Luxury & Fashion Biz News: LVMH snaps up the croc, Arab women are haute couture’s biggest clients, and nail polish sales continue to soar
1.) LVMH Snaps Up Top Croc-Skin Supplier:
“Paris-based LVMH, chaired by Bernard Arnault, said in a statement that it will own 51% of Heng Long (the crocodile leather supplier owned by the Koh family), while the founding Koh family will reduce its stake to 49% from its earlier 74% ownership of the Singapore-based company . . . The acquisition of Heng Long, worth around S$161 million (€92 million), will see fourth-generation family members Chon Tong Koh and Choon Heong Koh remaining managing director and executive director respectively of the business.”
LVMH put out its own press release noting that the Heng Long company is a fourth generation family business and considered one of the best tanning and finishing houses in the world for crocodile skins, so on the surface of things, this is a fairly standard move by a large luxury corporation as it attempts to gain greater control over its supply chain.
After all, LVMH made a similar move earlier this year to bring production of its outsourced perfumes back under its own control (see: LVMH “repatriates” Miss Dior ex-Chérie, Dior Homme, Fahrenheit and Kenzo Flower), and with its recent purchase of the once family-owned Bulgari company, LVMH solidified its position in the world of fine jewelry — in return, providing expertise and funds for the further expansion of the Bulgari name into watches, beauty products, handbags and branded resorts, not to mention a big push into the Chinese market.
All well and good, right? With Bernard Arnault coming across as just another savvy CEO shoring up his supply chain, kind of like Chanel buying jasmine farms in Grasse, France to ensure a continuous supply of high quality blooms for use in the production of its best-selling perfume. But then Vanessa Friedman of the Financial Times made this trenchant observation below regarding the LVMH + Heng Long deal:
LVMH secures its skins — and Hermes’ too: “Because guess who else uses a lot of (Heng Long) product? Hermes, that’s who! According to a piece in Singapore’s The Peak magazine last year, Heng Long could be the source of almost 2/3 of Hermes’s croc . . . So is the purchase of Heng Long … a sneaky way for them to gain more leverage over the brand?”
Because Bernard Arnault isn’t the kind to lose a battle with grace, and with the Hermes family recently granted approval by French courts to reorganize their family share structure to fend off a hostile takeover of the brand by LVMH, the behind the scenes maneuver to purchase a controlling stake in the biggest supplier of croc skins to the Hermes brand is more than sneaky, it’s downright Machiavellian.
As Ms. Friedman wrote: “You have to wonder what they’re saying in the Hermes storerooms.”
One would assume it sounds a lot like “Merde!”
*Speaking of big luxury houses (and specifically Chanel): Head Chanel designer Karl Lagerfeld has decided that, at least for Spring 2012, the cult of the logo is out — “I wanted also to change the typical Chanel things, the braids and the logos . . . We don’t have to do that anymore. Everybody copies them, so . . . “
Chanel Spring 2012 – coming to a copycat near you
Which is a striking comment coming from the head designer for a house with one of the most globally recognized and aspirational brand logos on the planet. That interlocking double-C is on everything, from bags to beauty products to jewelry to clothing to shoes to temporary tattoos. But Lagerfeld’s off the cuff remark reveals that, in the age of the global counterfeiter, the double-C logo has become something of a double-edged sword — what once used to be a ready signifier of quality and taste has experienced some water damage in a flood of fakes.
*NOTE 1: Though might I suggest that temporary tattoos might not have been the best reputation booster for a brand that trades on a history of creativity, quality and craftsmanship. Says Vex in the City: “Coco Chanel must be turning in her grave. Temporary stick on tats do not spell out couture to me. In fact I think they look rather tacky and will have you labelled as a fashion victim as opposed to being ‘on trend’.”
In other words, you can embrace the ink, but you can’t be all things to all people while expecting to retain any sort of exclusive cache.
And consumers are noticing: Is China’s elite looking for more “exclusive” luxury? — “Patience and good taste are now more important in determining what’s haute and what’s not. The new frenzy of buying what is not just expensive but highly exclusive is being called hyperluxury, and key players are those in search of what no one else has . . . Buyers want unparalleled craftsmanship, rare materials, and extreme personalization.”
I would also argue that we’re heading into a time when searching for the exclusive will mean more than settling for some fox fur sewn into a Louis Vuitton leather boot or an expensive designer backpack made out of the latest exotic skin — if the sudden and rapid rise of the individual fashion blogger on the internet has taught us anything, it’s that people are hungry for voices that are free of overt marketing and branding influences.
*NOTE 2: Let’s gloss over the inconvenient fact that many of these same bloggers, after they achieve a certain traffic pattern, fold themselves into the global branding machine in order to make a living off their once individual eye for style.
My partner and I have had several conversations in the past about where we think the luxury market is heading — that established and global designer brands have pretty much shot themselves in the foot with their aggressive expansion and diffusion strategies. Sure, an “elite” member of the wealthy class can shell out tens of thousands of dollars for a limited edition Bottega Veneta bag in order to stand out from the crowd, but when the same brand is also peddling pink leather key rings and $40 shower gels, how exclusive can anything with the Bottega Veneta name really be?
*NOTE 3: Ditto any name brand partnering with Target, H&M or Macy’s.
My prediction? Status and exclusivity will begin to veer away from the recognized brand name and into the discovery of independent producers and artisans, instead; because in a crowded room filled with the same old glitter encrusted designer names, it’ll be the ultimate status to score compliments with a unique item you found yourself on, say, Etsy.
