Monthly Archives: October 2012

Today PVH, the large US conglomerate that owns Calvin Klein, Tommy Hilfiger, and Izod (among others) announced it was acquiring Waranco, the large US lingerie manufacturer that makes Calvin Klein undies and jeans, among others, in a deal valued at $2.9 billion.
The acquisition was approved by both boards, and will officially make PVH one of the mega-corps, with revenues of about $8 billion. As important, however, is the fact that by buying Warnaco, PVH is also buying Calvin Klein’s two biggest product categories, which had been licensed to the manufacturer since the late 1990s.
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There’s an interesting little nugget in today’s Hugo Boss Q3 results: part of the reason for the 14% fall in net profit of the German powerhouse was due to “the switch to four equally sized collections a year,” according to chief executive Claus-Dietrich Lahrs. Yes they also talked about the slowdown in China, but they didn’t seem that bothered by it, and this seemed more significant. It made me think, once again, about the gap between the fashion show system and the shopping system – and wonder if the current financial system is not, after all, responsible for the gulf. Not because it demands constant growth (though that’s part of it), but because it gets people thinking in quarters as opposed to halves.

The conversion had associated manufacturing and delivery costs, and, of course, they had to educate the consumer about the fact there was new stuff in store. Of course, in the long run this should actually up revenues in all quarters. As Mr Lahrs said, the idea is to “incentivize customers to visit their shops regularly.” And he and his gang expect winter collection sales to be up.

It did make me think, once again, about the gap between the fashion show system and the shopping system – and wonder if the current financial system is not, after all, responsible for the gulf. We tend to see it as a creeping moral corruption, but maybe it’s simply straightforward numerical congruency: if you are reporting four times a year, it makes sense to have four collections to report on.

Granted, this is extrapolation, because not every brand is public. However, it seems to me that since most of the big, industry-driving brands are listed, it’s only logical to assume their behaviour will influence everyone’s behaviour.

Indeed, I wonder if it’s this development that is really behind the all-deliveries-all-the-time situation we are in, as opposed to the fact that everyone can see stuff on-line as soon as it is shown, that early adopters all demand the ability to buy winter coats in July, and shopping has turned into a social activity.

Maybe, instead of blaming culture and shameless marketers for our transformation into serial shoppers, we should look to the need for quarterly reports to explain the evolution from the two-show system to the four-collection cycle. It’s not nearly as sexy or morally provocative to discuss financial reporting as consumption, but – well, Occam’s razor, and all that.

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Lo, the Ron Johnson changes at JCP continue apace! Apple’s ex-retail guru has been notoriously overhauling the US high street megalith, to not exactly stunning sales results, but as his latest, and truly out-of-the-box move shows, he’s not backing off his radical revamp plans any time soon. This time round he’s decided JCP needs to join the high/low collaboration queue – you know, the H&M and Maison Martin Margiela, Target and Prabal Gurung, and so forth trend – and for his brand’s first foray, he has chosen to hook up with…wait for it…Duro Olowu. Who? Read more

It began a few weeks ago: I received a 215-page coffee-table book from Race Point Publishing entitled Alexander McQueen: Evolution. Then, only days later, from Abrams, came an even bigger (395 pages) tome, also about McQueen, called Love Looks Not With the Eyes. The third arrival was a smaller – normal hardback-sized – offering from Harper Design, called, simply, McQueen.

Three Alexander McQueen books in less than one month, a full 32 months after the designer – known as fashion’s enfant terrible, its genius, its terrorist and the designer every design student wants to be – killed himself at age 40? That’s one too many for coincidence, and too random a timeline for an anniversary. It’s the sort of thing that sets off all sorts of bells in my head, because it qualifies, according to the laws of fashion, as a trend. And then, like Pavlov’s dogs, I feel an instinctive need to ask: why?

Good golly Miss Molly: there’s a whole new untapped consumer segment out there itching to spend money. Such is the basis, anyway, for a new web site launching next month directed specifically at these “recession-busting” individuals. Check ‘em out! Read more

There’s a really interesting study out today from the Digital Luxury Group. Based on data from over 31 million searches on Google, Bing, Yandex and Bai du, as conducted in Brazil, China, France, Germany, India, Italy, Japan, Russia, the UK and US, it looked at which American luxury brands were the most popular globally (based on search, natch, not sales). The results would probably surprise you, especially when it comes to who’s on top, and emerging markets. Read more

Last night at a very glamourous Versace dinner (where I nevertheless managed to cover myself in shame by chatting briefly to – and not recognising – Lady Gaga, then asking the man next to me who the cute woman in the big fur (Chanel) hat was), which followed the Versace Soho store opening, I got to talking with chief exec Gian Giacomo Ferraris, who let loose some interesting stuff. Read more

