Tuesday, 30 November 2010

Hermes Moves to Counteract LVMH Takeover 30/11/10

Following up on the Hermes/LVMH debacle, the most recent news from Bloomberg is that Hermes has called a ‘round table’ with the Dumas family to develop a strategy to tackle the large, and not so quiet, monogrammed elephant in the room. For those of you just tuning in, the MO Down has been following LVMH’s sudden acquisition of Hermes shares, amounting to 17 per cent. The surprise revelation a few weeks ago has sparked rumours of a hostile takeover, and led to speculation that a third party may be needed to keep Hermes in the family.

It seems the most recent options include a shareholder pact or the creation of a non-listed holding, company grouping together to protect the descendants’ shares. Recently, the MO Down suggested that luxury conglomerate Richemont might come to the party. Reuters suggests that other institutional friends such as BNP Paribas Bank, and Bank of America Merrill Lynch might help out… At times like this, Hermes needs its friends, so it will be interesting to see if someone, and if so, who, can save the day…

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Monday, 29 November 2010

Cartier Opens Hong Kong Flagship as Fine Jewellery Looks to Asia... 29/11/10

Cartier plans to double the number of its boutiques in the next two to three years, particularly in China, where the luxury industry is experiencing enormous growth at the moment. The MO Down reported last week that Tiffany & Co. is opening stores faster than ever, and it seems that Cartier is following suit. The opening of its Hong Kong flagship last week demonstrates the brand’s strategic response to the expected growth of the watch and fine jewellery industry in Asia over the next five years. China’s increased appetite for jewels and luxury goods presents an exciting and unrivalled opportunity to capitalise on continuing rapid economic growth and bringing brands to a newly affluent urban population. Making up 31 per cent of the global market, we are fascinated by the different strategies brands are employing to make themselves known in this new market. Many luxury brands are new to Chinese consumers, and brand loyalty is basically non-existent. We predict some elaborate efforts to win hearts and minds, and can’t wait to sit back and watch the show.

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Prada Thriving as Sales Soar... 29/11/10

Prada joins the ranks of the thriving Burberry and Tiffany & Co. this week. Sales have tripled in the past nine months following increased sales, and (unsurprisingly), huge growth in Asia. Prada has been expected to make an IPO for a while now. Every time the brand reports strong figures, speculation suggests an IPO is just around the corner. In September, we predicted a Hong Kong offering, but still no official decision just yet...

Prada spokespeople say they are considering a listing in 2011. Now seems as good a time as ever, and it is great to see this beloved name forging strongly ahead. Retail expansion seems to be a common strategy shared by brands that are doing well at the moment. Despite alleged discrimination against workers in Japan, Prada is growing, and stores are opening left right and centre. Australia will gain three new stores in next year’s first quarter (Prada and the first Miu Miu in Sydney Westfield City and a Prada first in Perth). Given Miuccia Prada’s tradition of clever and innovative collections, the brand is on a remarkable trajectory.

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Friday, 26 November 2010

Tiffany & Co.’s Profits Soar Coming Into the Holiday Season 26/11/10

Tiffany’s holiday season is set to be jolly, following Dow Jones reports of a 27 per cent increase in third quarter profit on Wednesday. Consumer confidence is back on the rise, international expansions, timed nicely with the end of the GFC and the return of prosperity, make music to Tiffany’s earrings.

The MO Down has commented on Tiffany’s recent growth, as well as an increase in the global demand for diamonds. Yes, you guessed it, expansion into China has been a major contributing factor to their recent boom. Tiffany has swiftly responded to Chinese demand for jewels and luxury goods, investing confidently in between 25 and 30 stores, set to open in the next three years (14 this financial year!). Looking at third quarter figures, this may even be a conservative investment. Tiffany & Co. is experiencing enormous popularity in China at the moment, and there seems to be a bit of a chicken or egg scenario. Which came first, their presence, or their popularity?

