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.”
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!