Friday, 26 February 2010

More Staff Head For The Door At Versace – 26/2/10


Quick news flash from WWD: Menswear designer Alexander Plokhov is leaving Versace after three years. The parting is allegedly amiable.

This is another example of Versace’s major staff reshuffling, which began with Gian Giacomo Ferraris taking over from Giancarlo di Risio as company CEO in June.

Lanvin Says I Do To Net-A-Porter Partnership – 26/2/10

Luxury label Lanvin and e-commerce giant Net-A-Porter have joined forces to present an upscale online bridal boutique, according to NBC New York.

We see the wisdom in this partnership, and will keep a close eye on its progression.

This development comes only days after our expos√© on eBay’s new fashion expansion plans, which includes regular flash sales and partnerships with fashion designers like Narciso Rodriguez.

Thursday, 25 February 2010

Burberry 3-D London Fashion Week Broadcast Was A Success – 25/2/10


Burberry promised an amazing spectacle with their live 3-D and 2-D screenings of their London Fashion Week show – and according to WWD and local media outlet Sky News, they delivered a memorable, “commanding” performance.

Click here to read our February 10 alert on this first of a kind 3-D broadcast, which has had the media buzzing with excitement for weeks.

A New Book Celebrates Delvaux’s 180-Year Heritage – 25/2/10


Lately we’ve devoted a lot of time to discussing timeless brands with strong heritages (possibly inspired by LVMH’s efforts to invest in the next generation of artisans) and Belgian brand Delvaux is one brand we must flag.

Que’est que c'est, you say?... Well, Delvaux is a stunning Belgian brand, which has a wonderful heritage, commencing in 1829. It is the ultimate luxury handbag to own when you don't want to 'scream' from the sidewalk about your chosen brand. It’s subtle and chic with a very stealth following.

We think it is a brand to watch. And clearly so do Hettie Judah and Veronique Pouillard as they have just written a book on the house’s 180-year history... Click here to view this book on Amazon.

Wednesday, 24 February 2010

How Luxury Goods Stand In The Eco-Friendly Fashion Debate - 24/2/10


Green was definitely in style at A/W New York Fashion Week with the event becoming carbon neutral for the first time, according to Reuters.

This development has inspired us to look into both sides of the ‘eco-couture’ debate.

On the positive side, Treehugger.com said: “While we don't necessarily endorse the price tag attached to luxury goods, we believe that items handcrafted by artisans are far better investments than off the rack, mass produced products. The key words here are quality and durability."

On the not-so-positive side, a fashion blogger argued in The Huffington Post that “Reorienting itself to one kind of green means the sacrifice of the dollar kind, and fashion will not do that. So the luxury goods industry masks the problem in soundbites and buzzwords, and enacts PR-friendly changes designed to promote the appearance of giving a shit beyond the status quo.”

To conclude her long tirade, the fashion blogger asked, “Is it possible for fashion to embrace its doppelganger, to produce sustainable goods, to do more with less and still stay in business?” And even she concedes it is possible (using stronger language), so the positives far outweigh the negatives in this debate.

And plus, the luxury goods industry is determined to become more eco-friendly. Gucci, for instance, is looking to a greener future by sponsoring research in sustainable fashion (click here for our earlier report on this). And that’s only one example of the changes taking place. See also our article on Luxury Brands Seek Greener Pastures for more details.

Tuesday, 23 February 2010

Former Hermes’ VIP Christian Blanckaert To Break His Silence In Melbourne? – 23/2/10


A Herald Sun article caught our attention with “Luxury Power Dims’ (its intriguing headline). But the comments within by Monsieur Christian Blanckaert, a former executive vice president of Hermes, had us simultaneously nodding our heads and raising our eyebrows.

Why? Click here to read the article.

We concur completely with Monsieur Blanckaert’s statement:"Everywhere in luxury you have to demonstrate that the price means something.”

