Fashion industry downsizes: layoffs looming at Zac Posen, Gucci (NY Daily News)
“It’s a fashion nightmare — and no, were not talking about Lady Gaga’s latest ensemble. Buzz in Seventh Avenue showrooms is that Zac Posen and Gucci are about to have some major layoffs. As of Monday, Posen vice president of communications Karen Duffy’s position was officially ‘eliminated’.”

For cashmere capitalist, dignity is bottom line (Reuters)
“Motivated at age 15 by the tears in his father’s eyes when the former farmer was forced to accept a factory job, Brunello Cucinelli is anything but an orthodox capitalist.”

Changing face of the market (Times)
“Burberry has marched into the FTSE 100. Sir Philip Green has taken his Topshop chain to the United States. London Fashion Week has regained its lustre. Recession or no recession, fashion remains one of our leading exports. But on home turf life has been tough.”

Betting on the Return of the Big Spenders (WSJ)
“Roughly a year ago… There was talk of a shift away from conspicuous consumption and a newfound appreciation for the virtues of friends, family and home cooking. That was then. On Nov. 4, an auction of Impressionist and modern art at Sotheby’s brought in $182 million, well above estimates.”

Art of the Trench | Source: Burberry

Burberry Looks Online for Ways to Gain Customers (NY Times)
“Angela Ahrendts still remembers when she bought her first Burberry trench coat… Ms. Ahrendts — who now runs the company — is hoping to move the quintessentially British brand into the age of the Internet to attract a new generation of shoppers.”

Luxury Pundits: Stay Elitist Yet Youthful (Media Post)
“Luxury brands… must be elitist, empathetic, immediate, social and youthful in order to succeed… the single worst thing that happened to luxury was its democratization.”

La Perla to rationalise brand strategy (Drapers)
“Italian lingerie firm La Perla is to rationalise its brand portfolio and lower prices in a move it claims will boost its market share.”

Bond Street rings up record for shop rents (Times Online)
“Shop rents on London’s Bond Street, home to the world’s glitziest brands, are poised to defy the credit crunch and smash through £900 per square foot — a record in Britain.”

Online museum for fashion house Ferragamo (Reuters)
“Italian fashion house Salvatore Ferragamo has taken a museum detailing its history and culture online, allowing young designers to add their creative touch to its shoe models.”

LuxuryLab Innovation Forum | Source: LuxuryLab

NEW YORK, United States — On Friday, BoF attended the LuxuryLab Innovation Forum, a half-day conference hosted by Scott Galloway, associate professor at NYU’s Stern School of Business and founder of LuxuryLab, a think tank that attracted attention earlier this autumn with a report ranking luxury brands by their “Digital IQ.”

Billed as TED for the luxury business with “high-velocity presentations,” the forum may have felt a bit unfocused at times, but from the stream of speakers, three important themes emerged.

THE DIGITAL TIPPING POINT

In the last five years, cost and time-to-market for digital assets have come down dramatically, while adoption and engagement rates amongst consumers have skyrocketed. “We have reached a digital tipping point,” observed Scott Galloway in his opening presentation.

Next up was Martin Nisenholtz, head of digital operations at The New York Times. “We’ve seen a massive shift in consumer behavior,” he said, citing internal statistics, as well as an eMarketer study that showed a doubling in digital media consumption from 2004-2008, with the fastest growth coming from affluent baby boomers. Indeed, luxury consumers are twice as active online as the general population, said the next speaker, Bart Sayer of global management consulting firm Booz & Company.

But with notable exceptions like Louis Vuitton, Ralph Lauren and Burberry, luxury brands are failing to fully embrace the digital zeitgeist. “Luxury firms are under-invested in digital,” said Mr. Sayer. They are falling behind, either because they don’t have the digital competence, or their digital teams are not empowered within their organisations.

But it’s not too late to take action. Despite the ongoing economic turmoil, now is the time for laggards to make major strategic investments in digital innovation, said Mr. Galloway.

We agree. While other companies are holding onto their cash, forward-thinking luxury brands will dramatically increase their investment in digital media and derive huge competitive advantage and future growth for doing so.

THE NEW LUXURY

Many of the speakers at the LuxuryLab event also noted that luxury was evolving, citing cultural, generational and psychographic shifts amongst affluent consumers. “Luxury as objects is giving way to luxury as experience,” said Ron Pompei, founder of creative services firm Pompei A.D.

