Luxury & Fashion Biz News: Nov. 27, 2010 (Of Hermes, Mergers, Fast-Fashion and Black Friday)

1.) An Hermes Kelly So Large You Can Walk Around In It:
“The Hermes Kelly … gets a super-size makeover courtesy of Selfridges. The handbag, named after Grace Kelly, has been turned into a 4-meter installation displayed at the London department store as part of its Christmas toy theme . . . The Kellydoscope will offer visitors the chance to enter the giant replica and experience life as an accessory in the luxury handbag via multi-sensory video technology and special effects.”

So, I knew handbags were big . . . *rimshot*

It does sound like a pretty great promotional idea, though, and leave it to London’s flagship Selfridges store to be the ones hosting the display. If you’re in the London area, and want to see what it might be like to star in your own luxury-brand version of Land of the Giants (and who wouldn’t, right?), the interactive display runs until Tuesday, November 30th, so you only have a couple of days left!

*UPDATE: Here’s a web article with a couple of photos of the great big Kelly: Discover the Fabulous Inner Life of a GIANT Hermes Kelly

But seriously, doesn’t it seem a bit low-brow, carny barker for Hermes to be involved in something like this? “Come see the old wom’n who lives in a Handbag! Get yer tickets here!” Not that it won’t attract exactly the kind of attention they’re looking for (increased public awareness for the brand via shock & awe — you know, the usual).

While we’re on the subject of low-brow, the upcoming release of the movie Tron: Legacy (a sequel to the 1982 futuristic Disney release, Tron) has fashion designers collaborating with retailers on pop-up shops, featuring goods inspired by the retro-80’s style of the two films.


Coming to a shopping mall near you!

*NOTE 1: These new promotional vehicles could be more about the changing consumer demographic than anything else. Giles Fitzgerald writes for Just-Style that “Research suggests that consumers are crying out for engaging and interactive content and now, more than ever, it is time to develop a bold entertainment proposition . . . There has been a seismic shift in the way people shop for fashion over the last few years, and as technology continues to innovate, brands need to keep pace with trends in marketing in the same way they do hemlines.”

Which is why we’re also seeing the likes of huge projection displays on the walls of Ralph Lauren’s Madison Avenue store in NYC, and 3D glasses handed out to the attendees for Burberry’s live-streaming fashion shows.


3D is so last season — watch Ralph unfold in hi-tech 4D splendor

But back to the subject of Hermes — you know those rumblings we’ve been hearing of a hostile takeover of the Hermes company by LVMH? Well, the Hermes company isn’t about to let itself get run over by the Arnault freight-train bearing down on them, at least not without a public fight: Hermès Sticks It to LVMH by Inviting Salma Hayek to Their Paris Store Opening

Which doesn’t sound like much on its surface, until you realize that Salma Hayek is the wife of François-Henri Pinault, who’s the CEO of French luxury conglomerate PPR, the very same PPR that snatched Gucci out of the salivating jaws of LVMH just as Arnault was moving in for the kill back in 1999.

It’s said that the Gucci/PPR battle is the only battle Bernard Arnault has “lost” when it comes to getting what he wants, so the Hermes invitation to Ms. Hayek to appear as a special guest at their See And Be Seen store opening is being widely interpreted as a very public “up yours” to Mr. Arnault.

But it’s not like Arnault is smarting from the snub. A recent report by the Bain consulting company shows Louis Vuitton capturing a 46% “most wanted” brand awareness among China’s luxury consumers compared to only an 8% score for Hermes . . . though it should be noted that Hermes has opened only a fraction of the boutiques in China that Louis Vuitton has, while also spending far far less on advertising and promotion. Yet there they still are, at #8 on the “most wanted” list, and all they have to do is be Hermes.

2.): J. Crew Gets Bought Out by the Big Money Boys:
“US fashion retailer J.Crew on Tuesday announced it will be acquired for some three billion dollars by two investment firms. Investors TPG Capital and Leonard Green & Partners agreed to buy J.Crew at a value of $43.50 dollars per share, representing a 29% premium from the retailer’s average closing share price over the last month, it said in a statement.”

