Luxury & Fashion Biz News: Swatch gets its hands on Harry Winston, Harris Tweed fights for its rights, and Vogue Magazine doesn’t get it (again)

Swatch makes a grab for the glittering prize: After Swatch’s watch-making partnership with the storied Tiffany brand exploded last year in a confetti parade of angry lawsuits and bitter accusations, Swatch has been on the hunt for a deal that could launch them into the high-end world of diamond-encrusted watches and timepieces as precious jewellery. They appear to have found a willing quarry in the Harry Winston Diamond company, which was looking to ditch its retail operations in order to focus exclusively on the mining and production of the diamonds themselves.

Harry Winston sells jewellery arm to Swatch for $1 billion: “Swatch is paying Harry Winston US$750 million for its retail division and will also assume US$250 million in related debt. The famous name will remain with the stores — after the deal closes, Harry Winston Diamond will change its name to Dominion ­Diamond. The new Dominion Diamond will indeed focus on mining, and become one of only a few pure-play diamond companies in the world, just as supplies are set to fall and prices expected to climb.”

Aber Diamond bought the Harry Winston company in pre-recession 2006 in order to give it access to both the mining of raw diamonds and the glittering world of branded retail, but after swallowing the retail canary (and changing its name to Harry Winston Diamond), the former Aber company apparently didn’t like the aftertaste of consumer upheaval and there have been rumours circulating over the last year that they wanted out of the retail business, approaching numerous potential buyers.

Swatch, discovered sitting in the corner licking its Tiffany-inflicted wounds, was only too happy to oblige.

A video clip below that shows Harry Winston’s efforts in watchmaking as fine jewellery:

Now Swatch has a luxury name of its very own

*NOTE: The scuttlebutt is that Aber Diamond purchased the Harry Winston retail operation to gain direct access to consumer trends and desires in order to better inform their diamond mining activities, but they’re now focused on consolidating their Canadian mining operations and needed the cash flow to make that happen.

From ‘Harry Winston to Use Swatch Cash for Diamonds Purchases‘: “The margins you can generate at the mining level are better than they’ve been achieving at the retail level,” said Edward Sterck, a London-based analyst at BMO Capital Markets. As minority shareholders in Diavik in northern Canada, “they have quite good visibility of the outlook and I guess that they view it as being something that potentially would be more profitable in the near to midterm.”

And Swatch gets the glamorous Harry Winston name and reputation to do with as it sees fit, adding that sparkling tiara to its already 15% increase in watch and jewellery sales for 2012. Tiffany who?

*LUXURY IS WHERE IT’S AT News: The town of Scandicci has made itself the centre of luxury leatherworks in Italy, hosting production plants from the likes of Gucci, Chanel, Dior and Montblanc. The town boasts 2700 small-scale manufacturers employing over 20,000 workers.

Gucci town beats Italy’s economic crisis with handbags“Basically, if you’re buying a (luxury brand) handbag it’s from here,” said Giacomo Cortesi, director of the Montblanc facility. “Another student, Claudia Paci, said her parents’ small leather business was forced to shut down because of competition from cheap Chinese goods and she was now looking at upgrading her skills for the luxury sector where the market was better. ‘Luxury leather is really the way forward. This is how we can compete with China.'”

*Speaking of Italian leather goods: The Ferragamo company has announced that it will be raising prices for all its European stores in order to better fleece serve its Chinese-tourist clientele: “Chinese visitors to Europe now make up as much as 70% of European luxury goods sales as products are around a third cheaper than in China. Ferragamo’s move comes after it was reported that luxury fashion group LVMH was also planning to raise prices on items most likely to be bought by travellers, including handbags and shoes.”

I don’t know about you, but I think jacking up prices is a hell of a way to say “thank you” to the Chinese shoppers keeping these brands afloat.

And as long as we’re talking about “luxury” and keeping brands afloat, JCrew CEO Mickey Drexler blasted a CEO panel of fashion bigwigs over their lack of transparency over where their profits actually come from — that while fashion brands are busy pretending to the press that their high-priced goods are snapped up by eager shoppers, it’s actually the ugly-duckling factory outlets and discount warehouses that are responsible for a hefty chunk of their sales and profits.

