Luxury & Fashion Biz News: Versace for H&M (plus transparency, provenance and the future of luxury brands)
Another Fast-Fashion + Designer Collaboration Hits eBay in Minutes Flat:
“Hordes of shoppers besieged H&M stores across the globe as Versace’s collection for the high street shop went on sale today . . . In Dubai and Beijing where 9am had come and gone, shoppers reported H&M stores selling out of the entire collection in under 30 minutes – with many pieces arriving on eBay moments later . . . The first shoppers through the door frantically tore clothes from shelves and rails, loading their arms with dresses, jackets and accessories while security guards counted down the minutes – in some stores, blowing a whistle to let shoppers know their (ten-minute) time slot was up.”
There are now thousands of fashion and beauty blogs on the net (not to mention YouTube video channels), with new ones sprouting up almost daily, and just like the birth of the 24-hour cable news network necessitated an explosion of buzzy, over-caffeinated headline stories just to keep people from changing the channel (“Dogs on water skis!”), all of these thousands of blogs need something to write about — so they pounce with ferocious glee on any and all trendy bits of flotsam from the great info-stream of the net.
Which boils down to two very important words for the likes of H&M, Target and Macy’s: Free. Advertising.
Go take a look at the Daily Mail article I linked above. Notice the depiction of excited crowds standing in line for hours before the stores opened, and picture after picture of smiling shoppers exiting the shops struggling under the burden of bright, logo covered bags — bags that were created just for this particular event, and just so they could be photographed and displayed in article after breathless article.
And since nothing on the internet ever dies, these breathless, photo-stuffed reports will enshrine forever the eager crush for a collection that will mostly wind up for resale on eBay, and likely be reviewed just as poorly as any its past fast-fashion + designer collaboration cousins.
And the real story behind those throngs of fashion-crazed Versace hounds just waiting to bust down the doors of H&M? Shanghaiist is stating that they’re not fans of Versace or fashion: “Reporters interviewing the crowd found that those lined up where not excited youth looking for a fall fashion change, but rather small-business owners looking to snap up the coveted Versace label at a cheap price that they can sell later at a premium in their stores.”
But it almost doesn’t matter, as the pictures and reporting make companies like Missoni and Versace seem part of some hysterical, Bieberish frenzy — crowds waiting in line! websites crashing! — and lends the fast-fashion stores playing host to these collections a reflected glow.
And all at no extra charge, beyond the fees paid to the designers and any official advertising. And I do have to say, H&M did a great job with their ads for the Versace collaboration.
Reports are that part of the Versace deal was that PR would be significantly more high-end than for previous designer collaborations (the deal “includes a higher financial commitment from H&M for advertising and promotions”), with the dedicated runway show just for the purpose of showcasing the upcoming collection, a celebrity studded party and a glitzier than usual commercial video (below) supporting that notion:
An Italian cinema nightmare of overt consumer manipulation
But while there is a sense that these high-low collaborations are entering overkill territory, PR Web notes that diffusion lines and designer collaborations are the only ways that large designer brands like Versace can stay afloat in a recessionary economy.
Diffusion Lines and Designer Collaborations Will Sustain Demand for fashion Designers: “As the value of once-elite brands diminish, designers will alter their business models, developing new product lines that are aimed at different price ranges . . . Collaborations with mass merchants like Target and H&M have been at the forefront of the market’s expansion. These retailers carry specially designed, lower-priced pieces for a limited time, capturing a younger and less wealthy demographic.”
And Reuters is reporting that the H&M deal will help Versace see increased revenues and profitability for 2012: Versace sees revenue up in 2012 on H&M and Versus
*Related: I couldn’t help but notice the peculiarly coincidental timing of the announcement that the House of Versace will rejoin the Haute Couture schedule in Paris in January, after an absence of eight years: Versace returns to Paris haute couture shows
Do you think H&M paid Versace enough money to get their haute couture division back off the ground? And does a mass-market collection in H&M debuting at the exact same time as news of Versace’s re-entry into the world of haute couture make sense? Do the two support each other (Versace – the fashion house for everyone!), or cancel each other out (Why would anyone buy haute couture from a company that’s selling at H&M!)?
