The Luxury & Fashion Biz: 08/20/10 (Of Hermes scarves, Mass-Market Unique and Ads for Ads)

1.) Hermes Shakes Off Its Heritage, Joins the Street-Style Bloggers:
“Hermes and its scarves are as iconic a pairing as Chanel and its twinsets, but while both are usually associated with high luxe and ladylike glamour, one look at the new fashion website Hermes has just launched will show you an urban cool side to the luxury French fashion house. Dedicated solely to its signature square scarves, the new website, called J’aime Mon Carre (I Love My Scarf), takes a street style turn as it shows hip young things working the scarves in ways Hermes would never have dreamed of – as turbans, headbands, belts, ties and, of course, as they were intended round the neck.”

Cruise over to the new website — no, really, go right now! — and you’ll probably be just as shocked as I was when I surfed on by. The rise of young, hipster style-bloggers with more time on their hands (and as much fascination with the mirror) than an Antoinette-ian outing at Versailles took the fashion world first by surprise, then by the throat, so I should have known it would be only a matter of time until a once staid house like Hermes crumbled before their mighty onslaught of cake and shoes.

But don’t get me wrong — I think the new website is pure marketing genius. While a colorful scarf has become one of the must-have accessories for any self-respecting fashion hound, the Hermes scarf, with its stiff-jointed reputation, was often overlooked by the trend-eaters in favor of glitzier, glammier affairs. And if there’s one thing a global fashion house can’t have, it’s a customer base that grows old and dies. Hence, jaime mon carre, where the models are old enough to drive but too young to buy their own beer, and $400 scarves are slung about on hips, necks and heads with insouciant cool.

After all, in a recession, when a $20,000 handbag isn’t even a glimmer of aspiration anymore in a young girl’s eye, a pricey silk scarf knotted like a belt around an impossibly thin waist can be the new social signifier that separates the girls who have from the girls who have not.

Speaking of social signifiers and girls who have: The Fashion Houses Wage a Dirty Little War via the Cast of Jersey Shore“Remember how Snooki, drunk or sober, was never seen without that Coach bag dangling from the crook of her arm? Snooki and her Coach were as synonymous as The Situation and his six-pack. But then the winds of change started blowing on Jersey Shore . . . Allegedly, the anxious folks at these various luxury houses are all aggressively gifting our gal Snookums with free bags. No surprise, right? But here’s the shocker: They are not sending her their own bags. They are sending her each other’s bags! Competitors’ bags! . . . Call it what you will — ‘preemptive product placement’? ‘unbranding’? … The bottom line? Nobody in fashion wants to co-brand with Snooki.”

Women across the country can now plot their own fashion-toxic publicity strategies. Instead of trying to garner 10,000 subscribers to a website with savvy makeup hints and style tips, just take a Fendi logo bag on a Friday night outing, drink too much and fall over into the curb in a pool of your own sick, all while your best friend films you with his/her cameraphone. Upload the designer-prominent clip onto YouTube and voila! You’ll have a pile of Gucci, Prada and Louis Vuitton handbags as fast as the planes can fly them over from China Italy. Hey, it worked for a Jersey Girl, right?

Speaking of Jersey Beverly Hills girls: Jimmy Choo, the fashionistas’ favorite shoemaker, could be about to change hands for up to £500m“The owners of the glamorous shoe business have been sounding out investment banks about ‘strategic options’ for the business. Sources said the company’s shareholders may appoint an adviser by the end of the summer to work on a strategic review. Selling the company, which has managed to expand despite the economic turmoil, is one option.”

Considering that a perfume range for Jimmy Choo was first announced back in 2007, then again in late 2009, but a bottle still has yet to hit the shelves, it sounds like the Choo might be craving a cash infusion (and short that, an outright sale) now that a cutback in consumer spending has favored established heritage labels over the flashy Jimmy come latelies.

2.) Selfridges Squabbles with Dolce & Gabbana, D&G “Flounces” Off:
“Selfridges will no longer stock Dolce & Gabbana products after allegedly having a ‘giant falling out’ with the luxury Italian designer . . . There were claims the retailer and the designer parted on bad terms after Selfridges proposed a change to the lines’ in-store positions, according to industry magazine Drapers. The co-owner of one premium brand said: ‘They have had a giant falling out and flounced off. I’m sure they will kiss and make up when they have cooled off. They’ll have to’ . . . Selfridges, bought by Canadian businessman Galen Weston in 2003, was recently named by retailers as the world’s best department store.”