It's great to see Tiffany's figures shining as bright as its jewels. Further proof that luxury spending is recovering from economic downturn, and we look forward to watching other brands follow suit.

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Thursday, 25 November 2010

DVF, Moschino and Escada Among New Luxury Boutiques Opened in China! 25/11/10

It seems to be new store galore in China at the moment, with new Chinese openings including DVF, Moschino, Escada and Porsche design. Diane Von Furstenberg’s opening of her first Beijing boutique (which contains two diamond-shaped rooms, we told you the Chinese are all about diamonds!), coincides with the opening of the first DVF Sydney boutique. The MO Down was in attendance at last night’s opening at the new Westfield Sydney, and what a spectacular occasion it was.

Across town in China, Shanghai saw the opening of a concept store for the German luxury brand Escada. Incorporating crystal chandeliers, vases and sculpture, the store appeals to the rising popularity of luxury brands in China. Moschino have taken a different, more flamboyant approach, and incorporated four themed mini art exhibitions into its Beijing opening.

The fastest growing luxury market in the world, China is set to see the best luxury brands have to offer in the upcoming months. As brands battle with one another to assert themselves in a highly competitive market, with malleable and embryonic brand loyalty, we predict some fine Chinese displays from the world’s finest.

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Wednesday, 24 November 2010

Can Luxury Brands Tame Social/Online Media?…. The Jury is Still Out... 24/11/10

We’ve spoken at length about the relative reluctance of luxury brands to embrace social/online media. Luxury brands pride themselves on being at the pinnacle of innovation and cutting edge, but have lagged far behind the cutting edge of using social and online media to publicise their brands. Some have said ‘luxury are above that sort of thing.’ This is both ridiculous and untrue. There is no brand so exclusive it can afford not to publicise itself at all. Different courses for different horses, sure. Some prefer more traditional avenues, and that is fine. But we caution brands against shunning ‘new media’ and online marketing, these are increasingly becoming the first port of call, particularly for younger consumers.

It has been interesting to watch many brands jump at the launch of the iPad, with an array of different apps, and a varied rate of success. Brands like Burberry seem to have their social networking down pat. Others are flailing. Here at the MO Down, we are curious as to what impact the success/failure of these apps will have on the success/failure of different luxury brands’ popularity. Will big brands like Chanel and Juicy Couture be able to keep shoppers engaged, and loyally within their branded apps? Luxury shoppers will use the Internet, and they will use social media. The question is, can brands find a way to use this to their advantage. Customers want something that will give them what they want directly, and save them weeding through the mass of information online. Can brands provide this? Will fashion shoppers take to fashion-only aggregators like Asos? Or will they default to searching with Google and ebay? As far as we are concerned, the jury is still out.

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Tuesday, 23 November 2010

Karl Who?... More Like, Haider Who? 23/11/10

Rumour has it, Karl Lagerfeld is already contemplating his successor at the house of Chanel. He has a contract for life, thank goodness, so it’s at his own discretion that he will select a suitable candidate to succeed his throne. ‘At the moment, I’d say it would be Haider Ackermann’, says Lagerfeld. The crowd goes wild. Ackermann currently resides in Belgium. He is of Colombian origin, and started his line in 2001. He has dressed Penelope Cruz, and Tilda Swinton and we have an inkling he’s about to get a whole lot more attention. For those of you not familiar with his designs, check out his latest collection here! Looks like there are some great things to come for this talented individual…

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Burberry’s CEO 16 in Fortune’s Business Person of the Year 23/11/10

Last Thursday, we wrote about Burberry, and how they seem to be experiencing a golden era at the moment. Figures are up, and CEO Angela Ahrendts received two Walpole awards. Well, things are only getting better. She is also 16th out of 50 on Fortune’s Business Person of the Year list. How did Ahrendts and 49 others get there? According to Fortune, ‘we searched for leaders who didn’t just crawl from the wreckage of the GFC, but sprinted from it.’ And this is exactly what Burberry has done. Achieving incredible growth during a difficult time over the past 24 plus months, it just goes to show that true talent will prosper no matter how dire things seem. Burberry has employed deep tissue strategy. They know their customers, and they engage them. In return? They’ve won loyalty. With 3 million facebook users ‘liking’ the brand as of last week, they’re certainly reading the mood right now, so very right.