TGP has been an investor in J. Crew for over thirteen years, and have “maintained a close relationship with the company since becoming a stakeholder,” writes Tom Huddleston in The AmLaw Daily. The terms of the deal give J. Crew a “go shop” period of until January 15th, 2011 to find a better offer somewhere else if one is available: “Is it likely to get one? Lee Helman, managing director with investment firm Financo, is confident that someone will try and outbid Leonard Green and TPG. Companies might be afraid to be the first to do so, ‘but the company is a jewel,’ he says of J. Crew.”

*NOTE 2: J. Crew just recently announced a 4% increase in revenue for the third quarter of 2010, with direct sales (internet and phone orders) increasing 12% for the first nine months of 2010.

But not all the shareholders of J. Crew are enthusiastic about the buyout terms, and there’s already talk of a lawsuit against the J. Crew board: “Shortly after the company announced the deal, several law firms issued statements indicating they are investigating the deal on behalf of J. Crew’s shareholders . . . According to one firm that launched an investigation, Dallas-based Briscoe Law Firm, analysts have projected the true inherent value of J. Crew shares to be at least $50.00 per share. But J. Crew says the acquisition price reportedly represents an approximate 29% premium over its average closing price the month prior to the acquisition announcement.”

The class-action sharks are circling.

3.) Karl Lagerfeld Goes Fast-Fashion Slumming . . . Again:
“Karl Lagerfeld will soon unveil a fashion venture with Macy’s . . . We hear that the national retailer has inked a deal with the Karl Lagerfeld brand, owned by private equity firm Apax Partners, for an affordably priced ready-to-wear line that will range from jeans to gowns. The new line, slated to launch with a collection for fall 2011, is also expected to include a major online component, with e-commerce as a key distribution channel . . . ‘I wanted this for a long time,’ Lagerfeld told WWD in September. ‘I prefer to work in another way. I can’t compete with Chanel. I don’t want to be the poor child of myself. This has been my vision for years.'”

It was Lagerfeld who arguably initiated the fast-fashion collaboration stampede when he designed a one-off collection for H&M back in 2004, a collection that was met with street-fashion hysteria and sold out in hours. H&M was thrilled with the results, as it drove enormous traffic to their stores, and when customers couldn’t find anymore Lagerfeld items to buy, they purchased regular H&M products, instead.

Lagerfeld himself, however, wasn’t so thrilled, and vowed never to work with H&M again, stating that the decision of H&M management to produce only a limited run of the collection defeated the entire purpose of why he agreed to design for H&M in the first place: “Accusing the Swedish retailer of ‘snobbery’ for producing minimal numbers of his designs, which sold out in a matter of hours when they went on sale in 20 stores across Europe last Friday, he said it had defeated his intention of making clothes available to the thousands of people who could not afford to shop at Lagerfeld Gallery, Chanel or Fendi . . . ‘I find it embarrassing that H&M let down so many people,’ (said Lagerfeld) . . . ‘I don’t think that is very kind, especially for people in small towns and countries in eastern Europe. It is snobbery created by anti-snobbery.'”

Which is all well and good, until you keep reading the article and reach this golden nugget: “Lagerfeld was also offended by the chain’s decision to produce the clothes in larger sizes than he had envisaged. ‘What I designed was fashion for slender and slim people,’ said the designer who famously lost 42 kilograms two years ago. ‘That was the original idea.'”

So, a limited-production run is bad snobbery, but designing clothing only for skinny people is good snobbery. Whew, I’m glad we got that all straightened out.

*NOTE 3: I somehow doubt that Macy’s will heed the designer’s “slim and slender” fantasy of fashion for the masses . . . which makes me wonder if Lagerfeld has the slightest idea of what “fashion for the masses” even means. We can’t all look like Baptiste Giabiconi in a pair of short shorts, you know. Well, I mean, I guess we could, with enough money and the right team of plastic surgeons . . .

