Luxury & Fashion Biz News: February 10th, 2012 (Brands try to affordably navigate New York Fashion Week, Karl Lagerfeld’s Big Mouth gets Chanel in hot water, and the troubled Halston brand Gives It Another Try)

1.) The Cost of Runway Shows has Brands Looking for Other Options:
“‘Catwalk shows cost a lot,” says Rosie Vogel, Vogue’s fashion bookings editor, who produces London shows . . . ‘A venue might cost £30,000 or £40,000; production costs will be tens of thousands. Then there’s the set, £400 to £500 hundred pounds per model and they’ll need fifteen of them. You might be able to get hair and make-up sponsored by someone like MAC, but you need to pay assistants. So you need sponsors’ . . . But there are reasons other than cost that might mean they opt out of the traditional format … Catwalks in an internet age are almost an invitation for copycatting.”

And the time lag between runway shows and the items actually reaching stores creates an unintended consumer fatigue — having been inundated with stories, videos, photos, interviews and backstage features during and after the actual fashion week shows, the initial excitement turns into an “already been there and seen it before” boredom by the time the collections are available for purchase, which is only exacerbated by the previously mentioned Fast Fashion copycats that rush knockoff runway styles into production months before the actual designer brands can (or do).

New York Fashion Week for womenswear (Fall 2012) is just kicking off nine jam-packed days of shows (over three hundred presentations), so this discussion is particularly relevant for designers as they decide whether to follow the traditional runway format or opt for connecting to consumers through their own websites, partnerships with influential bloggers, live-streaming hosts and more.


The Jason Wu runway, one of the first NY Fashion Week shows for Fall of 2012

The instant accessibility of images and reporting that now characterizes the global fashion weeks has elevated their status from industry-insider to globally hyped, with coverage finding its way to increasingly viable emerging markets (like India and China). More and more brands are scheduling shows to take advantage of this increased media visibility, such as Levi Strauss, which will be hosting a runway show at New York Fashion Week this season for the very first time, highlighting their core Red Tab, Vintage Clothing and Made & Crafted lines.

The Wall Street Journal writes: “This season will be marked by enthusiasm for reaching consumers overseas, particularly the Chinese, who are proving to be prodigious buyers of fashion and increasingly interested in US brands. Japanese store buyers are also on the rise, according to several US labels . . . As a result of this consumer attention, new brands will be in New York that have never before held runway shows.”

*SPEAKING OF LEVI STRAUSS: The company saw an overall 12% drop in profits for 2011 due to excess inventory and a surge in cotton prices, with its 4th quarter results particularly bad, revealing a 49% decline in profit compared to the same quarter of 2010: “Wary customers concerned about the economy meant the company resorted to getting rid of excess inventory in the fourth quarter through discount outlets. ‘We did move a substantial amount of inventory through the discount channels,’ CFO Jorgensen said. More merchandise is expected to be flushed through discount channels until the end of the first quarter, the officer added.”

The Levi Strauss company also recently announced that it will cease purchasing fibers from companies suspected of illegal logging, and increase its use of recycled materials, materials processed without chlorine and materials from companies certified by the Forest Stewardship Council (FSC).

The Levi Strauss eco-conversion is another in the list of Western consumer brands striving to tap into the awareness among consumers that, even though they want to keep spending, there might better, more informed ways of going about it:


“Everybody’s affected, including the rich”

The Euromonitor Global Market Research Blog states, for 2012, that #1) “Although many consumers can’t afford to buy green, they expect brands to be trailblazers and to clean up their act! Brands like Patagonia are taking back used products for rewards, and recycling will shine” and #2) “Less will be more in 2012. Companies will be helping their customers to consume less of their products.”

The latter point is where luxury brands have the edge — fewer sales but at higher price points is where they can truly shine.

2.) Halston Gives It Another Try, Dumps Piles of Cash Into New Revival:
“Halston is plotting yet another return to the runway after the majority of its creative team and investors left the label last year . . . Halston CEO (and former BCBG Max Azria president) Ben Malka … has injected $20 million into the struggling label to keep it going. ‘We are very well-funded, so I don’t have to worry about that. The money was put in by myself and my partners in a big way,’ he told WWD. ‘The amount is enough for us to screw up for a long time.’”

Marie Mazelis, former creative director of the Hervé Léger and Max Azria lines, left BCBG to work with Malka at Halston, and the company is showing their lower-priced Halston Heritage line this week at New York Fashion Week. The higher priced Halston label isn’t scheduled to show on the runways until 2013.

Malka talked to WWD (Women’s Wear Daily) about the yet-another revival of the Halston brand (which collapsed spectacularly last year after film executive Harvey Weinstein, former Jimmy Choo founder Tamara Mellon, actress Sarah Jessica Parker and designer Marios Schwab failed to bring the label to anything resembling profitability), and while he spoke extensively about funding, marketing and distribution, he made next to no mention of the design vision for Halston beyond the brand’s already existing archives.