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Monday, 22 November 2010

Lanvin for H&M Revealed! 22/11/10

The MO Down has impatiently awaited the revelation of the Lanvin for H&M collection. As previously reported, we have a certain opinion on these collaborations. Clever? Yes. Strategic? Yes. Broadening the (luxury) brand’s audience? Yes. Therefore broadening the (luxury) brand’s awareness? Yes. The one box we hesitate to check is status. Luxury brands work hard to maintain their status. They invest in sourcing the world’s finest materials, in ensuring unrivalled quality and excellence. Mass-produced fashion can be stylish. It serves a purpose, and it’s accessible. But there is a difference between luxury and mainstream, and if there weren’t, we would be out of a job.

We agree with Jean-Jacques Picart’s comment in an AFP article, that for couturiers, whose exclusivity is a vital asset, there is danger involved in associating with the high-street. For Picart, ‘high-street tie-ups make most sense for diverse luxury brands that sell everything from couture to lipstick’– like Lanvin, who are betting on strong perfume sales during this year’s holiday season. ‘If you don’t have any spin-off products then there isn’t much point,’ he said. The fragrance gives aspiring luxury consumers an entry price point.

Realistically, those who shop at H&M or Top Shop or Target are unlikely to wander in and purchase a ready-to-wear item from Lanvin anytime soon. But we are strong believers in aspiration and perhaps sales of Lanvin accessories will spike, as a result of the voracious appetite for the Lanvin for H&M collection.

Here we are, believing in aspiration (and collaborations are a gateway, are they not?), yet we are still concerned about brand elasticity and musing on dilution of brand strength. If these collaborations continue, awareness and popularity aside, these brands are setting themselves up for a debate about pricing. If it costs $90 for a (collaboration) Lanvin blouse at H&M, where do they get off charging $2500 as its usual price? It may become tough to convince shoppers to pay 28 times more– whatever the reason.

Finally, as Monsieur Picart says so well the idea of a serious designer going to work for a more commercial brand is more of a marriage than a serious designer doing a one off collection, which he likens to a fling! He was, of course, referring to Uniqlo's (Japanese clothing behemoth) decision to hire top designer Jil Sander. Let' hope that it's a marriage made in heaven and not hell a la the Jil Sander, Prada fiasco...

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Friday, 19 November 2010

Bulgari’s Gem-Infused Source Defence Line Coming Soon to Stores! 19/11/10

Not quite available in Australia, but Bulgari has announced its decision to make its gem-infused facial products available in stores in the US- so it’s only a matter of time. Bulgari is known for its bold iconic jewellery, but also has an extensive skincare repertoire. Its new Source Defence line contains a blend of fine and precious stones to shield skin from environmental stressors, including antioxidants and hydrators to replenish complexions. This means, there are precious gems ground up within the products. If this isn’t luxury, we don’t know what is.

Previously, these products have only been available at Bulgari resorts in Bali and Milan, but are now available in department stores, Neiman Marcus and Bergdorf Goodman. Is this an initiative to boost sales? Bulgari has experienced some instability as of late... Treatments are designed to focus heavily on hands and décolleté, stemming from Bulagri’s rich tradition in adorning these parts of the body in jewels. These are the parts women draw attention to when wearing jewellery, and now the adornment can, quite literally, become a second skin. If this is the stuff Julianne Moore uses, then get us to the States asap!

