Luxury & Fashion Biz News: March 9th, 2012 (Dior, Alexander Wang, cotton, retail sales, Diet Coke, LVMH, celebrity perfume and Spanx)

1.) Another Day, Another Dior Designer Rumor:
“The ongoing fashion week season has seen designers ranging from Haider Ackermann to Christopher Kane linked to the creative director role at Christian Dior, and the latest creator to get caught up in the rumor mill is Maxime Simoens. A report in WWD March 5 quoted industry sources as saying Paris-based fashion brand Leonard may be parting ways with its new creative director Maxime Simoens, adding that Christian Dior had been conducting talks with the 27-year-old creator, who also has his own eponymous line and only joined Leonard as creative director last October.”

Simoens is the first haute couture level name I’ve seen floated for the head job at Dior, and at only 27 years old, would fit the profile of the kind of young talent that company executives have been eager to court.

Fashionista states that Simoens “was the first designer ever to have been accepted into the French Federation of Fashion (of which the Chambre Syndicale de la Haute Couture is an entity) without having ever shown a collection” and that his design prowess and confidence of vision at such a young age has seen him compared to the late Yves Saint Laurent, who immediately took over head design duties at the label after the death of designer Christian Dior in 1957.

*NOTE 1: Saint Laurent’s first solo collection for Dior was highly praised as “meticulously made and (as) perfectly proportioned as Dior’s in the same exquisite fabrics, but their young designer made them softer, lighter and easier to wear” — which, interestingly, is similar to how Bill Gaytten’s latest Fall 2012 Dior collection was described by some members of the press.

Below is a videoclip of Maxime Simoens’ Spring 2012 haute couture collection that showed in Paris this past January:


Could this be the new Dior?

I sent a link to that video to my friend Louise, and she emailed me back saying, “I’ve never heard of this designer before, but I’m blown away. I don’t think there was a single piece I wouldn’t kill to own, and in a strange way, it seems very Dior. Actually, if you would have said to me that this is Dior, I would have totally believed you.”

Which is just the kind of statement to warm a globally competitive CEO’s heart.

Nothing further has been heard to substantiate the rumors of Simoens moving to Dior, though Simoens himself is quoted as saying: “There is nothing to comment because we are in negotiations. For the moment, nothing is happening. So when something happens, we’ll talk about it.” Which has lead people to believe that there are, in effect, serious talks going on between Simoens and Dior.

OTHER NEWS: Former menswear designer Hedi Slimane has, indeed, been hired to replace Stefano Pilati at Yves Saint Laurent. Says ABS-CBN News: “With the move to YSL, Slimane is coming full circle. He first arrived there in 1997 as head of menswear, leaving (for Dior Homme) in 2000 when it was acquired by the Italian house Gucci, which brought in its house stylist Tom Ford . . . Slimane left Dior (in 2007) saying he wanted a chance to design for women. Although he has never created a full-scale women’s collection, he produced a tiny number of super slim-shouldered men’s suits — for a select clientele of women to fight over.”

*UPDATE: For a terrific article about the decline of fashion criticism and the rise of the fashion cheerleader, check out David Graham’s “Fashion Week: The beleaguered art of fashion criticism” — “Design houses that receive unflattering reviews can be vindictive, banning the offending journalist from their shows (see: Cathy Horyn at Giorgio Armani). This is serious. Unlike movie and theatre critics, who can pay for a ticket on opening night, a fashion critic has only one chance to see a collection live. Even restaurant critics can wear a disguise and dine unnoticed . . . Thus, some fashion commentators have found it prudent to curry favour, soften their criticism and continue to receive their invitations to the shows.”

The article notes, too, that 1.) regional newspapers have withdrawn entirely from the fashion conversation as they no longer have the budgets to support it, and 2.) fashion magazine editors also pull their punches and offer little to no criticism of the global fashion houses and their star designers, as the mags need the advertising dollars to survive. “Knock a Marc Jacobs collection and the fragrance ads are summarily pulled,” Graham writes.

Which, now that he mentions it, might explain why, season after season, every single Marc Jacobs and Louis Vuitton collection is praised to the rafters, even though Jacobs’ work can often be a clunky and awkward mix of old-money luxe meets budget urban street.

2.) Alexander Wang Accused of Sweatshop Conditions in His Manhattan Factory:
“A former employee of Wang’s factory in Manhattan’s Chinatown, Wenyu Lu, has brought forward a $450 million lawsuit in which he claims staff were made to work 16-hour days without overtime in an unventilated, windowless 200-square-foot room with more than 15 other workers . . . Thirty of Lu’s co-workers have added themselves to case, with the plaintiffs demanding $50 million for each of the suit’s nine charges, including labour law violations, breach of agreement and unjust enrichment.”


Alexander Wang Fall 2012 — the collection that sweatshops built?

Sweatshop conditions at garment factories in New York have been an ongoing problem, with immigrant labor often exploited to keep “Made in the USA” clothing cost-competitive on a global level.

