Luxury & Fashion Biz News: February 24th, 2012 (Raf Simons Leaves Jil Sander, Jil Sander Returns to Jil Sander, and the entire fashion industry tries to pull it together – plus, Britney Spears!)

1.) Raf Simons Leaves As Jil Sander Returns to Jil Sander Label:
“The announcement Friday came the day after the house said Belgian designer Raf Simons was moving on after a successful 6 1/2 year stint as creative director. This is Sander’s second return to her fashion house, which she left twice when it was controlled by the Prada Group because of differences over her fashion vision . . . While Simons last collection at Jil Sander previews Saturday, there is no word on where the 44-year designer will land, despite persistent media reports over the last year that he was a candidate to replace John Galliano at Dior. Dior has been without a chief designer since Galliano was fired last March over anti-Semitic remarks aimed at fellow diners during a drunken Parisian tirade.”

Despite being criticized again and again for not moving quickly enough to replace Galliano with another big fashion name so that the house of Dior could continue its power-shoulder ways at the head of the class, the patient searching on the part of Dior executives appears to have paid off, snagging Simons away from his position at Jil Sander so that he can work his bold, contemporary strokes on a global fashion house in need of a fresh perspective.

There’s been no official announcement yet by Dior, but with Simons’ abrupt departure from the Jil Sander label (as of February 28th), it would seem a done deal. It was arguably Raf Simons’ widely praised Spring 2011 collection for Jil Sander that caught the attention of Dior executives, as it showed the potential for a modern sportswear approach to couture — and with Dior as one of the last of the major haute couture houses left standing, this streamlining of the old codes could very well gain them greater visibility (and viability) within the lucrative Asian market:


“A really beautiful execution of how couture should be for a modern woman”

Regarding Jil Sander returning to her namesake Jil Sander label, Vanessa Friedman writes at the Financial Times that the news is “mind boggling” — “I find this so mind-boggling — does no one learn from history? . . . First of all, Ms Sander is 68. Second of all, she left – twice – because after she sold her brand in 1999 to Prada Group (who then sold it to a private equity group, who sold it the Japanese manufacturing company Onward Kashayama) she constantly struggled with her new bosses over the prices of materials and her own autonomy. It’s unclear why anything should be different with the current owners.”

Sander parted ways in June of 2011 with Japanese fast-fashion retailer Uniqlo, after three profitable years. This kind of design experience conceivably put Jil Sander in touch with a young, contemporary consumer base, which could be very good for the Jil Sander label as it struggles to become more than just high-end luxe.

In other words, expect to see a lower-end diffusion Sander brand announced very soon — something with a name like Jil by Jil Sander, or J by Jil Sander, and which will offer lower priced clothing and accessories for both men and women, as it’s my guess that it was exactly Sander’s experience with fast-fashion retailer Uniqlo that interested the Onward Holdings Company (the present owner of the Jil Sander brand) the most.

And while the upper end of the Jil Sander label will likely suffer from the loss of Raf Simons (as Neiman Marcus’ Ken Downing said to fashion journalist Cathy Horyn: “Ms. Sander ‘will have to exceed (Raf Simons’) creative bar’ and not what she did previously”), it’s the addition of a more consumer-friendly and affordable diffusion line under Ms. Sander’s watch that could very well be the brand’s financial salvation.

*ADDED THOUGHT: If it’s true that Raf Simons is moving to Dior, then watch for an announcement to occur around the upcoming Dior Fall 2012 Ready-to-Wear runway show in Paris next week.

*UPDATE (Feb. 25th, 2012): The latest rumor is that ex-Dior Homme designer Hedi Slimane (arguably responsible for launching the slim modern fit in menswear) will replace Stefano Pilati as chief designer for YSL: “Sources said the appointment was due to be officially announced in the coming week: Paris Fashion Week runs from February 28 to March 7 . . . Slimane, now 43, spent seven years as artistic director at Dior (Homme) before moving on in 2007, saying he wanted a chance to design for women. He is considered by his peers as one of the most gifted designers of his generation.”

*RELATED FASHION NEWS: It’s the Fall 2012 fashion week mad dash right now, with all the fashion press presently huddled in Milan (after marching through New York and London, and gathering steam for the Paris finale). New York did what it does best — wearable sportswear with high-end aspirations — and London trotted out its usual suspects of bright, bold colors and prints. Milan is presently selling sex appeal. Expect Paris to come across as classy in a wine-drinking, cigarette smoking, sex-tousled way.

Yeah, I know — they’re all just pretty much playing to their strengths anymore, but with consumer confidence hitting recession-level lows, who can blame them?

“I think it is really important that marketers not get caught up by the spectacular results that some companies are reporting and conclude that things are rosy in the luxury market across the board,” said Pam Danziger, president of Unity Marketing, Stephens, PA. “Our study shows luxury consumers are not committed to spending more on luxury goods in the next 12 months, so marketers have to work that much harder to encourage them to buy.”