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Thursday, 18 November 2010

All Eyes On Burberry... 18/11/10

Burberry has announced its unaudited results for the six months ended 30 September 2010 and things are looking good. Showing strong operating and financial performance, revenue is up 21 per cent, with profit before tax up nearly 50 per cent and comparable sales growth of 9 per cent. Nice. 20 new mainline stores opened, unsurprisingly focused in Asia Pacific, and the Americas. Emerging market sales were up 46 per cent, and we are assuming China is largely to thank for this. Representatives from Burberry have attributed the success to ‘continued focus on the brand, ongoing investment in digital, IT and retail infrastructure (especially in China).’ Good to see they have things in check.

In other good news for Burberry, CEO Angela Ahrendts has collected two Walpole awards– in the British luxury brand and online category. Check mate! It seems Burberry can do no wrong at the moment. Their clearly defined and executed strategies are wooing the world on a business to consumer and business to industry basis. Adding to the excitement is the imminent mega store Burberry flagship opening in the 1st half of 2011 in Sydney’s CBD. So much more Burberry to check out– no pun intended.

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Wednesday, 17 November 2010

Bulgari Profit Down But Future Looking Bright 17/11/10

Despite revenue rising, Bulgari’s profit is down, and it has been moved from ‘neutral’ to ‘underweight’ by JPMorgan Chase & Co. Bulgari SpA (BUL IM) dropped 4.8 per cent to 7.10 euros, over the weekend- the largest drop in 8 months. Bulgari is the world’s third largest jeweller, and we find this drop surprising, given the recent overall recovery of the luxury industry. Rivals like Tiffany & Co. are experiencing enormous growth as of late, riding on China’s growth as a luxury market. The popularity of diamonds with Chinese brides has been a contributing factor.

Bulgari’s third quarter income was 16.6 million euros ($23.23 million AUD), falling short of the average 19.8 million euro average analyst estimate in a Bloomberg survey. Geographically, Bulgari’s sales were varied geographically. Sales rose by 11 per cent in Europe and dropped 7 per cent in the USA. Sales fell 1 per cent in Japan, increased 15 per cent across Asia as a whole and fell 2 per cent in the Middle East. Sales rose 24 per cent in greater China, which is not surprising.

Despite financial inconsistencies, Bulgari shows promise to pick its stock-self back up again, with new product launches, and exciting campaigns. The new Julianne Moore campaign certainly got us very excited. Fingers crossed for a successful Christmas season!

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Tuesday, 16 November 2010

Can Richemont Save Hermes From LVMH Takeover? 16/11/10

There has been a lot of controversy and speculation surrounding LVMH’s recent acquisition of Hermes shares. We have stumbled across a very interesting article by Bloomberg here at the MO Down. If Hermes needs a white knight to ride to its defence, to fend off any prospective (and potentially hostile) majority buyout by Monsieur LVMH Bernard Arnault, they may find it in Richemont. The Swiss luxury goods company, and third largest luxury conglomerate in the world, might just have room in their wallet for a hint of orange.

Bloomberg hypothesises that Richemont may not have enough money, however in the financial overview from the Richemont press release, sales have increased by 37 per cent, or 27 per cent at constant exchange rate, or 22 percent excluding the impact of Net-A-Porter with an increase in operating profit of 95 per cent. It’s a great result that could compound even more positively over the next 6 months (boosted by Christmas and Chinese New Year trading). It’s nice to know Hermes has another option should it require.

Still, we hope Hermes has enough Euro in its Birkins to canter ahead confidently without support. The family shareholders, who collectively own 73 per cent of Hermes are fighting hard to keep the company independent. We are following all happenings closely and will report as soon as we hear.

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Monday, 15 November 2010

Study Determines Most Popular Luxury Brands in China 15/11/10

China is the world’s fastest growing luxury market. Here at the MO Down, we have certainly noticed that Chinese consumers are increasingly gravitating towards luxury brands, and luxury brands are in turn clambering to stand out and make themselves known. The habits of wealthy individuals in the Chinese market are still largely unbiased, brands are new and unfamiliar, and customer loyalty has not had time to develop. Something of a blank canvass, it's every marketer’s dream, right?