… BUT we get the impression that he is pointing an indirect finger at a few players. Is he going to name names..? Perhaps he will feel far enough away in Melbourne next month when he is there for L'Oreal Melbourne Fashion Festival. We'll be there, in case any further probing is needed.

eBay To Go Head-To-Head With The Gilt Groupe? – 23/2/10


The online shopping world is set to evolve once again as eBay expands its fashion offerings and competes with other online fashion websites that have 'quick' or 'flash sales’ (like Gilt Groupe and The Outnet).

eBay say they are going to provide the right environment and create an additional competitive edge.

We believe this is an important move and additional nod to the luxury brands that eBay is working with (e.g. cultivating greater trust) on the 'genuine vs. counterfeit issue', which is an often asked question regarding eBay.

Hey and let's face it, "eBay says it sells a dress and a pair of women’s jeans every 18 seconds and a pair of shoes every three seconds..." That has got to peak interest with some brands. And if the environment is correct and given the continuing rise of online shopping, it provides options for smaller brands (like Narciso Rodriguez, who recently offered their capsule collection on eBay) to enter the e-world.

We’ll keep you in the loop on this eBay innovation. Meanwhile, you can read more at WWD.

LVMH Share Their Secrets With Lucky Student Artisans – 23/2/10


Valentine’s Day may be over, but Louis Vuitton is still sharing the love as they invest in the next generation artisans.

“Louis Vuitton was an artisan,” Renaud Dutreil from LVMH told Reuters during New York Fashion Week. “He worked with his hands. It’s important to transmit this value proposition to the next generation.”

Last year, Louis Vuitton encouraged young designers from New York’s Parsons School of Design to “rip into” vintage LV creations and create something new (see our September 23 report for details).

This year, LVMH is continuing to nurture young talent with another project, The Art of Craftsmanship Revisited, which will hopefully instil LVMH’s core luxury values into a new batch of students. Click here to read more about this valuable project in Vanity Fair.

Monday, 22 February 2010

Burberry To Cut Jobs And Close Business In Spain – 22/2/10


Burberry are not having a good run at the moment. Last week, they were robbed (see Friday’s MO Down). And this week, they’ve announced plans to close their Spanish design facility and cut 300 jobs in Barcelona.

These proposed changes are another example of the brand moving to manage the business directly and discontinue their licensing deals. Last year, they closed their Spanish line, Thomas Burberry (click here for our January 2009 article on this) due to the Spanish recession.

Read more about this development at The Telegraph.

Swiss Watch Exports Rise For The First Time In 14 Months – 22/2/10


The Federation of the Swiss Watch Industry have reported growth, and it’s not a second too soon after “14 months in the doldrums" (their official words, not ours).

They also told Reuters that "growth was back in the frame.” This growth has been linked to strong demand in China, Hong Kong and Singapore.

See our earlier report on Swatch for more details on the Swiss watch rebound.

Friday, 19 February 2010

PPR Says Alexander McQueen’s Label Will Live On – 19/2/10


There was speculation earlier in the week about the future of Alexander McQueen’s brand within PPR (see our earlier report). However, PPR has put our minds at ease by announcing the brand will continue.

Robert Polet, President and CEO of Gucci Group (which owns a 51 percent stake in McQueen’s company) said, "We believe in the future of the brand. Lee was very proud of the people working in his company, and so am I."

Polet also confirmed a McQueen collection will be shown at Paris Fashion Week - to a tearful standing ovation we suspect…

Read more about this development at WWD.

Drop That Plaid! The Great Burberry Robbery – 19/2/10


Some people will go to great lengths for a piece of Christopher Bailey-designed Burberry - eight pallets of designer plaid have been stolen from Lincolnshire in England.

The great Burberry robbery happened whilst the Burberry goods were in transit. A lorry driver delivering the sought after plaid awoke to find seven men in ski masks emptying his truck.

Let’s hope the police catch up to these crims and swap their stylish plaid for prison jumpsuits!

Thursday, 18 February 2010

Hermes Expects To Hit A Rough Patch In The Next 2 Years – 18/2/10


Last week, Hermes opened their first-ever men’s store in New York, but they were not their usual optimistic, quietly confident selves …

The reason for their gloomy outlook? Fear about future luxury taxes.

