens -- a mimimalist, clean scent that breaks tradition with the fragrance house's past. The shape of its bottle even different from the brand's other releases, visually cueing the consumer to expect something new.

The speculation for the break in style has been that the artsy Lutens brand is experiencing decreasing sales (like everyone else) and needs a mainstream friendly shot in the arm to keep itself afloat. WWD reports: "Serge Lutens brand executives would not discuss sales projections, but industry sources estimate L'Eau Serge Lutens will generate 10 million euros, or $13.6 million, in first-year retail sales worldwide."

A celebrity scent like Beyonce's Heat can generate at least $100 million in sales in its first year on the market.

6.) Barney's Creative Director Doonan on Bloggers at the Fashion Shows:
"I loved Thom Browne, especially the groovy new eyewear, but the shows this season were full of teen/tween bloggers. I feel like they are trying to nudge me out of my front-row seat. Luckily, I have a plan for next season. Since they are all about my height, I am going to impersonate one of them."

And 'The September Issue', the documentary about Anna Wintour and Vogue Magazine, just came out in digital format. I've been watching it for the past couple of days, and I love it -- maybe because it reveals so starkly and clearly the tension between art and commerce.

The relationship between chief editor Anna Wintour and creative director Grace Coddington is the embodiment of this very struggle. They know they need each other, but it's generally the artsy one who gets upset and hurt when the commerce side has to make the difficult decisions.

For example, there's a great running thread throughout the documentary where Coddington has produced a gorgeous, but decidedly non-commercial, Galliano photo shoot for Vogue's September issue. You can tell Wintour doesn't want to hurt Grace, but she has to axe the shoot -- the wistful, lush romanticism doesn't suit a hugely commercial endeavor.

Coddington huffs and puffs about it, complaining to everyone in earshot, but she eventually pulls through at the very last second with a terrific, highly contemporary and "reality" influenced photo shoot that gives Wintour exactly what she needed to round out the issue.

Well worth watching, and I found it light years better, both in style and substance, than the Valentino documentary. So why wasn't it nominated for an Oscar? Who knows. Video clip below of the trailer for the film:

It's good to be the Queen