But Eric Wilson writes at the New York Times that, “Perversely, selling clothes at Target has become a status symbol for up-and-coming designers”, gaining them the kind of mainstream recognition and legitimacy that they couldn’t find through fashion magazines alone.
A high-low collaboration can boost a public profile, put money in the bank and make larger, deeper-pocketed investors more willing to do business with young (Jason Wu), or not yet famous (Proenza Schouler), or even past their prime (Roberto Cavalli, Karl Lagerfeld, Versace) designers.
Jason Wu for Target — great design always starts with a paycheck
*Relevant aside: But if China’s economy — upon which everything depends — blows up, will any of this even matter?
“Fifteen different types of coffee but only one communist party”
*NOTE 1: Starting at 6:10, there’s a topic of discussion that’s particularly relevant: link to 6:10
For an insider look at the troubles looming ahead for China, see: Chinese TV Host Says Regime Nearly Bankrupt — “Larry Lang, chair professor of Finance at the Chinese University of Hong Kong, said in a lecture (that he didn’t think was being recorded) that the Chinese regime is in a serious economic crisis — on the brink of bankruptcy. In his memorable formulation: every province in China is Greece.”
*Other potential cracks in the Great Wall:
A.) WWD reported that China’s manufacturers are struggling with wage hike demands from workers: “Factory bosses say given declining orders and rising costs for not just workers, but also raw materials, the extra salaries will push some companies out of businesses.”
B.) Gloomy outlook for China exporters as factory closure wave looms: “Up to a third of Hong Kong’s 50,000 or so factories in China could downsize or shut by the end of the year as exporters get hit by cost rises and darkening global demand for Chinese goods, a major Hong Kong industrial body said on Tuesday.”
C.) Made Your Millions in China? Now It’s Time to Move Overseas: “A recent survey by the Bank of China and the Hurun Report, a wealth-monitoring project run out of Shanghai, found that more than half of the 980 millionaires (or more, accurately, those who boast at least $1.6 million in assets) polled were considering emigrating. Nearly 15% had already done so or had at least begun the process, with the United States listed as their top destination, followed by Canada and Singapore.”
D.) China’s Vice Premier Sees ‘Chronic Global Recession’: “The admission by the vice-premier simply reflects the demise of China’s export model in the face of a rapidly slowing global economy accompanied by a regime change in China that will be forced to shift its internal priorities.”
So, with all of the above, I guess it’s really not a surprise that traditionally high-end designers are seeing the writing on the wall and turning to low-end fast-fashion companies for the paychecks they need to survive.
*Corollary to selling out: For Louis Vuitton, Being Too Popular in China Is Not Good — “Our research suggests that mega rich Chinese are less likely than ever before to buy the same brands as everyone else with the same big logos to show off status . . . One wealthy man in Beijing told me, ‘Everyone can buy Louis Vuitton now, but not many can buy a Bentley.'”
And it’s becoming clear to a lot of high-end consumers that the ultimate luxury isn’t a designer brand name or a status-symbol logo, but something you have made specifically for yourself: “What could be more luxurious than commissioning something bespoke? Four painters, perfumers and designers give us an insight into the world of made-to-measure one-offs.”
*NOTE 2: I deeply appreciate and wear the bespoke fragrance that Mandy Aftel of all-natural luxury perfume brand Aftelier designed for me. It has all the materials in it that I love, no one else in the world will be able to buy anything exactly like it, and the pleasure is in the way it suits my own tastes rather than my having to adapt my tastes to what’s available on the market: Aftelier Long-Distance Bespoke Fragrance Service
I think that kind of experience can’t be underestimated. Not to mention that by supporting an independent brand like Aftelier, I’m supporting a brand owner who believes in transparency and personal interaction with the customer base.
