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.
I wonder what the luxury world makes of the new French initiative to protect its culture in the digital age by imposing a tax on sales of tablets, smart phones, etc? They, after all, (the luxury folks, that is) have been promoting themselves as a “cultural industry” for the last few years. I mean, the name of their pan-European lobbying group is the European Cultural and Creative Industries Alliance. In case you missed it somehow. Yet as far as I know they don’t benefit from any protectionist legislation, in France anyway.
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.
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.
Today Ledbury research is publishing their “CEO Sentiment Indicator,” an exciting document in which they chart the words of luxury execs as they reveal the thoughts of said execs about how things are shaping up for the future. They gave us an exclusive peek at it before release. And guess what? They are not feeling the love.
Honestly, I thought nothing could top the silliness of the Congressional attack on Ralph Lauren for not making all those FREE Olympic outfits in the US, despite the fact the politicians were fine with a Chinese brand sponsoring the diving team, but the mistaken furore generated by a review written by Cathy Horyn in the New York Times during the – yes – New York collections comes pretty close. I kept thinking it would go away, but instead it seems to be picking up steam — to such an extent that I am starting to wonder if it’s time to ask that perennial question: Who benefits?
Last May, Johan Rupert, Richemont’s chairman, issued what is still my favourite quote on the subject of China and luxury, the implication of which was: China is a volcano, and it’s gonna blow. But when? This is, numerous luxury brand H1 results now in, the question bedevilling analysts, investors, and the brands themselves.
Allow me to toot our own horn here for a moment, and note there’s a very interesting piece today in the FT by my colleague Stephanie Kirchgaessner on various industries and the presidential candidate they support. Romney seems to have come out on top in a bunch of them, at least as far as donations go but at least one other industry that wasn’t on the list skews very heavily BO (unfortunate initials, I know): fashion.
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?
I’ve been trying to stay out of the Ralph Lauren/Made in America Olympic controversy since it started last week, under the reasoning that It Is Ridiculous, but having yet more politicians weigh in yet again – three members of the House, both Democrats and Republicans (OMG! United by this issue) sent a letter earlier this week to the Olympic Committee asking if the paraolympic uniforms could be quickly Made in the USA – has finally convinced me that perhaps something needs to be said. Like: Stop Picking On the Fashion Guys. The only thing really clear in this situatopn is that Ralph Lauren the brand has become a fall guy of a sort.