Luxury goods

There’s an interesting report in the FT today about declining sales of China’s local-brand cars, and it’s got me thinking about the benefits and problems of “national” brands – which is to say, not state-owned brands, but rather the perceptions surrounding the name of a country, ie its own brand, when attached to product, and the way this can work for and against manufacturers. Blame it on the Made in Italy and Made in France strategy the luxury industry so cannily implemented back in the day (a recent BCG/Altagamma/Sanford Bernstein Global Consumer Insight study found a whopping 80% of consumers think “Made in is key”) but seems to me, when it comes to consumers, products don’t just have to be good, they have to somehow come to grips with national stereotype, and either neuter it or exploit it. But what they can’t do is ignore it. Read more

This Sunday is the Oscars, which as we all know is the be-all and end-all of red carpet dressing, and may explain the notable lack of Hollywood celebrities at Paris Fashion Week thus far: they’re all back in Hollywood, juicing in order to get their stomachs flat. Or, in fact – and here’s what I am thinking – there may be something else going on. Something that has to do with changing markets, and marketing. Read more

Today the FT is reporting that Blackstone is the clear leader in the race for the Versace minority stake – which is surprising on the surface, given that the private equity firm has never made any forays into high fashion, and private equity as a sector has had mixed results in the sector, sic Permira and Valentino, and TPG and Bally. So why the mutual attraction? I was speculating with a colleague recently, and she mentioned what is probably the magic word: hotels. Aka the Next Big Brand extension of luxury. Read more

Today is travel day, as the fashion flock leaves Milan and heads to Paris, the last leg of the four-week marathon that is the womenswear collections, and often the week one that produces the most highs and lows and sheer spectacle. So what are we looking forward to? Four major debuts are taking place this week – more new names at old houses than in any other city. Here are the big ones to watch: Read more

LVMH has confirmed it has taken a minority stake in Young Italian Designer (we will not acronym that for obvious reasons) Marco de Vincenzo, making him the second such up-and-comer to receive such investment from the luxury behemoth, and underscoring the increasing competition among the established groups to identify, and potentially own, new talent. The terms of the deal were not disclosed, but there’s no question, it’s putting its money where its mouth is. At least some money. Read more

It yet another indication that high end fashion brands see growth opportunity in charging ever-further upmarket, today Ralph Lauren (that’s their most recent show, left) named Valerie Hermann, latterly CEO of Reed Krakoff, as President of a newly created Luxury Division. This follows announcements by Louis Vuitton and Gucci that they see their future on the tippy-top of the luxury pyramid. At the same time, the move puts the Ralph Lauren strategy at odds with that of his fellow American “premium brand,” Michael Kors, whose phenomenal growth has been driven in large part by exploiting the price-point opening left when peers deserted the high end for the highest end. It suggest Mr Lauren is going after European competitors, as opposed to Mr Kors. Read more

OK, giant luxury conglomerates: time to think even more broadly about brand extensions. According to a new report from Boston Consulting Group, the luxury experiences market is now worth a whopping $980 billion (luxury experiences being defined as cars, art, home, tech, dining, hotels, travel, spas, yachting, etc.). Aka almost $1 trillion. By comparison, the personal luxury goods market is a piddling $390b. Now, where would YOU put your investment? Read more

All that stuff we’ve been hearing about the Chinese market moving toward the exclusive, the subtle, and the non-logo? It’s happening in beauty too. The other day I was chatting to Christophe Robin, the Paris hair colourist, and he mentioned that his line of products had really taken off in China. They’re called “Christophe Robin.” Heard of them? No? Well, that’s the point. “Last year sales were up 53%, and this year we think it will be 70%,” he said. Given that Bain reported luxury market growth of about 2.5% in China last year, that’s saying something. Read more

Bet corridors were buzzing over at Hermès yesterday when LVMH announced Francesco Trapani, the executive who engineered the sale of Bulgari to the French Group and was then elevated to head of LVMH’s Watch & Jewellery division, the better to ease the family firm’s incorporation into the LVMH fold, was stepping aside. He is to become a “senior advisor” to LVMH Chairman Bernard Arnault, and keep his seat on the board. LVMH didn’t say much about the move, other than to suggest the decision had been Mr Trapani’s, and that it was prompted by Bulgari’s successful integration – ie, his operational job was done. In the press release, though there was a quote from M Arnault about Mr Trapani’s contribution, Mr Trapani himself did not say anything at all, which was a little weird. Read more

Just after Burberry’s nice third quarter results prompted a rash of headlines (including in this paper) about positive returns “easing [the industry’s] China slowdown fears,” especially when combined with similar happy stories from Swatch and Tiffany, today we came down to earth with a bump courtesy of Richemont. In their third quarter trading statement, things looked not so rosy in China. In fact, they looked pretty doldrum-like. Read more