While luxury goods that give individual pleasure and convey social status have fulfilled fundamental human needs since the dawn of time, their form has been variable. Today, affluent consumers are becoming less interested in traditional status symbols and more interested in “content-rich status experiences,” said Mr. Pompei, advising Prada to better integrate the cultural content created by Fondazione Prada with the brand’s marketing initiatives, both online and off.

Luxury is also becoming more personal, observed Chandler Burr, The New York Times perfume critic and one of the most entertaining speakers of the morning. In a talk entitled “The History of Scent Design in Three Acts,” he described the shift like this: “It’s the difference between you wearing the perfume and the perfume wearing you.” For Mr. Burr, luxury is becoming less about the cult of the creator and more about the individuality of the client.

But that doesn’t mean the new luxury is more accessible. Quite the opposite. “The new luxury is true luxury,” said branding guru Cindy Gallop, insisting that to fulfill their fundamental societal function (classifying and connecting people) luxury brands must be both unapologetically elitist and highly social.

CONVERSATIONS, COMMUNITY AND CULTURE

The third major theme of the day was the obsolescence of “command and control” thinking and the growing importance of online conversations, community-building and brand culture. “If you’re not living as part of the conversation, you’re not living,” said John Demsey, Group President of Estée Lauder.

In the one-way media world of the past, where consumers were mute and companies monopolised communication, brand managers focused on image. But in today’s many-to-many digital landscape, where brands are “participants” in a distributed and fragmented conversation with and amongst vocal consumers, image isn’t enough. It’s the set of intentions and actions that make up a brand’s culture that matter most.

“Brands are no longer at the centre,” explained Greg Shove, founder and CEO of Halogen Network. “People are talking about and remixing brands all over the internet.” In this new reality, he advised luxury companies to listen to what people are saying online, participate authentically and build digital applications that inspire, educate, support or entertain people.

“Brands should engage around interests and communities,” said Bart Sayer, citing successful digital platforms like Nike+ and Nike Playmaker which enhance the way people run and play football, attracting and inspiring authentic positive conversations and community around shared passions, not just products. “Nike just gets digital,” he said.

We wish we could say the same for the majority of luxury brands.

The Business of Fashion was an official media partner of the LuxuryLab conference.

Donatella Versace by Gilles Bensimon | Source: Elle

How Versace went from rags to riches—and back again (Newsweek)
“Donatella Versace, tiny, sculpted and forever blonde, was standing backstage after her menswear show at the Teatro Versace in Milan in June… it all felt feeble, pathetic—a sad, soulless charade to promote something that no longer exists.”

Luxury perfume houses are expanding (FT)
“Forget the lipstick index as economic indicator; in this recession, the most successful downturn beauty product is proving to be fragrance. While much of the luxury business has struggled over the past year, a number of high-end perfume businesses have been spritzing their way to success.”

Haute Couture, Available Through Netflix Model (NY Times)
“For many women, a $1,000 dress is something they admire in the pages of a glossy magazine or see draped on the frame of a celebrity — not an item hanging in their closet. But a nascent Web site called Rent the Runway is hoping to make high-end fashions much more accessible and almost as easy as renting a movie from Netflix.”

Hooray for Henry Holland (Guardian)
“Three years ago, Holland, then making his living as a fashion editor for teen magazines, started designing rhyming slogan T-shirts for his friends (sample: “I’ll Tell You Who’s Boss Kate Moss”) that rapidly became a fashion crowd in-joke.”

Fast Fashion is For Losers (PSFK)
“Apart from a few things from American Apparel and Uniqlo, oh and a knock-off Balenciaga riding hat from H&M, on the whole, there is a lot to lose from fast fashion.”

Escada Store, Berlin | Source: Luxuo

Megha Mittal to buy luxury fashion house Escada (Reuters)
“‘Today the insolvency administrator of ESCADA AG signed a sale and transfer agreement with one of the Mittal Family Trusts,’ the company said in a statement late on Thursday after the preliminary creditors’ committee approved the deal.”

Victoria’s Secret unveils plans for launch in UK and Europe (Retail Week)
“US fashion and beauty giant Limited Brands has outlined plans to open Victoria’s Secret stores in strategic markets including the UK as part of an international expansion drive.”

eBay goes upmarket with fashion site launch (Revolution)
“eBay has launched a website written by fashion followers in an attempt to attract more ‘well-to-do’ shoppers. The Inside Source aims to shift perceptions that eBay only offers second hand goods and last season’s threads.”

Asia boosts Hermès luxury sales (AFP)
“Sales in Asia helped boost French luxury group Hermès in the third quarter, the company said on Friday, reporting an overall 10-percent rise in sales to 452 million euros (672 million dollars).”