Below is a video clip of the Fall 2011 Halston collection. It was shown in a small, cost-efficient, non-runway setting and was the last collection Marios Schwab designed for the brand before he was dismissed and the company went into reorganization:


“It’s so Halston and so disco, don’t you think?”

Wait, did he say he designed glow in the dark disco dresses? For 2011? No wonder the brand collapsed.

*VERY MUCH NOT COLLAPSING: Italian cashmere brand Brunello Cucinelli is doing so well that they’re filing for an IPO (initial public offering) on the Italian stock exchange to raise significant funds for global expansion: “Brunello Cucinelli, the high-end Italian cashmere apparel brand, has filed a request with stock regulators in Milan to list one-third of the company’s stocks through an initial public offering (IPO) . . . Mr. Brunello Cucinelli, the founder of the brand, said the company’s listing would provide it with greater financial stability and boost its business. He added that the listing would also help the company raise its visibility and attract employees with global exposure, needed to increase the company’s business in foreign countries.”

The 25 year old company reported a 67% growth in profits for the year 2011, and the Financial Times reported back in September of 2011 that the Cucinelli brand was looking to expand into Asia and Brazil, while also diversifying into perfumes and watches for a more complete brand offering.


“He gave business casual a polished image”

*UPDATE: Brands like Louis Vuitton, Roberto Cavalli, Bottega Veneta and Brunello Cucinelli expand into watches and perfumes because watch sales are soaring in Asia and perfumes are a simple, low-cost means of keeping sales in-house. A luxury fashion brand’s clients are already buying watches and perfume, so why let them walk out the door to purchase the items from someone else?

3.) Say Goodbye to the Blingy Birkin:
“The Hermès Évelyne, which features a canvas strap and perforated “H” logo and costs $2,575 and up, is surging in popularity . . . Named for Évelyne Bertrand, then the head of Hermès’s riding department, the bag was designed in 1978 to carry grooming equipment (a brush, comb and other stable necessities) and was sold in stores alongside other equestrian goods, where the bag was still relegated up until recent years . . . ‘It’s chic, it’s durable and it’s easy to carry,’ (publicist Di Petroff) Butensky said of the Évelyne. Plus, ‘You’re not going to offend anyone . . . Or as Christene Barberich, editor in chief of Refinery29, a Web site focused on fashion and personal style, put it, ‘In this economic climate, you don’t want to be all blinged out.’”

Or maybe once every less-than-rarefied realty-TV star and pop princess within a 20-foot radius started carrying a flashy Birkin, something else was bound take its place.

*AS LONG AS WE’RE TALKING ABOUT HERMES: Last week, Hermes reported an 18% rise in sales for 2011, while previously announcing a near 10% price hike for many of their accessories due to the increasing cost of raw materials like silk, cashmere and crocodile skin: “The price hikes have already kick-started in Europe and parts of Asia, and will gradually move to the Americas, by the end of January 2012.”

Higher prices *and* higher profits? You see, I think there really is something to that predicted eco-trend of brands getting their customers to buy less of their products.

*RELATED NEWS: Red Luxury reports that Hermes ranks #3 on the list of Top Ten brands that China’s wealthy consumers prefer to give as gifts, while hitting the #2 spot on the list of World’s Most Valuable Luxury Brands for 2012.

*LET’S KEEP TALKING ABOUT HERMES: Shang Xia, the Chinese artisan brand founded by French luxury brand Hermes, is set to open a boutique in Paris“The Shang Xia boutique is to neighbor the Hermes Paris flagship store . . . Collections of Shang Xia include clothes, jewelry and apparel, tea ware and furniture, which are all produced with China’s natural materials, such as cotton, cashmere, jade, red wood and bamboo. Jiang said earlier that Shang Xia is 100 percent Chinese-made while also an international brand.”

4.) Karl Lagerfeld’s Big Mouth Gets Chanel Into Trouble:
“During a stint as guest editor of the Metro newspaper in Paris, Lagerfeld described Adele, the ‘Someone Like You’ singer, as being “a little too fat” for his liking, but he did concede that she had a “beautiful face” and a good voice, but fans were outraged. Curves and Chaos, an LA-based blog for bigger women, wrote: ‘Are you freaking kidding me? We’re done with him and Chanel as long as he’s involved with them’ . . . While US PR guru Kelly Cutrone added: ‘If you love Adele then boycott Chanel.’”

What makes this particular situation so interesting is that Lagerfeld is famous for provocative statements to the press that are designed for mere shock value and to get people talking about him and about Chanel. And he’s *never* apologized in the past for anything that he’s said, no matter how absurd or odious.