Hermes International CEO, Patrick Thomas, told Reuters that he believes “Governments worldwide will have little choice but to raise taxes on the rich to address ballooning deficits, a development that would harm luxury spending in the coming years.”

Thomas continued on to say that 2011 and 2012 looked "very gloomy" for Hermes although growing sales in Latin America and Canada, and a still untapped U.S. market, could help alleviate a global slowdown for the company.

He also made an interesting point about Asian expansion, suggesting the chain was not in a rush to open that many new stores there or elsewhere. "Hermes is extremely careful in the way we open new stores," he said, adding that the company usually prefers to expand its existing stores.

We’re a little surprised by the tone of this article. Earlier this month, Hermes’ Finance Director, Mireille Maury, was filled with optimism (see our February 8 report: Hermes Expects Sales To Keep Rising) and there was even talk of “business doubling in Las Vegas” on January 18. We sincerely hope that Hermes is off track with such dire predictions.

Wednesday, 17 February 2010

The Diamond Market Celebrates As Tiffany & Co. Expands – 17/2/10


As James E. Quinn, President of Tiffany & Co., visits Sydney and Melbourne this week, we can almost hear the luxury jewellery market expanding…

According to an article in The Australian, Quinn is in Australia this week to showcase a new range of jewellery designs by Paloma Picasso, daughter of Pablo Picasso.

He is also looking for locations for new Tiffany stores, describing Melbourne (where a new store opened in December 2009) as “superlative in terms of sales growth.” He also said, “Sydney can sustain a second Tiffany store.”

And it’s not just good news for Tiffany & Co., we read in Reuters that “diamond shares are set for a boost from a recovery in gem prices.” An analyst revealed the rough diamond market is recovering, with prices close to where they were prior to the downturn.

However, the diamond market recovery may also be linked back to Tiffany & Co. as they have just launched their latest bridal jewellery. After all, isn't a Tiffany & Co. diamond ring "timeless perfection forever after"...

Tuesday, 16 February 2010

Two Victories In The War Against Counterfeit – 16/2/10


Here at the MO Down, we love stories of counterfeit busts. And today, we have not one but two stories…

First, we read in The Wall Street Journal that eBay Inc and Louis Vuitton (LV) have clashed again in the French courts, with eBay forced to pay €200,000 (AU $306,000) in damages. eBay must also stop paying search engines to direct certain LV-related key words to the online auction site.

This case is part of an ongoing war between eBay and LV. Click here to read our September 22 piece about LV’s prior victory against eBay.

Secondly, according to the BBC News, police in Italy have seized a huge amount of “amazing quality” counterfeit goods this week.

We’re glad to hear this massive counterfeit scam was foiled. In our article, Counterfeiting: The Scary And Surprising Facts, we revealed that counterfeiting costs U.S. businesses as much as $250 billion a year – and that’s just in the U.S…

With statistics like the above, it’s no wonder there have been discussions of introducing a DNA ‘deterrent’ into luxury goods (see our January 13 report for further details).

Monday, 15 February 2010

No Official News Yet On The Future Of Alexander McQueen’s Fashion Label – 15/2/10


As the world mourns fashion designer Alexander McQueen, speculation is rife about the future of his brand within PPR.

While journalists and analysts in articles like this Bloomberg report suggest “keeping the brand going will be a challenge as McQueen was the creative force,” we prefer to wait until there is a company announcement before commenting.

Click here to read our tribute to this talented designer.

Swatch To Take Over Tiffany & Co.? – 15/2/10


Since our story about Swatch last week, Swatch shares have jumped significantly (4.8 percent) as analysts began to hint at a possible Tiffany & Co. takeover.

According to the Financial Times, “the rumours were fuelled by the company's unexpected decision to cut its dividend for 2009, which Nick Hayek, the group's Chief Executive, said would give it flexibility to react if a takeover opportunity arose this year.”

An analyst at Sanford C Bernstein suggested “Tiffany was within Swatch's reach as it already owned the US group's watch business.”