I mean, really — when college girls the world over are waving logo-clad bags in a bid for attention and status, a changing metric for taste and discrimination is long overdue. Even Lagerfeld would seem to agree.
*Quelle Surprise: Consumers skeptical as Wal-Mart extends hands to artisans — “Wal-Mart will begin selling one-of-a-kind handicrafts made by female artisans in developing countries online at Walmart.com . . . Improving its corporate image may play a part, but that doesn’t diminish the Walmart Foundation’s effort to improve the economic station of women, said Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy. ‘A lot of this is a thoughtful reaction to the criticism of the corporation over the years. There are legitimate criticisms of Wal-Mart and some of its practices. But this to me seems like a positive initiative.'”
Artisan can go mainstream, but it can’t go mass-production. As long as that distinction remains firm, then I’m tickled pink by this news.
*In related news: The new exclusivity might also be driven by ethical, environmental and fair-trade concerns, as well: “What we’ve found is that luxury brands pay virtually no regard to corporate ethics and have yet to take even the first steps on reporting on the social and environmental impact of their operations.”
*Sign of the times: A $2.5 million dollar “luxury” leisure craft is given a celebratory launch in Lanzou, China. It sinks immediately.
That luxury ship has sailed
*Cause and effect?: “China is a country full of fakes,” says one Hong Kong shopper in an article about how China’s citizenry flock to Hong Kong because of burdensome sales taxes and questions of product authenticity on the mainland.
2.) Middle Eastern Women are the Biggest Clients of Haute Couture:
“Reuters reported from Paris Fashion Week that women of the Middle East, particularly the royal families, are the biggest clients of haute couture . . . ‘For us, with China, the Middle East is the market that is growing the fastest,’ Hermes CEO Patrick Thomas said to Reuters. ‘These markets for a long time preferred a more ostentatious type of luxury and now want a more refined and discreet style.'”
The author remarks that royal family weddings can involve thousands of guests, and no woman wants to be caught wearing the same dress as someone else — so they’ve increasingly turned to the world of one-of-a-kind couture to make sure that never happens.
Lebanese designer Elie Saab has a loyal Middle Eastern fan base
Reports Al Arabiya news, “The social calendar (for Arab women), which usually consists of 15-20 weddings a year and private parties every month, creates much bigger demand for couture than the occasional charity ball and high society party in Europe and in North America. And wearing the same dress twice is not an option.”
But the Middle East isn’t the only fast growing customer base. Hermes recently announced that they’ll be offering a range of 27 special edition saris for their clients in India, while the Economic Times reports that “12-15% of Alexander McQueen brand’s sales are made up of Rajasthani jackets and other India-inspired apparel. For Canali too, 15% of sales come from its India product.”
Prada even launched a limited-edition collection of garments, shoes and handbags all made in India that are supposedly meant to showcase skilled Indian craftsmanship: Prada, Made In India, and Proud of It
Yet while consumers in the Middle East, India and China are hot to trot, the West is heading into economic lockdown:
World facing worst financial crisis in history, Bank of England Governor says: “Sir Mervyn King was speaking after the decision by the Bank’s Monetary Policy Committee to put £75billion of newly created money into the economy in a desperate effort to stave off a new credit crisis and a UK recession.
Economists said the Bank’s decision to resume its quantitative easing [QE], or asset purchase programme, showed it was increasingly fearful for the economy, and predicted more such moves ahead.”
Maybe that explains the big disparity between Arab royalty in haute couture (oil prices rise!) while the British daily papers are applauding their royalty for wearing the same outfits more than once: Kate joins the royal recyclers: Duchess gives favourite coat an extra outing
Wall Street isn’t faring a whole lot better. Despite the Occupy Wall Street protests that focus on the growing wealth divide in the U.S., Wall Street Bankers See ‘No Exit’ From Financial Woes — “An era of decline and disappointment for bankers may not end for years, according to interviews with more than two dozen executives and investors . . . ‘I don’t think it’s a time to make money — this is a time to rig for survival,’ said Charles Stevenson, 64, president of hedge fund Navigator Group Inc . . . Sharply falling profits will lead to almost 10,000 financial-services job cuts in New York City by the end of 2012, according to a report released yesterday.”
*And where Wall Street goes, retail prospects generally follow: Saks Fifth Avenue announced that it will be closing its downtown Pittsburgh location due to declining sales, Elie Tahari is having to step in to save the Catherine Malandrino brand from bankruptcy, fast fashion giant Uniqlo (described as “a cheaper version of The Gap”) has planted a huge flagship store on the once hallowed luxury grounds of Manhattan’s 5th Avenue, the Liz Claiborne company — which hasn’t reported an annual profit since 2006 — sold its namesake brand to JC Penney to get out from under crippling debt, and Americans are enthusiastically embracing the DIY ethos in the face of stubborn unemployment and a stalled economy.
But hey, you know what? The biggest beneficiary of the consumer spending cutback in the West is anyone who owns a nail polish brand.
Journalist Astrid Wendlandt reports that U.S. nail polish sales rose 22% in the first six months of 2011, French nail polish sales jumped 42% in 2010, and analysts estimates “the nail market to be growing at around 20% a year, compared to just 4 to 5% growth in the make-up market and 2 to 3% growth in perfume.”
I guess this means we can expect more Justin Bieber nail polish in the future. Wait, you knew he teamed up with huge nail brand OPI last year for his own Bieber-tastic color range, right? It sold over a million bottles, of course.
“I’m really surprised that I kind of like these nail polishes”
Because it’s Justin Bieber’s world. We all just live in it.
There’s a lesson to be learned from this somewhere, I know it.