In 2009, the Labor Department’s Apparel Industry Task Force raided a New York sweatshop that had been making uniforms for the New York Police Department for several years, while a 2008 CNN article detailed “sweatshop conditions at a New York factory that made garments for major retailers including Macy’s and The Gap … Banana Republic, Express, Victoria’s Secret, The Limited and Coldwater Creek.”

The Alexander Wang company denies the charges. But it’s good to keep in mind that when the label on an item with a surprisingly low price reads “Made in USA” or “Made in Italy”, there’s likely a very good reason for that.

Cases in point: In 2009, American Apparel had to fire 1500 illegal workers, all of whom were employed at its downtown L.A. production facilities (hint: companies hire illegal immigrants because they usually work for less pay, no benefits and often in working conditions that are not up to standard), and the NYTimes reported in 2010 that a flood of Chinese migrant workers to the Italian garment and textile city of Prato has undermined the once unassailable “Made in Italy” label.

3.) India Bans Cotton Exports, Puts Garment Industry in Uproar:
“As the second largest producer and consumer of cotton in the world, with a world market share of about 20% and one of the largest exporters of global cotton, the International Cotton Association believes that the actions taken by India will have serious consequences and a major, detrimental impact on world cotton trade . . . “Customers in many importing countries who are counting on this cotton to run their spinning mills will suffer irreparable loss and damages.”

There are several interesting layers to this story that are worth exploring, not least of which is that China has been stockpiling cotton in a bid to keep its own garment export industry stable — and since India and China compete for garment manufacturing contracts, India’s government agencies were likely wondering why they should allow Indian farmers to sell their cotton to other countries when they can supply it (for a lower price, of course) to their own factories.

This, in turn, makes world cotton prices spike on fears of a cotton fiber shortage, which then makes it difficult for other global garment export factories (notably China, Bangladesh and Pakistan) to compete with India. Besides, if India exports the bulk of its cotton harvest, this puts pressure on its domestic garment industry as it struggles to pay higher prices for the cotton it needs.

From The International Business Times: “Industry reports say 12 million bales (of Indian cotton) have been registered for overseas shipment, well above the suggested (government) limit of 8.4 million bales, which seems to have panicked the government into the ban announced on Monday. That means, if (the sale of 12 million bales is) completed there would be a big squeeze on domestic supplies, forcing prices higher and putting the local industry at a greater disadvantage to Bangladesh and Pakistan, which have been eating into Indian domestic and exports (garment) markets.”

Yes, increased exports keeps India’s cotton farmers happy because they can sell their cotton harvests to the highest bidders on a global market, but if it simultaneously harms the ability of India’s large garment industry (which has significant government lobbying clout) to manufacture cloth and clothing at a competitive price for both domestic and international consumption, then does India benefit as a whole?

*NOTE 2: India’s garment industry has openly applauded the cotton export ban.

India’s commerce minister stated that he “would like more exports to happen, but overall economic concerns cannot be ignored. We will ensure that farmers’ interests are protected, but India as the second largest producer of cotton cannot afford to become a net importer. Under the given circumstances, (an immediate ban on cotton exports) was the only option for us.”

The ban is not a done deal, however, with India’s cotton farmers and exporters fighting to have the ban overturned. Government agencies met today to consider the issue, but did not reach a decision.

*MEANWHILE: Expect more polyester to show up in the clothing chain, while companies also explore natural fiber alternatives in the face of uncertain cotton markets: “Naturally Advanced Technologies has developed a method of making a cotton-like fabric from flax, which is cheaper and easier to grow (than cotton), and NAT’s process can even make fibers from the byproducts of other flax products like flaxseed oil. The company is still in the process of commercializing but has already signed deals with the likes of Hanesbrands and Levi Strauss.”

Naturally Advanced Technologies is also exploring industrial uses for hemp, cellulose pulp and other natural by-products.

4.) Luxury Retailers Experience Encouraging Sales Growth:
“Neiman Marcus Group’s fiscal second-quarter earnings climbed 91% as the luxury department store operator continued to see higher sales and as interest expense fell. Neiman has continued reporting stronger revenue as its wealthy customers have returned since the recession. The company is also seeing the return of the so-called aspirational customer that is trading up.”

Nordstrom also posted gains, posting a 12.5% increase in sales over the November through January period and citing a 30% growth in its e-commerce department: “Nordstrom plans to spend $140 million, or 30% of its capital expenditure budget, on e-commerce improvements this year . . . As a result, it expects to add nearly 400 employees to its e-commerce operations in Seattle.”

Saks Fifth Avenue reported a 6.6% increase in revenue for the month of February, driven by what it claimed was a strong demand for women’s clothing and handbags, as well as men’s accessories, with Macy’s announcing that a strong holiday shopping season increased its fourth quarter net income by 12%, while e-commerce sales soared by 40% at the Macy’s and Bloomingdale’s websites combined.