We have nothing concrete on this at this time, but we’ll keep watching this story for developments.

Friday, 12 February 2010

RIP Alexander McQueen - 12/02/10

Lee Alexander McQueen (CBE), born 16th March 1969 deceased 11th February 2010.

It is with sadness that we acknowledge the death, believed to be suicide, of the young and iconic fashion designer Alexander McQueen, who died at his home yesterday. He was the controversial designer for five years for Givenchy before really cementing the success of his own labels. Known for his outrageous fashion shows and over the top designs, he was an incredible craftsman with an early apprenticeship at the Savile Row tailors.

According to an obituary today in the Times on line, he committed suicide on the eve of his mother's funeral.

May peace now embrace him.

This Louis Vuitton Bag: Trash Or Treasure? You Decide – 12/2/10


So what are your thoughts on Louis Vuitton's new ‘Raindrop Besace’ bag? (pictured).

We read in the Luxist that these bags, available in two colours, are crafted in leather, with gold-tone detailing and a detachable leather strap. And what’s the general consensus on this bag – it looks like a trash bag.

Critics have certainly been harsh about the Raindrop Besace. But you know what they say – another woman’s trash is another’s treasure!

Personally, we prefer the ultra-luxe Whisky Case that Louis Vuitton has available by special order. It was constructed entirely by hand and is a timeless piece. You can also see it at the Luxist.

Armani Upgrades Their Website To Incorporate Social Media – 12/2/10


While Burberry basks in the media spotlight in the lead up to their 3-D live screenings of their runway show (see the MO Down for 10 February for details), Armani has been quietly increasing their web presence.

We read in The Independent that Armani relaunched their website earlier this month to bring all of its collections under one virtual roof (Giorgio Armani, Emporio Armani, Armani Collezioni, Armani Jeans, Armani Exchange, Armani Junior and Armani Casa).

Offered in Italian, English and Japanese, the new site includes links to YouTube, Facebook and Twitter accounts and lets viewers digitally explore the Armani stores worldwide.

This is not the first time we’ve noticed Armani embracing the internet and social media. In December, they launched an impressive ‘Christmas Wish’ website (click here to see our December 3 article).

Thursday, 11 February 2010

Watch How Swatch’s Sales Continue To Rebound – 11/2/10


This week, we’ve heard positive reports from Prada, LVMH and Hermes (click on the brand names for their news). Now, it’s Swatch’s time to hog the spotlight…

After an increase in sales in both January and February, Swatch announced they hope that 2010 “will be their best year ever.”

Swatch’s CEO Nick Hayek said, "We see high double-digit sales growth in January and also in February so far and this should be possible for the whole of 2010."

This news follows Swatch’s revelation last month that business was showing signs of “a significant rebound” (refer to January 22 for details).

The news wasn’t all good though. According to Reuters, the company posted a 9 percent drop in full-year profit this week to 763 million Swiss francs (AU $818 million), but still ahead of the average forecast of 698 million francs (AU $748 million) given by analysts.

Wednesday, 10 February 2010

Prada’s Profits Were Even Better Than Forecast – 10/2/10


Prada has joined the ranks of the upbeat luxury brands as they told Reuters that they had a better-than-expected operating profit in the last financial year, which ended in January.

The result was due to “a rise of more than 14 percent in retail network sales,” a Prada spokesperson said.

This is extremely positive news for Prada, especially given they are still a private company without the backing of luxury giants like Richemont and LVMH. Although, we must point out that rumours do still persist of a Prada-Richemont alliance… (see the MO Down for 7 January for details).

Online Retailer Yoox Increased Their Sales in 2009 By 50 Percent – 10/2/10


In our November 19 report, we mentioned Italian online retailer Yoox had almost doubled their sales last year. Now, the company has reached the 50 percent mark and even claim to have strong sales in North America, Japan and Europe.

Yoox, which sells premium luxury brands like Armani and Prada, is definitely a powerhouse to watch. Click here to read more.

Burberry Provides 3-D Screenings Of Its Runway Show – 10/2/10


Keep February 23 clear - as Burberry is screening its runway show in 3D...