So, yeah, it does seem like a rather shaky business decision to stomp out of the room and slam the door behind you when dealing with “the world’s best department store” . . . especially when #1) it’s a recession, and #2) they can do without you so much easier than you can do without them.

It reminds me of when Bergdorf Goodman and Neiman Marcus cut Versace menswear from their product lineups after Donatella shooed their buyer out of a front row seat at their January, 2008 fashion show in favor of seating Beyonce and her bodyguard. The two parties kissed and made-up, but Versace learned its lesson the hard way.

So will Dolce & Gabbana, if they don’t get over their Diva act.

What Selfridges might not be carrying come Spring

3.) New Era Wants You to Be Unique – Just Like Millions of Other People:
“Exhortations by advertisers to express individuality — by, oddly enough, consuming mass-market products — have grown louder . . . An example of how the mainstream is becoming a collection of niche streams is a campaign to be announced on Tuesday by the cap maker New Era, which carries the theme ‘Fly your own flag.’ The campaign, by a New York agency named Brooklyn Brothers, salutes ‘flag bearers,’ as it calls achievers who march to their own drummers (while, of course, wearing New Era caps) . . . Research found that ‘an underlying theme for our product is that people wear it to express themselves,’ Mr. Koch said. But it may seem paradoxical that people seek to express how unique they are by wearing a cap that multitudes of other people also wear.”

To be frank, it doesn’t seem like the smartest of ad campaigns, but the “Express Yourself!” mantra has been around for a long time in Western culture, and if there’s one thing that advertising agencies love to exploit, it’s the familiar.

But for a look at how the same kind of “be an individual” advertising approach can land you in a boiling kettle of controversy, take a look at the furor over one of Dior’s latest ad campaigns in China: “Continuing its love affair with our city, Dior has released ‘Shanghai Dreamers,’ a series of haute couture prints photographed by local talent, Quentin Shih. But the campaign has triggered accusations that its images of cloned Chinese people behind – usually – a white model dressed to the nines are pretty racist . . . How does this represent any ability to stand on a world stage except for as an accessory of a white person? And doesn’t this kind of feel like another ‘all look the same’ joke?”

In other China news, Levis launches new global brand, aimed at China: “Jeans maker Levi Strauss & Co. launched a new global brand in China on Wednesday, joining a growing list of companies that hope to crack this fast-growing and youthful market by tailoring their products to Chinese tastes . . . The new brand is aimed at young consumers in emerging markets, starting with China, Singapore and South Korea . . . ‘In the last few years we seen a new group of consumers,’ said Aaron Boey, president for Levi Strauss’s Asia-Pacific division. ‘Many of them want stylish clothes but at accessible prices,’ he said . . . The Levis brand enjoys an avid following in China, among a relatively limited number well-off younger shoppers, some of whom are collectors.”

The lower priced, made for China Levis line (not to mention the upcoming lower priced, made for China Hermes line) is tapping into what analysts call the pragmatic Chinese mindset: “Despite rising disposable incomes, Chinese consumers are not trading up indiscriminately to more expensive products. A shopper who splashes out on something will typically compensate by trading down on other goods. Max Magni, who leads McKinsey’s consumer goods practice in Greater China, said this pragmatic, thrifty trait was unique to China and deeply engrained in the culture . . . ‘The Chinese consumer remains extremely anchored to what they can afford at the moment.'”

Which kind of addresses the main point of this next article, Will Luxury Price Hikes Cool Chinese Tourist Spending?: “Rough statistics from local Chinese travel agencies show the number of participants of Europe tours have increased at least 30% this summer from a year ago; however, the recent price increases of luxury goods in Europe may just cool the spending of Chinese tourists . . . In late June, Chanel hiked prices by about 30% in all the stores in France, offsetting the 12% depreciation of the euro against RMB. In July, Dior and Gucci followed suit, raising prices by around 5%. It is unclear if Louis Vuitton, which already had the prices adjusted in early 2010, will join them.”

4.) American Apparel Co. is $120 million in Debt and Struggling:
“Here’s what it comes down to: Dov Charney started with an awesome concept but expanded too rapidly. Charney also let his controversial ‘work policies’ hinder the brilliance of his brand. (When you own a public company, you’re not only answering to your customers and your employees, but also to shareholders. You have to live and work by a different set of much stricter rules.) . . . It will probably mean less American Apparel stores, but honestly, they’ve become as ubiquitous as Starbucks in New York. I admittedly like to shop at American Apparel, but do I need two of them within walking distance of my apartment? Not really.”