The Wall Street Journal reports that retail sales were up for February with warmer weather and new Spring apparel merchandise bringing shoppers to the stores: “The 18 retailers that report same-store sales, or sales at stores open more than a year, showed 6.4% growth in February, when 4.8% was expected, according to Thomson Reuters. The figure compares with 4.7% a year ago.”

Even stores that have recently been performing poorly, like America Apparel and GAP, showed positive sales increases for the month of February. Though this contrasts with sales expectations in countries like India and China, where apparel sales are slowing more than expected.

The positive story for US retail is surprising considering that India’s garment exporters have been hit by sluggish demand from US and European importers, Ontario’s minister blames the region’s anemic growth on poor demand from trading partners in US and Europe, and that for all of 2011, the US economy expanded by just 1.7%, about half the growth rate of 2010.

So no, I have no explanation for why people in the US are shopping harder, faster and stronger. Unless, of course, the higher retail sales can be pinned on increased tourism + a weakened US dollar: International tourism to the US hits record in 2011“The United States hosted a record number of international visitors in 2011, the U.S. Commerce Department announced. A record 62 million people came to the United States from other countries last year, up 4 percent from 2010 levels.”

INDUSTRY QUICK HITS:

A.) Diet Coke announces Gaultier as new “Creative Director”, replacing Karl Lagerfeld (whom I didn’t even realize was Diet Coke’s Creative Director for 2011). See the inexplicable video campaign below, which seems to be *way* more about Jean Paul Gaultier (and puppets!) than it is about Diet Coke:

and

Although, this does go a long way toward explaining why Hermes may have kicked the man to the curb . . .

B.) In an apparent effort to prove to the world that the company has no sense of irony (or humor, or even a soul), LVMH sues a Pennsylvania Law School legal group for riffing on its logo to create a poster to promote its annual symposium that deals with . . . wait for it . . . intellectual property and copyright issues: “Last week Louis Vuitton trademark counsel Michael Pantalony sent a cease and desist letter to the dean of the University of Pennsylvania Law School, demanding that Penn take down posters advertising a March 20 fashion IP symposium because the posters “misappropriated and modified” Vuitton’s trademarked monogram design.”

Here’s the “offending” logo parody:

Clever, right?

LVMH is being roundly criticized from all corners for what’s rightfully perceived as an over-reaction and an over-reach on their part, and the University of Pennsylvania is defending its modification of the LVMH logo as fair use.

On March 2, Robert Firestone, the University of Pennsylvania’s associate general counsel, wrote: “”It is artwork on a poster to supplement text, designed to evoke some of the very issues to be discussed at the conference, including the importance of intellectual property rights to fashion companies, the controversy over the proposed Innovative Design Protection and Piracy Prevention Act, and the exceptions in the law to liability for dilution, including parody.”

And just in case you’re wondering how bad things could possibly get for LVMH, take a look at this: “Perfumer Jean-Paul Guerlain lost it once more and pronounced insulting words, of a discriminatory nature, towards Eurostar employees, as well as launched in a wholesale verbal attack on France . . . ‘France is a shit country, this is a shit company and what’s more the only people who serve us these days are immigrants’ he allegedly said.

Guerlain is owned by LVMH, and Jean-Paul Guerlain is already on trial for racist comments he made in an interview in 2010.

As I’ve stated before, while I don’t agree with the kind of race-speech laws that are being used to attack Jean-Paul Guerlain, I do think these claims make him sound like kind of a d**k.

How awful for the company that his behavior makes me happy to say I don’t own any Guerlain product.

*OTHER PERFUME MADNESS: The lead singer for pop group Maroon 5 has just announced that he’s developing a set of his-n-hers perfumes: “A congratulations is due to Adam Levine for coming up with the most unique branding idea of all time. That’s right, he’s launching his very own celebrity fragrance! There will be scents for dudes and for ladies, with bottles starting at $36.”


Proof that Adam Levine will sell anything

Please, just make it stop.

*UPDATE: Since it takes about a year for a mainstream commercial perfume to be developed and put to market (longer than a year if you’re trying for something that’s any good, though I can safely predict that’s not the case here), then it would seem that Adam Levine thoroughly and unhesitatingly sold out his convictions about an hour (or less) after posting this Tweet on March 6th, 2011:

That’s an embarrassingly naked 180, wouldn’t you say?

*OTHER PERFUME NEWS: Nice article in the Financial Times about the continued development of the perfume industry in Grasse, France — Grasse: Perfume cluster permeates the globe.

Fun-filled factoids include: Grasse is no longer about growing the raw materials — “We are less and less producers of ingredients,” says Mr Bodifée. “These are often sourced in emerging countries.” — but they’re very much about staying on the forefront of the uptick in interest regarding natural materials — “Consumer enthusiasm for all things natural is attracting larger rivals to Grasse to gain access to expertise in this complex and less predictable chemistry where lore may be more useful than science.”

C.) Spanx inventor is youngest self-made female billionaire:


“Money just makes you more of who you already were”

Who knew that our Western culture “Do these jeans make me look fat?” neurosis could make a young female entrepreneur so fabulously wealthy?

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