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
Sometimes I think over-protecting a brand may not, actually,be the best thing for the brand. Consider the news, making waves at fashion week, that Saint Laurent has decided to pull all its business from Colette, the Paris super-boutique so dear to the industry, because they are mad about it selling a brand-mocking T-shirt. The big, global company slaps down the little, independent boutique. So who looks like the bully here? It makes me wonder if they really weighed the public image consequences of their action. Read more
I’m amazed that fashion, which loves to complain about fashion weeks (which start this week!), has thus far said almost nothing about changes to the New York and Paris schedules. Maybe everyone is simply in end-of-summer re-entry shock and hasn’t had time to focus? Whatever the case, and despite the constant rumblings about the need to condense the season, truth is this time around New York and Paris have pulled a fast one that should extend their “weeks” by another day. Which may not seem like a big deal, until you start adding up the costs. Read more
The other day I was at a dinner arranged by the World Gold Council that featured the usual suspects – David Lamb, MD jewellery; jewellers Pamela Love and Janis Savitt – as well as one thing that was not like the others: Olivia Bolles, aka Olivia Bee, aka an 18-year-old photographic “protégé.” She had just started shooting the new “Love Gold” campaign, aimed at cooling-up the image of the yellow metal, which apparently suffers from a grandmother-complex among Gen Z. Which raises the question, is she a one-off, or the harbinger of change to come? Read more
So instead of buying Tiffany or Burberry, as long rumoured, LVMH has snapped up Italian brand Loro Piana, known for their baby cashmere and vicuna, which take soft to a whole other level. It’s a strategic move, on many levels that go far beyond quantifiable profit, even in a world obsessed with putting a number on that amorphous thing known as “brand equity.” There are a lot of reasons why, but if I had to pick the most important, I’d settle on the following: family. Read more
After Dolce & Gabbana, after LVMH & Hermes, now we have…Kering and Nicolas Ghesquière! Yup, the French Group is suing their former designer for saying bad things about them. Is it a smart move? I wonder. And who will really come out of it the winner? Depends how you define caring, I guess. Read more
So Havas Media got back to me with the rankings of the Top 50 meaningful global brands (you may remember, no luxury brand made the top 25), and guess what? We finally see some luxury names. Even more interesting, however, is the geographic breakdown of where those luxury names appear – and the fact that all that ubiquity conventional wisdom has is bad for luxury may actually help make it meaningful to more.
Interesting move on the part of incoming Hermès CEO/family member Axel Dumas to start off his leadership with an aggressive anti-LVMH statement. Presumably the idea was to do two things in one fell swoop: herald a new sheriff in town and demonstrate his toughness (despite his relative youth, at almost-43). I wonder, though, if it’s also doing a third, perhaps less intentional – or at least, less obvious: giving Hermès , aka the ultimate in classic luxury, some street-fighter edge. And if so, is it actually good for the company’s image, or a mistake? Read more
We all know menswear is seen as a Great Luxury Hope, what with the Chinese market being driven by male consumers with money. Hence the Kering acquisition of Brioni; LVMH focusing on Berluti and buying French made-to-measure tailor Arnys to make apparel; Hermes and Coach opening mensonly shops, and so on. Now, however, it seems the on-line folks are also thinking along these lines. Yesterday MenInvest, the slightly cringe-worthy-named Paris-based e-commerce group bought the even odder named upmarket UK site Oki-ni.com, which specialises in “cutting-edge” menswear, for an undisclosed sum.
Two interesting developments today: Louis Vuitton Moët Hennessy has announced that Bulgari, less a chief executive since Michael Burke was moved to Louis Vuitton last December, finally has a new leader: Jean-Christophe Babin, who for the past 13 years has been CEO of LVMH’s watch brand Tag Heuer.
And Hermès, which has publicly battled LVMH over the latter’s purchase of Hermès shares, has released news that 2012 sales (annual results are officially due out next month) were so good – up 22.6 per cent – that they predict “for the full year, given the excellent performance in the fourth quarter, the operating margin is expected to be slightly above the all-time high achieved in 2011″. Read more
One of the more intriguing collaborations that has come my way has to be the Hermès/Comme des Garcons team-up. What, one thinks, do France’s most classic luxury brand and Japan’s most conceptual designer have in common? More than you might expect — and not just a thing for scarves, though that is what nominally brought them together.
Lew Frankfort, CEO of Coach. Getty Images
Today the Harvard Business Review has come out with a new ranking of the 100 best-performing chief executives around the world, as measured by shareholder returns and growth of market capital over their leadership tenure, and guess what? Despite all that ballyhoo about the absolutely extraordinary unprecedented growth of the luxury market, etc, etc, only three luxury CEOs actually make the list. Oops.
But who are these unmasked men? (They are all men.) Lew Frankfort, CEO of Coach, who leads the industry pack by a wide margin at number 21 – the only luxury name in the top 50 (by standard definition); Sidney Toledano of Dior, at 68; and Patrick Thomas, CEO of Hermès, who is retiring this year, who comes in at 72. Chapeau, guys. Read more
This will be my last post for 2012, barring an extraordinary luxury industry news event. However, before I don my skidoo suit, I wanted to leave you with two thoughts: one has to do with the new luxury buzzword, and the other with a new kind of luxury group.
For absolutely riveting reading, let me recommend the first ever World Handbag Report. It’s a collation of 120 million internet searches in 10 markets via four search engines (Google, Bing, Bai du, etc) by the Digital Luxury Group, and is it full of surprising facts – most notably, how incredibly imbalanced the handbag market is. The brands with big market share of search have BIG market share. The rest, well…have piddly squat. 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
The sky is falling! The sky is falling! This tends to be the reaction lately every time a luxury brand reports worse-than-expected earnings. It happened last June with Mulberry, and now it is happening with Burberry. Yet I am not convinced it’s time to call the end of luxury. Read more
Not only did Hermès report notably good Q2 revenues today – sales growth was 21.9%, certainly more positive than the gloom from Puma and Burberry – but yesterday I discovered something even more shocking: they’re outfitting an Olympic team too! Specifically, the French Equestrian team. Who knew? Read more
So Google has unveiled its disruptive hardware technology, Google glass, the smart headgear that the googlers told the FT showed the company “had a healthy disrespect for the impossible.” Maybe so. But looking at the pictures of founder Sergey Brin in the things, not to mention the naturally beauteous models they have posted on their product site looking windblown and ecstatic with their heads bisected by some sort of metallic band, I also think they have a disrespect for the importance of style that may not be healthy for sales. Read more
The assertion that exclusivity is no longer a criteria for luxury came from PPR chief Francois-Henri Pinault when he opened our luxury conference last Thursday, and I have to say, it made me sit up in my seat. Not that that was the only striking insight to come out at the end of last week. Here, in no particular order of importance, are the top five items that stayed with me the most Read more
Today is the first day of Green Week, the EU’s biggest eco-conference, and to celebrate it LVMH, the EU’s biggest luxury group (in fact, the world’s) has stepped out and announced it, too , is going green, and is going to, “encourage its more than 90,000 employees to adopt state-of-the-art environmental practices.”
Why is this significant? You ask. As far as I remember, it’s the first time I’ve heard LVMH publicly commit to green goals and assume the green mantle. “Public” being the operative word here. Read more