Luxury & Fashion Biz News: 10/15/10 (Oscar de la Renta, China Spends, Spider Silk and more)
*I’m presently gearing up for the big move-out and international relocation at the end of next week (the house is in chaos, with boxes everywhere), so fashion biz coverage will necessarily be light for several weeks (starting today) as real life obligations interfere. But I’ll still try to provide a rundown of basic info. In the meantime, thanks for your patience!
1.) Oscar de la Renta Rumored to Step Down as Head of His Label:
“Fashion insiders were abuzz about de la Renta’s failing health during New York Fashion Week last month, after the designer, 78, recovered from hip-replacement surgery. Though he was well enough to walk the stage at the end of his show, insiders say that since then, ‘Oscar is in the office taking meetings, but is weaker and takes naps to rest. There’s speculation that staff and designers have recently been hired to prepare for a possible future with Oscar taking a lesser role.’”
The official word from the de la Renta camp is that Mr. Oscar is fine, but the rumors are still swirling, with word out that former Nina Ricci head designer Olivier Theyskens was considered last year as a new hire to take over the reins from the aging de la Renta.
Styleite weighs in with this assessment of the situation: “We certainly hope the shiny press release version of this story is the truth. We love Oscar and we have ever since we bought a pair of his glasses in college. But every dynasty needs an heir, and as much as we hate to say it, it might be time for the king of ruffles and evening wear to pick someone to wear his crown.”
Which is the truth for several labels at present, where aging designers are offering no clear paths of succession: Giorgio Armani, Karl Lagerfeld at Fendi & Chanel, Vivienne Westwood, Miuccia Prada, Rei Kawakubo at Comme des Garcons, John Galliano at Dior. Many of these have plenty of years left for solid work, but I find it somewhat shortsighted that several of fashion’s biggest names seem to have trouble sharing the spotlight and offering clarity for the brand’s future after they’ve retired — as if the tacit acknowledgment that they won’t be around forever might somehow diminish their own importance.
Below are highlights from the Oscar de la Renta Spring 2011 collection shown in New York City:
Sugar and spice and everything nice
2.) About that “Old Shanghai” Look Marc Jacobs Showed for Louis Vuitton:
“Those who know the Chinese market seem to agree that this collection, with its exaggerated use of Chinese elements, is not likely to appeal to the Chinese market. Torsten Stocker of Monitor Group … observed that with ‘cliched’ elements that ‘reflect a Western image of what Chinese design looks like,’ Jacobs’s SS2011 collections may not truly appeal to Chinese consumers. While the clothes ‘might be good for a Chinese star to wear in a Western setting,’ Stocker said, the collections would be less successful with the broader Chinese market.”
Although, with Louis Vuitton, the clothing isn’t really the point — it’s all just a backdrop for the accessories, which is where LV pulls in most of its revenue, and it’s certainly no secred that China has become a very important market for Louis Vuitton (if not nearly every single other global fashion brand on the planet). The article notes that, “Excluding Japan, the (Asia) region contributed 26% of the company’s overall revenue in June 2010 and 31% of its fashion and leather goods revenue.”
With numbers like those, I’d be putting stuffed tigers on my runway, too.
So while the Chinese consumer might not care so much for the LV Ready To Wear, they’ll certainly note that the runway was aimed their way and appreciate the gesture when browsing the handbags, luggage, timepieces, shoes, scarves and jewelry.
Video clip below of the Louis Vuitton Spring 2011 collection:
“I’ll give you television, I’ll give you eyes of blue”
Terrific Asian market growth aside, the Toronto Star writes that strong LV revenue reports may be partly because other brands have exited the market, that the luxury spending levels of Chinese tourists may be unsustainable (gee, you think?), and that “some of the margin gains are in part due to cost cutting efforts that occurred during 2008 and 2009, some of which are likely to be permanent. However, items such as marketing, SG&A, and input costs, may have to eventually rise, offsetting earlier gains.”
In related news, Chinese mainland consumers are making Hong-Kong retailers very, very happy: “Record mainland visitor arrivals are helping to keep a feel-good factor circulating through Hong Kong. Chinese visitors offer higher-end retail outlets an easier source of demand to tap, spending on average 35% more than their American counterpart.”