*NOTE 1: Stellar profits at the Michael Kors label is an example of the “spectacular results that some companies are reporting” — with the Kors company announcing a near 50% increase in earnings over last year. Retail sales were up 83%, wholesale net sales increased by 55% and licensing revenue was up 44%, mostly on strong sales of branded watches.

*VEERING OFF TOPIC, BUT STILL AMUSING: Runway Rookie: A Dude’s Take on Fashion Week

Below is a video clip below of the Michael Kors Fall 2012 collection that showed just a few weeks ago in New York — it’s luxe and expensive and very New York, but also incredibly safe from a design standpoint. The Kors company went public on the New York stock exchange just last December, so he now has investors to please and hedge funds to satisfy — so daring and edgy is not in the cards:


Rugged, outdoorsy luxe for the investment banking crowd

And Gucci isn’t doing too badly, either, with a 19% increase in revenue for the year 2011, with leather goods accounting for a whopping 56% of total sales, while footwear accounted for 13% and apparel for only 12%. So Gucci’s decision to downplay its logo while employing a mix of higher-end materials for its leather goods, such as python and crocodile skins, appears to be working.


Gucci Fall 2012 — a decadent undertow of profit

*SIDE NOTE ABOUT WATCH SALES: But while watch sales have been a very bright spot in the retail sector for the past two years (Swiss watch exports jumped 22% in 2010, and another 19% in 2011), Swiss watchmakers are nervous of a slowdown in consumer purchasing in Asia: “Independent watchmakers are not very optimistic for the industry as a whole. ‘If you look around the world now there is a lot of insecurity everywhere,’ said Kari Voutilainen . . . ‘This market has really been China-driven, and, if there is a slowdown there, it will affect the market immediately. I would be surprised if there is an increase this year.’”

And with European markets suffering from recession fears and “oil shock” from soaring oil prices, it’s shaping up to be a tough 2012 all around.

When one pillar of the global economic foundation starts to show weakness, it puts the whole structure in danger, and present economic woes in Europe are putting even the economic powerhouse of China at risk.

Worryingly enough, China is the one and only country that can keep the game afloat at this point: “A property sector downturn and slumping global demand may knock China’s economy into a hard landing in 2012 . . . China’s manufacturing sector contracted in February for the fourth straight month as new export orders dropped sharply in the face of the euro area debt crisis.”

And companies like Lamborghini are already wringing their hands over what they perceive as a slowing Chinese economy: “Growth in the world’s second-largest economy cooled to the slowest pace in more than two years in the fourth quarter and the trade ministry described the export outlook as “grim” last week . . . Makers of supercars have come to a consensus that the segment will grow about 25 per cent in China to about 2,000 cars this year, versus a doubling in 2011.”

*SPEAKING OF SLOWER CONSUMER SPENDING: 1.) Abercrombie & Fitch announced that it will be closing another 180 stores in the U.S. by 2015, making the total of underperforming US retail locations it plans to shut down around 300; 2.) GAP Inc. reported a 40% plunge in 4th quarter profits; and 3.) traditional New York chain retailers like Target are scrambling to offer new fresh produce and food items as part of an overall strategy to lure consumers into their stores to buy something . . . anything!

“’You go into a Rite Aid or other drug store, no matter what it is, everyone is selling food,’ said Joe Granata, RLB Food Distributor’s director of produce. ‘Target’s another one selling fresh fruit and vegetables. They’ve taken on more fresh produce this year and transformed many of their stores in the Northeast. Fresh produce in these kinds of stores is a big trend.'”

I don’t know about you, but when I read that the latest “big trend” in retailing is offering fresh produce, then I start worrying about the state of the retail industry. But it’s not all bad, right?

Though lower-tier retailers like GAP, Target, Sears and JC Penney may be wobbling, the luxury league appears to be doing a bang-up job: “Saks Inc. says its fiscal fourth-quarter net income climbed 48%, buoyed by strong sales of handbags, fine jewelry and men’s and women’s clothing . . . The New York department store operator, which caters to affluent shoppers, bounced back from the recession much quicker than other retailers because the wealthy returned to spending faster than middle-income to low-income shoppers have.”

But, as pointed out above, whether the wealthy will *continue* to spend is a story that 2012 has yet to tell.

*SPEAKING OF THE GAP: The beleaguered retail chain is struggling to turn things around, with their latest weapon against the non-spender blues being the announced partnership with GQ Magazine and a slew of up-and-coming menswear designers: “The new finalists are not exactly an edgy lot, but may be able to provide fresh ideas at a time when Gap is contemplating its creative direction since parting ways with its head designer in 2011. So far, the designers have only presented ideas. ‘Mark McNairy came in with some really wacky stuff,’ Mr. Moore said. ‘They embraced him.'”


