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.
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.
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.
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.
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?
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.
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
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.