We read in WWD that 3-D screenings will be held in New York, Paris, Dubai, Tokyo and Los Angeles for select guests.

They will also stream the show in 2-D at live.burberry.com, and fans will be able to comment using Facebook and Twitter.

Burberry continues to firmly embrace the online stage. Remember, only last month, they showed live footage of their Autumn/Winter fashion show on the GQ Magazine website (see our January 15 report for details).

Tuesday, 9 February 2010

The Chinese Are Hungry For These Louis Vuitton Handbags – 9/2/10


Look closely at Exhibit A. These two Louis Vuitton handbags are not crafted from the finest European leather; they’re made from solid chocolate.

The handbags occupy prime position at Beijing’s newly opened World Chocolate Wonderland, beside replicas of famous Chinese monuments like the Great Wall of China and the Terracotta Warriors.

We’ve always said that the Chinese tend to gravitate towards Louis Vuitton for their strong, identifiable signatures and logos (see the MO Down for December 1 for details), but a chocolate tribute to LV proves this is a brand they’re really hungry for…

To find out more about the World Chocolate Wonderland, which is open until April, click here. Or take a visual tour through this photo gallery.

Monday, 8 February 2010

Business Is Improving For LVMH – 8/2/10


"Bling, bling” is out, according to LVMH boss, Bernard Arnault, but business for the luxury giant was boosted in December and January.

We read in a Reuters article that LVMH produced “record revenue in December,” and several of its divisions (including wine and spirits, and watches and jewellery) were “relatively upbeat” about sales and orders.

Overall in 2009, LVMH defied the luxury slump with a 1 percent rise in like-for-like sales in the fourth quarter and a smaller-than-expected drop in operating profit.

Earlier this month, Richemont, Burberry, Swatch and Valentino also reported better-than-expected sales.

Hermes Expects Sales To Keep Rising – 8/2/10


After outperforming forecasts during the festive season, Hermes expects sales to rise 5 percent at constant currencies (after climbing 4.1 percent in 2009) and aims to maintain its operating margin.

"Christmas was better than expected, we had not foreseen such growth," Hermes’ Finance Director, Mireille Maury, told Reuters. "We are optimistic (about 2010)."

In the fourth quarter, Hermes' leather goods sales rose 16.8 percent at constant currencies to 278.7 million euros, silk and textiles were up 17.7 percent and ready-to-wear and fashion accessories were up 12.2 percent.

For more Hermes news, see our January report on Hermes creating a subsidiary, Shang Xia.

We also heard a student-built communications satellite named Hermes will be launched into outer space by NASA shortly. This seems ironic to us, considering its luxury namesake appears to be a rising star…

Friday, 5 February 2010

Burberry Promotes Andy Janowski To Chief Operations Officer – 5/2/10


Breaking news from WWD. Burberry has promoted Andy Janowski to the newly-created post of Chief Operations Officer, reflecting the brand's increased focus on its supply chain.

Burberry said in a statement, “Janowski joined Burberry in 2006 as senior vice president supply chain, and created a global team that transformed purchasing, manufacturing, sourcing, and shipping, resulting in cost savings and reduced environmental impact and distribution processes.”

This is another interesting reshuffle for Burberry. Last November, Burberry’s Creative Director, Christopher Bailey, was promoted to a newly created role of Chief Creative Officer. Read more at the November 13 MO Down.

Thursday, 4 February 2010

Valentino’s Sales Increased 10 Percent In The Last 2 Months – 4/2/10


Last year, Valentino SpA scaled back its expansion plans due to its own financial crisis (see the MO Down for December and July for details). But now, all signs point to major improvement and perhaps new store openings.

Valentino Fashion Group’s CEO, Stefano Sassi, said retailing revenue rose at a “double-digit” pace in December and January, and suggested “we can grow more” as a result.

Sassi also said, “I don’t know if we are seeing a light at the end of the tunnel, but for sure the situation is getting better. If the market stabilizes, there will be more opportunity to grow and then more opportunity to invest.”