Seamstress takes on might of Chanel over crochet pattern (Guardian)
“A 61-year-old woman from a small town in eastern France is taking on the might of one of world’s greatest fashion houses in a case that threatens to shake up the way the industry treats its skilled workers.”

Versace Mini Cabriolet gearshift detail | Source: Cartype

Restructuring Luxury at Versace (NY Times)
“I am a survivor,” the designer Donatella Versace said matter-of-factly during a recent blitz of New York, a visit that made it appear little had changed in the world of the occupationally fabulous.”

Escada sells Primera brands (Drapers)
“Primera comprises brands Laurèl, Apriori and Cavita. Luxury German womenswear house Escada previously signed a contract to sell the three brands to investment fund Mutares AG in May but withdrew from it on Friday, citing problems with the closing of the deal.”

Matthew Williamson to Launch Menswear and E-Commerce (Elle)
“The British designer best known for his colorful collections chock full of prints, is creating his first-ever menswear line. The collection, which is due out in February, will be sold exclusively at Harrods and Matthew Williamson boutiques.”

India, China Seen as Fertile Ground for Own Luxury Brands (Khaleej Times)
“Europe’s creative heartland for top-end jewellery, watches and fashion could, in as little as 20 years, face a stiff competitive challenge from India, China and other developing countries, executives in the luxury industry say.”

Pakistan fashion week defies Taliban with non-Islamic dress (Telegraph)
“As Pakistan’s army battled religious extremists in South Waziristan, Karachi’s top designers sent models down catwalks with bare shoulders and exposed navels in an unusual display of skin in a country where most women cover up.”

Christopher Colfer, CEO, Alfred Dunhill | Source: Dunhill

LONDON, United Kingdom — In 1893, at the age of 21, Alfred Dunhill inherited his father’s saddlery business in London and slowly but surely transformed it into a global business spanning several categories including timepieces, automobile accessories and clothing. In this way, it was the first global luxury men’s brand, paving the way for brands like Ermengildo Zegna, Dior Homme and Tom Ford to follow in its footsteps many years later.

But over the years, despite a strong product mix and rich heritage, Dunhill has lacked a clear creative identity. And while Dunhill has the most prominent presence of any men’s luxury brand in China with over 75 stores, its presence in the United Kingdom, its home market, has paled in comparison.

In 2005, Dunhill announced it was bringing in 36 year-old Christopher Colfer from elsewhere in Richemont, where amongst other things, Colfer had overseen the Swiss luxury group’s prescient early investment in Net-a-Porter. Upon taking the reins as CEO, Colfer embarked on a transformation strategy for Dunhill: buying back licenses, appointing Kim Jones as Creative Director, and launching a series of ‘Homes’ in key markets, including London’s Bourdon House.

Formerly the London residence of the late 2nd Duke of Westminster, who had wooed Coco Chanel within its beautiful walls, Bourdon House includes a private member’s club (modeled after the Hellfire Clubs) and is Dunhill’s London ‘Home,’ tucked away near the end of bustling Mount Street, the new epicenter of London’s luxury retail explosion.

I recently met Chris at Bourdon House to take stock of what has been a very busy few years and to look ahead into Dunhill’s plans for the future.

BoF: We’re sitting here in the London ‘Home’ of Alfred Dunhill. What is the thinking behind this kind of space versus the luxury ‘flagship’. Is there really any difference at all between the two, except in name?

So many luxury houses have built these monstrous flagships. Some of them have unique products, some of them don’t. Some of them are art style, some of them are very design-led.

But one of the key elements of any luxury house is the service element. In fact, it’s the third leg of any stool. So, we wanted to make sure that we didn’t build flagships, which is why we’ve called them homes, because they are a place that you should treat like your home. You should feel comfortable and relaxed. You should be able to find what you need, and if you don’t we should be able to find it for you.

It’s all predicated and built around service. When we started this whole exercise, it was genuinely about becoming the ultimate destination store for men.

BoF: What does ‘ultimate destination’ mean in practice?

Just next door, we’ve built a bespoke, private screening room, where, as a shopper you can rent this room out. If you want to come watch the football on a Saturday night, you can do that. We’ve also had people rent it out to watch the U.S. elections. Probably more than anything else, it’s used by people when they have a dinner in the private dining room or in the restaurant. Afterwards, they watch a film with six to eight of their friends. And, because of our deal with the movie houses, we can get the latest films two weeks before they’re released.