We were very interested to learn which brands seem to be getting it right. According to a survey conducted by luxury goods consultancy FDKG and Dr Lu Xiao of Fudan University, Louis Vuitton, Dunhill and Gucci are the three most popular luxury brands in China. The study canvassed the opinion of 800 wealthy Chinese, based on their spending habits. The survey claims to give the “most comprehensive understanding of the spending behaviour and aspirations of China’s ever-growing super-rich’, and is of serious relevance to the luxury brands seeking to engage with this highly lucrative market.

In a sense, many brands are starting from scratch when entering China, especially if they are unable to rest on the laurels of reputation. Marketing that works in Europe or America, could very likely be totally irrelevant in China. Common characteristics among respondents have endless marketing potential. One statistic we found of interest indicated that 90.9% of wealthy Chinese regularly give money to charity– see our article on social responsibility and how brands might use this as part of a marketing strategy. We are interested to see how brands approach this new market, and how strategies are adapted and replaced.

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Friday, 12 November 2010

Westfield Sydney Loves Shoes 12/11/10

Sydney is in the midst of a shoe revolution. Salvatore Ferragamo and Stuart Weitzman for Hermanns are amongst those being unveiled at Westfield Syndey this month. Christian Louboutin is about to move in. Miu Miu is coming in June, and Prada in July 2011. Yet another Jimmy Choo stores opens in Sydney, this time at Bondi Junction, setting a new precedent in luxury shoe shopping. According to retailers, shoes are an area of enormous confidence– one of the fastest growing retail categories. And its not only luxury brands, Steve Madden and ALDO are establishing themselves in Westfield Sydney. The MO Down has visited the new Westfield and loves the luxury and premium cluster that is represented so strongly. The centre is very impressive thus far, and we look forward to further shoe developments!

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Thursday, 11 November 2010

Hermes 3rd Quarter Results See Sales Up 31%... 11/11/10

We’ve said it before, and we’ll say it again: things are looking up for the luxury industry. All Hermes business sectors have indicated growth this quarter, and according to media representatives at Hermes, all major world markets have indicated growth also– excluding Japan, where sales dipped 1 per cent.

In Europe, sales rose 19 per cent during the third quarter, in the USA, by 23 per cent (the opening of the first Hermes store dedicated to men on Madison Avenue in NYC is perhaps largely responsible for this). Non-Japanese Asia demonstrated an astronomical 41 per cent increase in sales, to be expected given the company’s increased concentration in investment in the region– three new stores have opened in China since the beginning of the year. Other exciting initiatives have included the new Shang Xia brand.

It’s exciting to see Hermes doing so well, and we wonder if these reports of success will up the anti re: the recent controversy surrounding LVMH’s acquisition of Hermes shares. LVMH is still insisting it has no plans for a takeover, but regardless, has clearly made a solid investment. Hermes plans to maintain control of its operations and has motions in place to increase its distribution network. Its plan for sustaining its current growth, you ask? The answer lies in its creative designs and the vitality of its craftsmanship. Of course, as one of the world’s most iconic luxury fashion names, we are hardly surprised.

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Wednesday, 10 November 2010

Tamara Mellon Part of New British Trade Envoy 10/11/10

Tamara Mellon has been appointed as a global trade envoy for Britain by David Cameron. The founder of Jimmy Choo will join handbag designer Anya Hindmarch to promote the country's booming fashion industry overseas. Interestingly, Mellon is not the first Choo representative to take on ambassadorial duties. In August last year, founder Mr. Jimmy Choo himself, was enlisted to help promote Malaysia- see the MO Down's coverage here. This is an honour not afforded to many, and we are excited to see Jimmy Choo chosen to espouse all things British.