JCrew’s Mickey Drexler on the elephant lurking in the luxury industry room: “The reasoning behind a reluctance from high-end retailers to disclose outlet operations is understandable — knowing you can pick up a virtually identical bag (albeit in a different colour) from a store’s dazzling Fifth Avenue flagship at a knockdown price thirty miles outside town inevitably tarnishes the gloss of exclusivity. But given they are increasingly becoming a core part of numerous brands’ business models … shouldn’t it finally become part of the conversation?”

The Factory Outlet shops — the smoke and mirrors of branded retail

*Irony Alert: Rapper A$AP Rocky complains that other rappers spoiled the Givenchy label for him: “MTV Style got up with Rocky and discussed topics that varied from his personal style, the track ‘Fashion Killa,’ trends, women’s fashion, and how other rappers spoiled Givenchy for him. Rocky is a big fan of the Riccardo Tisci-designed brand, but feels too many fellow emcees hopped on the trend without an honest appreciation, and it bothers him.”

Honestly, I don’t know whether to laugh or cry. No wonder Givenchy had to cancel their last haute couture presentation.

Fighting for their Integrity: The Harris Tweed Authority is celebrating a very successful 2012, which saw sales of genuine Harris Tweed increase to its highest level in fifteen years, thanks to a surge of interest in vintage cloth and traditional British tailoring (see: The Downton Effect: The least likely fashion trend has given London’s luxury brands a shot in the arm).

But this doesn’t mean the HTA sits around on its comfy Scottish stools all day. They recently won a five-figure legal settlement from TKMaxx over alleged trademark infringement, as no one is allowed to claim the Harris Tweed name without authorisation from the Harris Tweed Authority.

Harris Tweed is a very specific type of tweed that has been “woven by islanders at their homes in the Outer Hebrides of Scotland, finished in the Outer Hebrides, and made from pure virgin wool dyed and spun in the Outer Hebrides.”

It’s kind of like the difference between Champagne — which has to come from the region of Champagne, France — and sparkling wine, which can come from anywhere but can’t officially be labeled as Champagne. Though the Harris Tweed issue is a little more complicated than just geography, as it also means specific types of wool, dying and blending techniques, and home weaving techniques.

Here’s a video clip below which shows a small slice of life in the production of genuine Harris Tweed:

“There’s only 130 weavers in the whole world, so it’s an artisan fabric”

It’s unlikely you’ll ever find genuine Harris Tweed at a factory outlet mall.

*Aside: There are also a few other tweeds that are not as tightly controlled as the Harris, such as Donegal Tweed and Sherry Tweed, but Harris Tweed remains the most famous of the tweeds. It’s traditionally been too heavy for use in the more temperate, emerging climates, but the HTA has been working to develop lighter Harris Tweeds for the modern market.

*Speaking of fighting for integrity: Oscar de la Renta announced that he’ll be hosting disgraced Dior designer John Galliano in his studio for several weeks — and so begins the fashion industry’s public rehabilitation of one of its most controversial designers.

John Galliano Begins His Fashion Recovery: “As far as a comeback strategy, working for Mr. de la Renta in a casual capacity, practically an intern, is, in effect, a way of testing the waters. Mr. de la Renta’s business is privately owned and his reputation, despite the occasional picking of a fight with a first lady or a fashion critic, is that of a gentleman . . . Mr. de la Renta told the paper that he was not concerned about potential backlash. ‘I think John is doing all the right things,’ he said. ‘Everyone in life deserves a second chance, especially someone as talented as John. I think life is about forgiving and helping people.'”

It is, however, difficult for the fashion industry to claim the high road on . . . well, anything: Vogue’s offensive Hurricane Sandy fashion spread

We are the tasteless and the crass

The Fashion Spot delivers the coup de grâce: “Look, despite what I believe was an earnest desire on Vogue’s part to celebrate the men and women that really did put their lives at risk — men and women that are probably ready to put their lives at risk for New York City every day — this editorial is cheesy and in poor taste. The glossy couldn’t help itself, making its favourite models the real stars of this editorial and treating the very people it was ostensibly celebrating as ‘heroes’ as little more than set pieces . . . I find it sad that the magazine couldn’t run a tribute feature that truly honoured the thing it purported to be honouring by giving it space to be itself, instead of lodging it beside the same thin 18-year-old girls and pretty dresses that dominate every other page of the magazine.”