For more information, click here to go to a Business Week article.

Wednesday, 3 February 2010

Tod’s Sales Are Still Going Strong – 3/2/10


In the July 31 MO Down, we commented that luxury footwear brand Tod’s were showing “signals of recovery” and were “playing on their strength in shoes.” Now, we’re happy to report that Tod’s is still putting their best foot forward and even reported an increase in 2009 sales, according to Reuters.

Click here for our other report on Tod’s recovery, dated early October.

Richemont Rumoured To Be In Dealings With Rodenstock – 3/2/10


The rumours about Richemont’s interest in Rodenstock, a Munich-based eyeglass-frames maker, seem to be true, if you believe an unconfirmed report by Bloomberg.

We briefly mentioned this rumour in the January 22 MO Down, but now we can reveal Trilantic Capital Partners, the private-equity fund backed by Johann Rupert, Chairman of Richemont, has made an offer to take control of the Rodenstock Group.

There are also claims that Richemont has offered Rodenstock a licensing deal that would permit Rodenstock to make glasses under luxury brands like Chloé and Montblanc. For more detailed information, click here.

Tuesday, 2 February 2010

High-End French Jewellers Present An United Front At Paris Haute Couture Week – 2/2/10


A new era has definitely begun in haute couture jewellery. Not only has it shared the spotlight alongside the fashion on the catwalk at Paris’ Haute Couture week, but an alliance has been formed amongst France’s most exclusive jewellery brands.

We read about this “joint bid to conquer lucrative markets in emerging nations” in an AFP article. This alliance will feature Van Cleef & Arpels, Cartier, Chaumet, Boucheron, Mellerio dis Mellers, Dior and Chanel. So perhaps it’s a case of sleeping with the enemy to escape from ‘struggle street’ …?

For background information, read the MO Down on November 26: Jewellery To Share The Runway At Paris Haute Couture Week or December 15’s Luxury Jewellery Market Goes From Strength To Strength.

Monday, 1 February 2010

Versace’s Restructuring Plan Has Been Announced – 1/2/10


In the MO Down on October 30, we revealed that Versace was in crisis mode and set to cut 350 jobs. Now, finally, Versace’s restructuring plan has been announced and there are strong hopes that the brand will return to profitability in 2011.

According to WWD and Bloomberg, this restructure will still involve axing 350 jobs. However, Versace plan to launch lower-priced women’s wear called Versace Collection to bolster sales. This new range will be priced at 30 to 40 percent below the signature collection.

For more background information on ‘Versace’s new look,” check out this interesting article in the Wall Street Journal, written by the author of a soon-to-be-published book, House Of Versace.

This article raises some interesting points. We wonder how many times Versace can re-invent itself..? It has had many incarnations already, in its 32-year odd history. Gianni Versace launched the brand in 1978 and it has struggled ever since his death. As the WSJ article put it: "Versace's failure to grow since Mr. Versace's death has left it a minnow, at just a sixth the size of Giorgio Armani SpA, and one-twentieth the size of LVMH's fashion division alone.”

The article also pointed out, “Independent, family-owned fashion companies have come under pressure in the economic downturn. Large multi-brand groups such as LVMH and PPR have weathered the storm better... They have the deep pockets to continue to invest in opulent boutiques, pages of advertising and new product lines even during tough times.”

We’ll keep you posted on Versace’s reinvention and the reaction to its lower-priced range.

Bulgari Fourth Quarter Sales Fall 5.1 Percent – 1/2/10


Despite this bad news, Bulgari’s CEO, Francesco Trapani, said it’s “reasonable to expect that 2010 will be better than the prior year.”

We read in WWD and the Wall Street Journal that the 5.1 percent decline has been blamed on “heavy destocking in the wholesale channel” and ongoing slow sales in Japan (27.3 percent drop) and the U.S (17.3 percent decline). Although US sales improved in November and December.

All product categories registered sales decreases in the quarter, except the core jewellery business. So it’s not all bad news.

Click here for our recent good news on Bulgari’s watch brand alliance.

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