Speaking of H&M, the recently released Lanvin + H&M collection was met by wild style-blogger fanfare and hordes of eager fashion consumers camping outside the H&M stores the night before the collection hit the shelves in order to be the first through the doors, but not everyone was impressed: “I wandered into an H&M store on the afternoon of the launch, where I spied a few lurid rails of eye-popping frock horrors, of the sort to induce shamefaced laughter when viewed retrospectively in photographs. They included an explosive tomato-coloured prom dress in cheap-looking netting, and another dress resembling an acid-yellow, stiffly lopsided lampshade . . . I am sure Mr Elbaz is superb in his own realm of haute couture, in which designs created in costly materials are submitted to the attentions of expert seamstresses. Yet the longer I gazed at the H&M rails, the more strongly I felt that I was not contemplating Lanvin’s new clothes, but the Emperor’s.”


A hefty does of future shame?

4.) Favorite Black Friday Headline: Please, Santa, Let This Be the Last Christmas in America (That’s Supposed To “Save” The U.S. Economy)

Second favorite Black Friday headline? This one: Black Friday sales lead to mob like stampede

5.) INDUSTRY QUICK HITS:

A.) A Royal wedding makes for big-stakes design drama: “England is still a place of small dressmaking establishments, as it was when Princess Diana picked David and Elizabeth Emanuel to design her wedding dress and later brought attention to a largely unknown Catherine Walker. For the moment, the bookmakers Paddy Power and William Hill favor Phillipa Lepley, a Chelsea designer, to create Ms. Middleton’s dress, followed by Daniella Issa Helayel, Ms. Emanuel, and Amanda Wakeley.”

There’s some small speculation that more globally recognized British design houses — like Burberry, Vivienne Westwood or even former Londoner John Galliano — might play a part.

*NOTE 4: I’m wondering just which wedding will enthrall the public the most, the royal wedding or the sparkly vampire wedding? Stay tuned.

Oh, and about Burberry: Burberry Set To Open Largest Asia Flagship In Beijing

B.) More Misleading Advertising Mayhem: Georgia Jagger’s advert for Rimmel mascara is banned“An advert for Rimmel mascara featuring the model Georgia May Jagger has been banned by a watchdog for failing to make its use of false eyelashes clear to consumers . . . Beauty company Coty UK, trading as Rimmel London, said it used lash inserts to ensure a consistent and aesthetic look on a close-up photo shoot, not to present an exaggerated or unachievable result.”

Uhm, sure. Here’s an advertisement for our lash enhancing mascara — your mileage may vary, and just ignore that we used false lashes on the model. Kthnx.

C.) LVMH is one of 15 perfume retailers/suppliers ordered by the highest French appeals court to pay a fine for price fixing: “LVMH Moet Hennessy Louis Vuitton and L’Oreal were among 15 perfume makers and retailers ordered by France’s highest appeals court to pay a 46.2 million- euro ($62 million) price-fixing fine levied in 2006 . . . Luxury perfume makers collaborated with retailers to set a “recommended retail price” and maximum discount from 1997 to 2000, the competition regulator said. The agreements were enforced with a “pricing control system,” the regulator said in its statement announcing the original fine.”

A lower appeals court had dismissed the original fine due to “the age of evidence”, but the Cour de Cassation restored it and ordered the lower appeals court to rehear the case.

D.) Mulberry, apparently not satisfied with the dilution of its brand, tries tries again: Another Round of Mulberry for Target“Did you miss out on Mulberry for Target the first go-around? Not to worry: It’s back, and in stores November 14. Target stores across the country will have several of the most popular styles, including the black patent leather and pink leopard print.”

Or is this really just a way of heading off the counterfeiters — their best-selling Alexa bag is already knocked-off worldwide, so I suppose it only makes sense to offer their own cheap versions. Welcome to the new reality.

My new reality? I’m eagerly anticipating the hot buttered toast of Serge Lutens. My 2011 is already looking up!

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