While Mellon is the epitome of femininity and style, she is also something of an economic powerhouse- she is the 64th wealthiest woman in Britain, and arguably, the best dressed. She was awarded an OBE in June this year. She’s responsible for building the Jimmy Choo empire to what it is today, and has demonstrated entrepreneurial flair, inventing the £5 million ‘I’m not a plastic bag’ shopping bag craze. Mellon embodies all that Britain strives to be- an unrivalled balance of refined elegance and business prowess. Cameron is proud to put her, as their best foot, in Britain’s best shoes, forward.

Tamara Mellon will represent Britain as part of an official trade delegation, to speak and meet foreign ministers whilst overseas. What a wonderful acknowledgment of the fashion industry’s significance to society, we are thrilled to see two worlds collide in this way.

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Christie's Announces Gucci Collector Initiative 10/11/10

Gucci Collector, an exciting initiative by Christie’s auction house, has reportedly received over 600 submissions from over 25 countries in its first nine months. The idea is to round up some of the spectacular Gucci pieces that have been treasured and passed down through families, or hunted down by vintage connoisseurs, over the past 90 years.

Owners have submitted photos of their pieces online at Gucci.com and christies.com, in order to receive auction estimates. Christie’s experts have been working tirelessly to appraise regular uploads from Gucci collectors all over the world, assessing pieces against Gucci’s own private archives to determine their value.

We think this is a wonderful opportunity to celebrate one of the most innovative and elegant brands in the luxury industry. In addition, the Gucci Collector initiative coincides with Gucci’s plan to open a museum in Florence, the birthplace of the Italian house, in celebration of its 90th anniversary. The museum plans to include rare pieces, acquired through the Christie’s collector service.

Over 30 of the most precious and unique items, including handbags and jewellery, will be featured in Christie’s upcoming annual Fashion Through the Ages sale on December 2, 2010. We can’t wait to see how they showcase Gucci’s evolution.

Image credit: Christie's Images Ltd. 2010

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Tuesday, 9 November 2010

Is Japan Losing its Taste For Luxury? 09/11/10

With all the luxury industry’s hype about the up and coming Chinese market, India’s growing appetite, and Russia’s billionaires, there is one market that just ain’t what it used to be: Japan. Awfully quiet in the recent revival, it’s bizarre to see the Japanese are slowing down their consumption. As the undisputed leading market for luxury goods in the 80s, 90s and early 2000s, what can possibly change so abruptly? Deflation. Many luxury brands had their Faberge eggs in the Japanese basket and until very recently, had good reason to do so. It was standard practice in Tokyo to spend (equivalent) $2000 AUD on a handbag, or $200 on a tie. But times are changing, and a lack of consumer confidence has made ‘affordable’ all the rage. If in doubt regarding this statement, note the popularity of the first Japanese Hooters.

For the last few years, even prior to the GFC, luxury brands reported global growth across all markets with the exception of Japan. For the last two years, the US and the UK have been alongside Japan in regards to negative growth. Today, most key luxury brands seem to be reporting that the US, UK and European markets are picking up– and they are leaving Japan in their wake. Thankfully for luxury brands, Chinese neighbours can’t seem to get enough.

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Monday, 8 November 2010

David Jones Revisit Their Online Strategy - 8/11/10

On Thursday last, Australia's premium department store David Jones launched their online store which covers 1,500 products across several categories, including fashion, accessories, beauty, books and home wares.

David Jones were certainly early adopters of the online business when they launched their e-store almost eight years ago now (circa 2003) if our memory serves correctly. They really were pioneers at the time, the issue being it was too early a strategy, consumers had not entirely gotten their heads around online purchasing and it really was the early adopters who were actually purchasing. Unfortunately the numbers were not enough, a wider audience was needed to embrace this initiative. It would have been an expensive exercise as the logistics and input dollars for this project we believe must not have been achieving the forecast ROI as David Jones eventually decided to close the online store, after only a few seasons.