To add insult to injury, investors have filed a class-action lawsuit against the company, claiming that the board of directors “mismanaged the company” and “irreparably damaged” its image. Controversy swirls around the company’s financial accounting, and they’re so late with the latest financial reports that they’re in danger of being delisted from the New York Stock Exchange (not to mention that their accounting/auditing firm just up and quit on them — probably not wishing to be associated with whatever cash counting practices they might potentially have unearthed).

If the company does survive, they’ll still need to shed retail outlets and do some drastic cost cutting.

Meanwhile, Abercrombie & Fitch is doing its own rethinking of the grow grow grow mantra: “The company also announced plans to close 60 domestic stores this fiscal year, predominantly at year’s end, and cut its planned international growth for the Hollister chain by 20%.”

And the former Gucci CEO, who’s now being courted to run the upscale Barney’s New York chain, has laid down the law with the investment group that owns Barney’s: “sources added that (Mark) Lee has been skittish about Barneys’ prospects as it looks to compete with its bigger, better-funded rivals Saks and Neiman Marcus. As such, Lee is demanding that Dubai-based Istithmar pour fresh cash into the company, according to sources briefed on the situation . . . Lee ‘is not interested in taking on an impossible task,’ according to one source close to the situation. ‘He wants to make sure he is backed by a serious partner.'”

But there are definite reasons to be skittish about pouring good money after bad in the present state of the American economy: 1.) A record number of U.S. workers are tapping into their retirement accounts to make it through the economic downturn; 2.) The government intends to beat the dead horse of the collapsed real estate market in order to stimulate growth and spending; 3.) U.S. bankruptcies surge to five year high; and 4.) Jobless Claims in U.S. Rose to Highest Since November of 2009.

If I were Istithmar, I might be hesitant to dump a fresh bucket of cash into Barney’s, too.


A.) It’s obvious that things are going from bad to worse when a global fashion company hypes its latest ad campaign as a noteworthy, buzz-culture event, but what about the product being advertised? Well, you know, LOOK AT OUR EXPENSIVE GLITZY AD INSTEAD!

All the king’s horses and all the king’s men . . .

And another well-known director and Hollywood star pair up for a big budget, glitzy perfume commercial:

Guy Ritchie and Jude Law in Paris for Dior Homme

Kapferer and Bastien write in “The Luxury Strategy” that the fragrance industry has ditched the primary luxury rules in favor of sales sales sales, and that this has hurt the industry in the long run: “Our anti-law number 9, ‘The role of (luxury) advertising is not to sell’, and number 16, ‘Keep stars out of your advertising’, are increasingly neglected in perfume; the systematic use of regularly changing stars in advertising, and the massive investment in television, are completely opposed to a luxury strategy . . . (these) methods are directly inspired by mass consumption marketing, image marketing, whereas in luxury it is the brand identity that (is supposed to) take precedence.”

I mean, my god, even Playboy is getting in on the act, releasing a perfume trio. Can the market possibly support any more product?

B.) I never thought I’d see the day when a brand produces its own cheap knockoffs: “So, we know you’re excited for Mulberry’s Target collection, which is debuting on Gilt tomorrow. In fact, you’re so excited that we’re betting Gilt Groupe is going to be full-on bombarded at noon EST by eager shoppers.”

Mulberry for Target. Look at the photos and weep, oh ye Mulberry fans — look at them and weep.

Speaking of knockoffs, Victoria Beckham has hired a “consultant” to “help her” design a handbag collection. The “consultant”? None other than the woman responsible for designing some of the most successful Marc by Marc Jacobs bags.

C.) I guess it’s a good thing that designers are starting to get serious about offering plus size items for consumers: A quarter of women are size UK18 (16 U.S.) or bigger – up 45% in five years.

Western fashion houses will need to continue to develope separate lines for Asian consumers just to address the growing size differences. But even if you build it, they won’t always buy.

D.) It’s the end of the world as we know it: Nikki Hilton posts first preview of £695 Jimmy Choo UGGs on Twitter.

Maybe it’s too late to sell the Jimmy Choo company, after all?


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