And so now we know: Jessica Biel wed Justin Timberlake in pink Giambattista Valli, while the groom wore Tom Ford. OMG! OMG! I can barely contain myself. Actually, the thing that I can barely contain is some information I learned while discussing celebrity weddings in general with a publicist for a big brand who will remain nameless: all those couture dresses made just for the celebs special day? They are almost never paid for.  Read more

And so Mulberry joins that club no brand wants to be in: “luxury” brands that are experiencing surprising drops in demands and sales. Today they sent out a profit warning noting that due to a drop in wholesale revenues they “expect full year profits to be below last year.” Coming on the heels of Burberry’s profit warning last September, this is sure to send more luxury Chicken Littles scurrying through the streets crying that the sky is falling. This is wrong. It does not signal the end of luxury. It signals, rather, the end of the idea that consumers are suckers who will accept that anything is “luxury” that says it is so, and the rationalisation of the market.  Read more

If anyone is in doubt about how President Obama will look tonight, during the last debate of this increasingly close election, here’s a clue, courtesy of Michael Lewis’s Vanity Fair profile. Read more

Two men: both in dark suits, white shirts, little flag pins; one in red tie, one in blue tie.

One week later: same men, dark suits, white shirts, little flag pins; one in red tie, one in blue tie. Read more

Much heart-fluttering in recent days over the rumours that the luxury arm of diamond specialist Harry Winston may be snapped up by either PPR or LVMH. Oooooh! M&A action in the luxury sphere. It’s so hard to resist. Perhaps that why Winston actually issued an official “Nothing doing” statement – albeit with a bit of a sideways wink at possible suitors. It’s lips are saying no, but its eyes….
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I greeted my colleague Richard Waters’s column today on the new mini Ipad – Apple’s equivalent of a mini-clutch – with a roll of the eyes. Not because it demonstrates yet another way in which the tech giant is mimicking the fashion world (by filling out their accessory offering), but because a recent experience has me thinking that maybe Apple has not learned its fashion/luxury lesson as well as this might suggest. Read more

Yesterday Chanel (the Group, not the brand) announced it would acquire Barrie knitwear, a Scottish cashmere producer whose parent company, Dawson International, went into administration last August due to “a large hole in their pension fund”. This is turning into something of a strategic signature for Chanel. Though Barrie is not part of their “Metiers d’Art” group of nine specialist ateliers bought by their Paraffection affiliate, is it fully in line with what seems to be a Group policy regarding buying up and protecting heritage skills, be it glove-making, embroidery, or knitting.  Read more

Whoops. Last night both Michelle Obama and Ann Romney wore matching hot pink ensembles to watch their hubbies, in similarly matching dark suit-white-shirt-little flag-pin ensembles – verbally duke it out at Hofstra University. Given how close this election seems to be, both though it was probably time for a bold statement, reaching out to women, attracting the “soft” vote, showing awareness of healthcare issues, etc. It’s just unfortunate they chose the same statement. Read more

After all that red sole hoo-ha plus the related (and philosophically
interesting) arguments over whether it was possible to trademark a colour
(no; but it seems you can trademark a specific use of a specific colour),
Yves Saint Laurent has decided to drop their remaining court cases, and
Christan Louboutin has decided to embrace the decision. However, despite
their detente, they are still claiming victory in the case. Read more

For anyone still chortling over the end of the It bag – the laugh’s on you, if the folks at LVMH (who know their accessories), are to be believed. On the Q3 results conference call today both spokesperson Chris Hollis and CFO Jean-Jacques Guinoy specifically referred to handbags as engines of growth for not one but three—count ‘em! – of their brands. Read more

Earlier today I wrote about the odd idea that came to me after reading Bain’s 11th Luxury Goods Market report, but now I’d like to simply list a few more notable — and surprising — conclusions from that exciting document, including facts on outlet shopping, Gen Z, and a new Chinese consumer segment. Read more

Today Bain released its 11th annual Luxury Goods worldwide Market Study, projecting that the luxury market growth will slow to about 10% a year, and then perhaps 4-6% for the next two years, and that all the slack won’t be picked up by China, which is also slowing. When Burberry first noted this trend, the reaction was largely “shock, horror!”, and their stock dropped 20%. However, I wonder if long-term this slowdown might not actually be a useful thing.
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The other day I was moderating a panel at a conference called Fashion Digital New York, which was pretty much about what you would expect, though what I learned was not at all what I expected – especially when it came to what the new etail folks thought about old media. You’ll never guess what they said! Read more