But the public backlash against his comment regarding Adele’s weight was so swift and powerful, threatening to drag the Chanel brand right down with him, that the designer was forced to capitulate to the pressure and issue an apology, which is presently being described as “half-hearted” and “hollow”, so I’m not certain the brouhaha is over yet.

Back when John Galliano disgraced himself and ended his career with Dior over his “I love Hitler!” video clip, Lagerfeld was quick to point out the damage a head-designer’s thoughtless remarks can wreak upon a brand. Said Lagerfeld: “The thing is, we are a business world where, especially today, with the Internet, one has to be more careful than ever, especially if you are a publicly known person.”

So while Lagerfeld calling Adele “too fat” is not anywhere near the Galliano low of praising Hitler for gassing the Jews, it wasn’t particularly bright of Lagerfeld, the public representative of a huge global brand, to diss the physical appearance of a young entertainer with millions of very loyal (and globally dispersed) fans.

Chanel may throw celebrity-studded glitzy parties and host sparkly haute couture runway shows to project a glamorous image for its brand, but it absolutely depends upon sales of its more affordable nail polish, lipsticks and perfumes to remain profitable and competitive — so when well-known American fashion publicist Kelly Cutrone called for a Chanel boycott among Adele fans (the very group that Chanel target-markets for its nail polish, lipstick and perfume), that was likely the exact moment Lagerfeld’s cellphone rang with the request that he beat a fast path to the media to make amends.


Lagerfeld gets in some deep sh*t for his comments about singer Adele

*RELEVANT ASIDE: Lagerfeld fully approved of Amy Winehouse, who was, I guess, skinny enough for his personal taste — which would seem to prove a genuine fashion-industry basis for the term heroin-chic, after all?

*EVEN MORE RELEVANT ASIDE: Maybe it’s exactly this kind of Lagerfeldian speak-before-you-think attitude that caused fashion journalist Robin Givhan to write that the 78 year old designer may be, finally, overrated.

5.) INDUSTRY QUICK HITS:

A.) Right on cue with the hedge-fund invasion of the entire fashion world, jewelry designer Alexis Bittar enters into a partnership with private equity firm TSG Consumer Partners, who have invested in the past with brands like Smashbox, e.l.f. cosmetics, Perricone MD, Pureology, Smart Balance, vitamin water and MuscleMilk.

Not a week after this news was announced, a lively, high-profile Alexis Bittar advertising campaign featuring AbFab stars Jennifer Saunders and Joanna Lumley was unveiled:


The advertising campaign that investment banking built

For an insight into how investment banking has permanently (and arguably negatively) impacted the worlds of high art, fashion and cuisine, read “Is Modern Finance Ruining Modern Art?” by Mark Taylor.

B.) While PETA and anti-fur groups decry the resurgence of fur on fashion runways, both the US and New Zealand have furry pest problems the fashion industry could help solve — ditch the fox and mink and embrace the Louisiana nutria and the New Zealand Brushtail Possum!

Both are pests that destroy prized and protected habitat while displacing native species, and government agencies spend millions of taxpayer dollars every year in the attempt to control the spread of both species — species which possess, I might add, incredibly beautiful, soft, snuggly fur.

From the article Guilt-Free Fur?: “Nutria has been quiet in the past few years,” Kaplan said, but it is on the rise in fits and starts: “Last season, Oscar de la Renta did a nutria vest.” Michael Kors has used sheared nutria to line raincoats, which is a perfect application. “It’s a durable, dense fur that is traditionally used as trims or in linings. It can have a rich, rugged look.”

New Zealand entrepreneurs have woven the Brushtail Possum fibers with soft merino wool to create what they call Merino Mink.

C.) Because of course you want to smell like baseball, hot dogs and apple pie: New Yankees fragrance strikes nostrils this month“ESPN New York was first to report that the Bronx Bombers will debut two official fragrances — called “New York Yankees” and “New York Yankees for Her” — later this month. In the past, all that Yankees fans could hope to do was dress in the caps and jerseys of their favorite ballplayers. Soon, they’ll be able to smell like ‘em too.”

Fragrance writer Marie Helene Wagner notes that this is perfectly timed to the Obama Administration’s push for greater tourism to the US. She writes: “Any perfume with a place name on its bottle is susceptible to becoming a prized souvenir in that context.”

D.) Perfumer Jean-Paul Guerlain appears in French court on charges of racism: “Mr Guerlain, now retired, caused offense during a TV interview in October 2010 in which he was asked to explain how he created the Samsara perfume. ‘For once, I set to work like a ——. I don’t know if ——- have always worked so hard, but anyway …’ he said. Thursday (February 9th, 2012), the 75-year-old apologized profusely as he appeared in court in Paris on charges of casting ‘racist insults’. He faces up to six months in prison and a 22,500 euro (£19,900) fine.”

The court delayed ruling on the charges right away, and scheduled a final judgement ruling for March 29th.

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