The nouveau-prep of Mark McNairy

The other designers besides Mark McNairy that the GAP will be working with include twin brothers Shimon and Ariel Ovadia of the traditional-leaning Ovadia & Sons; BLK DNM, the new jeans-focused line from designer Johan Lindeberg; Ian Velardi, a former designer for Hart Schaffner Marx; Todd Snyder, who started his label after leaving J. Crew in 2008; and Saturdays Surf NYC, a new-ish surf-inspired brand designed by Morgan Collett, Josh Rosen and Colin Tunstall.

Previous winners of the GQ Best New Menswear Designers in America award had designed products for Levi’s or Dockers that were sold at Bloomingdale’s in limited quantities. This collaboration with the GAP will be the largest showcase yet for the winners of GQ’s emerging menswear designers award.

2.) INDUSTRY QUICK HITS:

A.) Just when you thought there wasn’t a celebrity left in the world to bounce a perfume brand off of, the daughter of Bruce Lee signs a deal for a line of Bruce Lee colognes. I only wish I were kidding.

Bruce Lee’ signature fragrances launched: “Shannon Lee, daughter of legend Bruce Lee along with French company, Chkoudra Paris and the local partner Shaikh Mohd. Saeed Establishment, launched Signature Bruce Lee fragrances in Dubai . . . Speaking at the launch, Lee said, ‘I am delighted to be associated with Chkoudra Paris and launch our product across other regions. Globally we will be announcing several new initiatives, events and plans for 2012 to keep the powerful legacy of my father, Bruce Lee alive.’”

Right, because those old, outdated movie-thingies that no one ever watches (sarcasm, obviously) just can’t be trusted to keep the Bruce Lee memory alive and . . . uhm . . . kicking.

The first three fragrances in the proposed series will be titled ‘Be Water’, ‘Don’t Think, Feel’, and ‘Anger Blinds’. And no, the names don’t make sense to me, either. Of course, neither does the idea of a Bruce Lee perfume, but that’s not stopping anybody.


He’ll kick your a** if you name a cologne after him

I got it! How about “Bruce Lee’s Slow Motion Smackdown” — ? I’d buy that in a heartbeat.

B.) New Hampshire perfume wearers can relax, as the proposed ban against the wearing of perfume and scented products in government offices has been defeated in the New Hampshire House: “On Wednesday, the House voted down, without debate, a bill prohibiting state employees who interact with the public from wearing fragrance or scented products during business hours.”

Although, admittedly, the bill being voted down is probably less about the freedom to wear scented products as it is about the impossibility of enforcing such an overtly restrictive ban, as everything from hand soap, shampoos and antiperspirants to laundry detergents, hair styling products and skin moisturizers are loaded with industrial scent molecules, not to mention the cleaning solutions used in the offices themselves.

I can imagine, however, that fragrance product companies across the US are breathing at least a temporary sigh of relief, but due to the hyper-litigious US culture, I’m less than sanguine about the prospect of this battle for the public airways being anything close to over.

Ha! Did you see what I did there? Battle for the public airways? I slay myself. Really, I do.

C.) Britney Spears shells out millions of dollars to settle legal perfume dispute: “The 29-year-old singer had been accused by brand management and consultant company Brand Sense Partners of cutting them out of a deal. They claimed that they were meant to get 35% of the profits after teaming Britney up with Elizabeth Arden to front her perfume ‘Radiance’. But the company alleged that Britney and her father Jamie cut them out of the deal. According to TMZ.com, Britney has now agreed to pay Brand Sense Partners to end the lawsuit.”


Choose your own destiny — like getting tangled up in multi-million dollar lawsuits

There are ten fragrances in the Britney Spears’ perfume catalog so far, with an estimated sales revenue of $1.5 billion in only five years. Rolling Stone magazine states that this makes hers the most successful of the pop-music perfume empires.

To be fair, the ultra-successful Jennifer Lopez perfumes weren’t included in that “pop music empire” list — maybe because Jennifer Lopez is as much (or more) movie star than pop princess?

*INTERESTING FACTOIDS: According to The Daily Mail, “The liquid in the bottle represents only 3% of the total cost of producing it. The other 97% goes to marketing, packaging and advertising. And the selling price allows for a 95% profit margin. There’s a lot of money to be made in making the rest of us smell better . . . And due to the financial importance of perfume advertising, our favourite glossy magazines never print anything remotely critical.”

Which is why the rise of the blog culture has been such a boon for consumers trying to find the right skin care products, beauty aids and perfumes. Viva la blogs!

*UNNECESSARY DISCLOSURES: 1.) My Twitter/Facebook friend Amy Perfume is obsessed with Raf Simons, so every time I write anything about Raf Simons, I prepare for a blitz of intelligent, informed and highly passionate Amy Perfume response; 2.) I ordered three gorgeous wool ties from Ovadia & Sons after I discovered them through my research for this week’s post; and 3.) I’ve never once (intentionally) smelled a Britney Spears perfume, even though NYTimes scent critic Chandler Burr gave her ‘Midnight Fantasy’ perfume a 4-star review. I have a sneaking suspicion he was being post-ironic.

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