But John Galliano, y’all!


  • Victoria

    So many things to comment on this week, but that Vogue spread…I can’t believe it. Tasteless. That poor Brazilian model was mocked all over the Internet for doing the same thing! I guess Vogue couldn’t handle her being in the spotlight ;)

  • Little Red

    Thanks for the video on Harris Tweed. I had no idea there were all those rules associated with its production.

    I wonder what’s in it for de la Renta?

    • The Harris Tweed Authority was news to me, as well. Once I started reading up on it, I was fascinated with how it’s sourced and produced. I’m glad you found it interesting, too.

      I kind of wondered the same about the de la Renta + Galliano pairing. Because no one in the fashion industry does anything out of the goodness of their hearts. I think de la Renta has made so many PR missteps lately with his criticisms of Michelle Obama and launching into an attack on Cathy Horyn for calling him (rightfully) a hot-dog of the American fashion scene. that he needed to win back the good graces of the press and bloggers.

      Taking Galliano under his wing does just that — it provides a safe first step for Galliano to re-enter the fashion scene while providing a desperately-needed jolt of creative juice for the de la Renta brand; not to mention getting everyone buzzing about de la Renta again, when, really, he easily gets lost in the shuffle of bigger names like Marc Jacobs, Chanel, Saint Laurent, Dior, etc.

      So, yeah, very little altruism involved. I’m sure Galliano is fine with that, however, as it gives him a safe haven for designing again.

  • FiveoaksBouquet

    In order for that Vogue spread (which I personally don’t like) to be done, the cooperation of the authorities and all those first-line workers had to be acquired. They are also partly responsible, not just Vogue. What I fail to understand is the reasoning of those people who decided to participate. They must have thought the spread would be helpful to New York in some way–but how? The reason I don’t like it has to do with the constant juxtaposition in the media of tragedy with flippancy, making serious events seem like just another throw-away article. Too long to discuss here.

    Regardless of the subject matter or even whether I agree or disagree, I hereby take objection to the use of the word “offensive” as some kind of reason why something shouldn’t be done. There is something, probably multiple things “offensive” to everyone on this planet. The word means nothing and certainly has no moral or legal weight. IMHO it’s just a copout to avoid the effort of having to articulate one’s line of reasoning.

    • Five — Agreed, on all points. The juxtaposition of tragedy with flippancy is the largest part of what’s exasperating about the Vogue spread, coupled with the seemingly obvious attempt at provocation, because one person’s “offense” is another person’s free advertising.

      It’s like hitting a bee hive with a stick just to get a response, with the assumption that any response is better than none.

      And despite all the official cooperation, I doubt anyone involved (besides Vogue magazine) knew how trivialising and flippant the spread would actually turn out to be. The official channels most likely signed off on a feature article “to honour the heroes of the hurricane” and were later gobsmacked to find that their life-risking firefighters, stressed out Con Ed workers and round the clock medical responders were positioned as mere photographic backdrops for expensive party dresses.

      • FiveoaksBouquet

        Nathan, do you think the photos were photoshopped to show the two groups together and did not actually take place? If thats the case, shame!

        • To be frank, most of the shots look like the models were photoshopped in afterward. If you look closely, the expressions on the faces of the rest of the people involved in the pictures don’t show any awareness of the models, who seem like they’ve been plunked into the scene from another planet.

          The Con-Ed, army dock and medical worker photos being the most egregious examples of that.

          Plus, if you look at the pic of the three models in white gowns on the Coast Guard boat, they’re all too perfectly lit with their fan-blown hair and vacant model stares, plus their clothing is remarkably dry for clinging to the side of a moving boat that’s crashing through sea spray.

          So yeah, I don’t think anybody but Vogue knew that this is how the photo spread would actually turn out.

          • FiveoaksBouquet

            Thank you for analyzing those photos, Nathan. It’s hard to believe anyone could be so out of touch as to put that together.