*Re: The Importance of Transparency — The latest PR video from the IFRA (the international regulatory body for the perfume industry) is insulting on so many levels, not least because it’s so poorly made.
But the worst is when they baldly claim that refusing to be transparent with their customers about what’s in their products is a righteously motivated stance to protect themselves against copying — when anyone who knows anything about the perfume industry is fully aware that #1) Anyone can send a perfume sample to a lab and have it fully analyzed via now readily available advances in gas chromatography and mass spectrometry, and that most perfume companies already do this with all their competitors’ products; and #2.) The only reason to NOT tell your customers what’s in your products is because you’re terrified of a backlash once they can look up the ingredients themselves and discover the vast gulf between what you say you’re selling and what’s actually in the bottle.
While the rest of the fashion industry is welcoming cameras and video crews backstage and into the design and creation process, the perfume and beauty industry continues to throw itself onto the floor in a kicking, screaming tantrum over the idea of being honest with its customers.
The IFRA Resistance Video — when you don’t care enough to share
Seriously, guys, join the 21st century: Brand Transparency in a Social Media Age — “Brands can’t hide behind walls and tell us who they are. We decide who they are by how they act and the quality of their product. Our purchasing decisions will be made with more information at hand. To succeed brands will have to be open and part of the discussion so that consumers are aware of the value their brand has on issues we care about.”
Consumers want to be able to choose brands that align with their own concerns over issues of health, sustainability and the environment. They want to support brands they can know and trust vs. brands that try to hide behind carefully crafted excuses.
No wonder there’s such a strong push from consumers toward naturals in the beauty and fragrance industry: Natural & Organic Beauty Sales Reach $9 Billion — “Natural & organic products have 2% share of global personal care product sales. In some countries – such as the USA, Germany, Austria – the market share is reaching 10 percent. Widening availability is a major driver of market growth. “
Consumers feel they’re in better hands with products that have a provenance they can potentially trace and understand.
*Speaking of provenance: Jessica Quillin at Atelier 36 writes an excellent article on the importance of provenance in the fashion/luxury industry: “The idea of provenance in the context of fashion represents a movement back to the simplicity of handcrafted or locally-made goods, as well as a renewed focus on the history and origins of products and what sets them apart . . . The efficacy of fashion and luxury marketing/advertising lies in the ability of brands and designers to define who they are, what sets them apart, and who their consumers are.”
Do you hear that, perfume industry? Defining who you are is about being open with your customers regarding what your product is and how it’s made, not how many veils of secrecy you can slide between yourselves and the buying public.
*UPDATE: Daniel Ford writes for JCK Magazine (a jewelry industry resource) about Jewelry designer and blogger Wendy Brandes, who stated that “when she started her fine jewelry blog in 2007, people with luxury goods experience said that making jewelry more accessible would make it less desirable. ‘They thought people would only want brands that played ‘hard to get,’ she says. ‘I’ve found the opposite to be true.'”
Playing coy with product information doesn’t protect so much as isolate a brand from meaningful interaction with its customer base.
*Other Industry News: Tamara Mellon abruptly departs from Jimmy Choo, the label she helped found and build into a global fashion force to be reckoned with — “Sources have said that the future of the new Jimmy Choo Ltd may depend on the brand either regaining its exclusivity and placing itself firmly in the luxury end of the market, or embracing its new popularity and opening up to a new set of followers in a more accessible sector of the market.”
Recent collaborations with H&M, Hunter and Ugg may signal a more commercial, low-end direction for the future of the Jimmy Choo brand, and maybe Mellon wasn’t interested in that. It’s rumored that she’s preparing to launch her own lifestyle brand.
Because that’s exactly what we’ve all been clamoring for, apparently. A Tamara Mellon lifestyle brand. As if Jimmy Choo shoes, scarves, bags, sunglasses and perfume weren’t enough.
What is she going to offer now that she didn’t offer then, do you think? Tamara Mellon cupcake sprinkles? There are some places I just don’t need Ms. Mellon to take me, thank you very much.