China slaps a steep luxury tax on high-end fashion goods and jewelry, so many Chinese shop in Hong Kong to avoid paying the high taxes. Cathy Horyn also notes in a recent article that luxury goods are typically priced 40% higher in China than in other parts of the world (again, due to taxes and import tariffs), contributing to the spending sprees that many Chinese engage in while visiting Hong Kong and/or traveling internationally.
And as long as we’re on the subject of Cathy Horyn (the fashion critic the industry loves to hate), Cathy Horyn Doesn’t Hate Fashion, She’s Just Misunderstood: “The longtime fashion critic for The New York Times is brash and fearless and does not give short shrift to the work of critiquing fashion collections. Her intelligent, eagle-eyed commentary has gotten her banned from runway presentations the world over, and her commentary on society and culture has been read as mean and elitist. But to hear her tell it, she’s mostly just misunderstood.”
3.) So Much for that Road to Economic Recovery:
“In a trend that may be telling for the upcoming holiday shopping season, Gallup reports Lower- and Middle-Income Spending Lowest Since January ’08 . . . the September decline in lower-income and middle-income spending may reflect the sharp increase in unemployment over the same period … Further, the lagged effects of continuing high and increasing unemployment are probably yet to be fully felt . . . And lost in all of this focus on credit is the loss of hundreds of billions in interest rate income for savers. Certainly their spending has been curtailed as a result.”
Sara Murray at the Wall Street Journal also notes a sharp decrease in discretionary spending by the middle income brackets: “The middle fifth of the population sliced their average annual spending to $41,150 in 2009, the Labor Department said Tuesday in its annual spending breakdown. That was down 3.1% from 2007 and 3.5% from 2008, the steepest one-year drop since records began in 1984 . . . Average annual expenditures for people in all income groups dropped 2.8% from 2008 to 2009, the first spending decline on record. The numbers don’t account for inflation, which has been significant in some areas such as food and rent. “
Speaking of inflation: “The U.S. dollar buys less than half of what it did in 1982-1984, according to the Bureau of Labor Statistics.”
As if to underscore the inflation problem, cotton prices have jumped to a record high, meaning price increases in basic wardrobe items like jeans and t-shirts can’t be far behind, while the present stampede of panicked investors into silver and gold is causing a massive headache for the jewelry industry as prices for precious metals continue their upward spike: “One of the big problems for independent retailers is the volatile price. Items bought at different times could have different prices, or customers may return to find they now have to pay a higher price for the same item. This all causes confusion and the retailer has to either pass on the cost to the customer or decrease their margins.”
But in more positive (and kind of wacky) news, researchers have figured out how to genetically engineer silkworms to produce a hybrid of silkworm silk and spider silk. Spider silk is as strong as steel wire (with the Bark Spider producing a silk that’s more than 10 times stronger than Kevlar, a fabric used in bulletproof vests) but incredibly difficult and costly to harvest on a large scale, which is why scientists are experimenting with inserting spider-silk genes into the silkworm, a producer of copious amounts of silk.
*NOTE: It takes fourteen thousand spiders to produce an ounce of silk, and unlike silkworms, which peacefully coexist on large silk farms, spiders attack and kill one another when housed together. Not to mention the whole biting the hands that feed thing.
Large scale hybrid silk production will have uses far beyond clothing, such as industrial and construction applications, while also speeding wound-healing and repairing damaged tendons and ligaments. But biomedical aspects aside, how great would it be to have a silk shirt you can safely toss in the washing machine?
4.) A Picture Paints a Thousand Words.
5.) The UK’s High Street to See Over 20,000 Shop Closures:
“The figure includes 15,400 fashion shops, 6,300 bars and restaurants, and 1,500 furniture retailers. The expected rate of business failures is significantly higher than in the post-recession period that followed the downturn in the early 1990′s . . . Next year will see the highest rate of high-street failures over the five-year period – at 5,017 . . . The number of retailers experiencing ‘significant’ or ‘critical’ financial problems in the third quarter of 2010 was 8,751. “
The article notes crippling loads of debt and a permanently changed consumer mindset that expects discounts, bargains and value, which the article’s sub-headline dubs “the economy slowly crawling back to health”, if you can believe it.
If that’s called crawling, I’d hate to see what passes for standing still.