What a decade or so can do.... in our opinion it is the right move for the brand to do this now, Australian consumers are increasingly seeking out online retail opportunities locally and internationally, if David Jones was to sit on their respective hounds tooth hands any longer it may be harder to add a successful online offer. They can own this space if they do it well.

So what does it look like? Let's just say it's a relatively safe offer, we imagine stocked full of some best selling products, yet a good way to start. Easy to navigate, quick download times (and we know how important that is) and reasonable delivery windows. As we have said here at The MO Down before, luxury and premium brands owe several variables to their ongoing success yet one very fundamental point is 'control', by brands venturing into the online shopping space concerns were raised about the exposure and control of who and how the site is managed....well this is David Jones site and they can control it all the way through. The next big objective for them we'd like to imagine is getting more brands and some international fashion brands on board to really make their offer compelling, isn't it about that after all!

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Friday, 5 November 2010

Feud Between Hermes and LVMH? 05/11/10

We’ve been closely following the happening surrounding LVMH’s acquisition of Hermes shares here at the MO Down, and there has been an interesting development.

Monsieur Arnault, Europe’s wealthiest man (incroyable!) and CEO of the mighty LVMH group, has a history of getting his way. Let’s face it– he is an incredibly astute businessman, regardless of whether or not you like his modus operandi. Monsieur Arnault has his well-trained luxury eye firmly on one prize in particular. We’ll give you a hint: it’s something iconic and orange in colour. The primarily family-owned Hermes is firm in its stance that the business remain theirs at 73 per cent, and it looks like it could become a fight to the death for one of France’s most iconic brands.

It was a surprise revelation when LVMH revealed its acquisition of 17 per cent last week. Despite Msr. Arnault’s adamant denial that the move signifies future plans for a takeover, Hermes isn’t convinced. ‘If you want to be friendly Arnault, you should withdraw’ said Hermes representatives, questioning LVMH’s motivation. Hermes isn’t interested in becoming part of the luxury conglomerate. Msr. Puech (fifth generation heir of Emile Hermes, founder) told French paper, Le Figaro, ‘we are artisans; our goal is to make the best products in the world. We aren’t in the business of luxury, we’re in quality.

It’s rare to see such hostility between such big names and we can’t help but be fascinated to see how this plays out. We will continue to update as we hear…

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Thursday, 4 November 2010

Dior to Open Flagship Sydney Store? 04/11/10

We adore Dior, doesn’t everyone? With such a rich history and such artisanal qualities, the appetite for Dior is reaching pandemic proportions. Perfect timing for the opening of a flagship store in Sydney, wouldn’t you say? The store is rumoured to be opening within the next 18 months, and we’re actually quite surprised it hasn’t happened sooner. Especially since they have been talking about it for ten years. Dior really is one of the pure and original luxury brands, sitting comfortably alongside Chanel, Hermes, Louis Vuitton, Valentino and Yves Saint Laurent, to name a few.

Dior accessories are currently available in Sydney and Melbourne David Jones stores, as well as several DFS locations. However, the appetite certainly exists for the full range, whether that be ready-to-wear, handbags, shoes, costume or fine jewellery. Australian consumers are certainly ready, and we predict a mad rush when doors open. Exciting times!

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Wednesday, 3 November 2010

AUTORE Launches New Website 03/11/10

While we are on the topic of fine jewellery, Australia’s South Sea pearl & jewellery design company, AUTORE, has recently launched its pearl jewellery online, with the release of their new website www.pearlautore.com The website has been designed to showcase their stunning jewellery, as well as provide information regarding purchasing, stockists, etc. The site also includes extensive ‘pearl education’ allowing you to ‘grade your own pearl’ by the ‘AUTORE Five S’s’ of Shape, Shade, Size and Surface. Definitely worth a peek!

Image credit: collinsjewellers.com.au

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Tiffany & Co. to Establish Presence in China 03/11/10

Yesterday we talked about the price of diamonds rising with increased demand, and that this is largely attributed to the growing market for luxury goods in China. Chinese brides are developing quite the appetite for diamonds, it would seem.

Tiffany & Co. are firmly entrenched in the engagement market, so it makes sense to see its strong and confident expansion into China. According to company representatives, Tiffany is planning to open a number of new stores in China in the near future, driven by robust sales growth in the market. Apparently, within the next three years, there will be between 25 and 30 Tiffany & Co. stores in China– including, 14 this financial year. There are currently 12 Chinese Tiffany & Co. stores, but with a 27 per cent increase in the fourth quarter compared to the same time last year, there is certainly an appetite for more.

It is also of particular interest to us that the 2011 jewels and diamonds collections were unveiled in Beijing on October 22. This is the first time Tiffany & Co. have ever launched a new range outside of the US, but we won’t be surprised if it’s not the last.
We’ve said it before, China is rapidly becoming the world’s largest market for luxury brands. We expect to see many more brands paying much closer attention to this market, in an attempt to attract the attention of as many customers as possible.

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Tuesday, 2 November 2010

Economics 101: Increased Demand Means Prices Will Rise... 02/11/10

We’ve recently spent a lot of time talking about China as an emerging luxury market. We haven’t been able to say enough, really. The increased consumption of luxury goods in China is having a real and important impact across many products and services in the luxury industry. Demand has suddenly spiked, and we are wondering if this increase will mean what economics guarantees it will mean: prices will rise.

Demand by Chinese and Indian brides for diamonds has helped to lift the global price of diamonds by 44 per cent. Wasn’t it Sade’s song… It’s A Diamond Life? We think this is very apt. The increase in diamond prices in addition to the increase in gold prices globally is really upping the total retail price if you want some chic ‘bling’ in your life, regardless of where in the world you’re purchasing. While we are still excited that global luxury brands are spreading their wings and doing very well, we had not thought this all the way through. We recently speculated that a new level of super-elite luxury might start to emerge as the luxury market increases in size… could diamonds and gold soon fall into this category? Time will tell…

Image credit: aclutx70th.com

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Monday, 1 November 2010

Retail Openings Left Right and Centre… Let The Good Times Roll! 01/11/10

Last Thursday evening, October 28, was an exciting evening for retail, both luxury and commercial brands. With unveilings hotly anticipated by many, the MO Down followed happenings in Sydney and in Melbourne.

In Sydney, the Westfield Sydney project held its first stage opening. First to market brands opened their doors to a very excited crowd, in a very prestigious location– the centre spans an area between the Pitt St Mall, George St, Market St and Castlereagh St. Right under the landmark Centrepoint tower and directly between Sydney’s two major department stores (David Jones and Myer), it really couldn’t be in a better location if it tried.

This has been a huge project from the get-go, physically and financially, and first look in, we’re impressed! The mix of brands, the flow of the levels and the finishes to the floor and ceiling are impressive. And it’s only stage one. The centre should be complete by 2012. It is then expected to generate over $600 million a year in sales. Perhaps as a result of all the excitement, shares in Westfield Group rose 2.38 per cent on October 29.

Just goes to show Sydney’s voracious appetite for brands. Despite Sydney’s limited critical population mass, when compared to other key global bullet point cities, the demand is certainly being confidently anticipated by Westfield with this development.

In Melbourne, we also had a new larger footprint and new look Louis Vuitton boutique open in Crown Casino in Southbank. When Louis Vuitton opened in November last year in Chadstone, it took the number of Louis Vuitton retail spaces in Melbourne to three, which is significant. With the revamp of Crown it adds more square metres of selling space for a larger variety of product to be shown.

GFC anyone? Seems like a distant memory, long may this continue!

Image credit: blog.imff.com.au

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Who's behind the MO DOWN

Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury, www.moluxury.com.au