We also have a full-service spa which offers treatments from 15 minutes to two-and-half hours, built especially for the traveling executive. There’s a barbershop and full-service dining, and probably my favourite, the bespoke and custom room. Our custom program, which we brought in globally last year, has been a fantastic, high-octane piece of business. In custom shirts, for example, most individuals who come here will order eight to 14 shirts at a time.

BoF: It must have a lot of time and money to set all this up.

Yes, indeed. The handshake agreement I had with the Duke of Westminster and Grosvenor was to restore this house to its former glory. Signing the lease was one thing, but the restoration was the really big investment and required a lot of consultation. It’s a listed two star building, which means it is one of the top 4 percent of properties in the UK, so you have that involvement. Because it’s the Duke’s personal residence, you have that involvement. Then you have Grosvenor, and Westminster City Council, Health and Safety on top of that.

It was a major undertaking, but well worth it.

BoF: With a space this size and with that kind of investment it must be difficult to turn a profit.

We don’t look at it that way. If you look at it from the point of view that this is a brand statement, that this is an anchor, that Alfred Dunhill needed a home in London, this is it. Alfred Dunhill is truly epitomised by this building. It’s very masculine and Edwardian. And, it’s the only freestanding building in Mayfair and is the former residence of the Duke of Westminster.

We’ve got a 130 year lease so we haven’t looked at this as a small, little project. This is going to be here past my kids, and their kids, and that’s what it’s all about. We never really had that anchor in London, and we have it now.

In fact, the store turns better that we thought it would. We thought it would take a little while because we are off the beaten track. When you look at all of this, and you look at how this particular P&L works, actually it’s a very positive business model.

BoF: How did the appointment of Kim Jones as Dunhill’s first ever Creative Director fit into your broader strategy?

About five years ago, Dunhill had multiple Creative Directors: there was someone designing the leather, someone designing the formal wear, someone designing the casual wear, someone who was doing the shoes. They all had their own interpretation of what Dunhill was, which meant there was no consistent creative thread running through the business.

One of the key things required for getting this brand on track was to get someone in-house to manage all of this, doing it in a relevant way that transcends all product categories and holds it together as a collection.

When we first met Kim, he was the only guy who really tore our archives apart and came back with a very structured point of view on how to rebuild this and put the pieces of the puzzle back together in a slightly different way.

BoF: Still, looking around next door, there are a lot of pieces to that puzzle. What do you see as the pillars, from a product standpoint, of the Dunhill brand?

Our two focal points are menswear and leather. Our pillars within menswear are formal shirting, blazers and outerwear. Those are the areas where we have spent a lot of time over the last fifteen months, and where we are seeing great results.

I want people to understand that actually we make the best blazer in the world. Our Camedeboo mohair blazer is crease-resistant. It keeps you warm in the winter and dry in the summer, and fits to your body over time.

We had to start to build segments within our business. The other bit that we had to do was to ‘release the brand’ a bit. Depending on country you live Dunhill can be sometimes perceived to be …

BoF: …your father’s brand?

Well, you could say that, but I am not going to! (laughs)

Depending on where you are, in certain parts of the world, we’re perceived as one of the youngest brands. In our home country, however, we have suffered a bit. Perhaps we became a bit complacent over time. Perhaps we looked at other markets as more important than our own home market.  We became an international brand without building on our roots. Although we transferred those roots very well globally — the Britishness, the creativity, the innovation, the functionality and performance element of what we do — we lost traction at home.

But in the last two years we have seen excellent progress here, with very strong double digit growth. We have a growing client base, and a younger client base.

BoF: Can we talk a little about China for a moment? I was astonished by Dunhill’s presence there. Given the state of the luxury market at the moment, this must be a major boon for your business?

As a business, China has been very solid for us. If you’re a man who bets on demographics, then you should be in China.  We were there very early in the day, but we were there under a franchise. In my first year, we bought back some of our retail in China. We now have about 45 directly-owned doors and 30 franchised stores in the country, and it is performing very well.

We also have a fourth Home store opening in Hong Kong later this year, to add to the ones we have in London, Shanghai and Tokyo. From our point of view, southern Asia and China is an invest-to-grow market and we will continue to put a lot of investment behind our businesses out there.

Imran Amed is Editor of The Business of Fashion.

CEO Talk is an ongoing series of discussions with fashion entrepreneurs and business leaders. Previous interviews are listed below:

• Natalie Massenet, Chairman and Founder, Net-a-Porter
• Camilla Skovgaard, Shoe designer and Entrepreneur
• Susan Lyne, Chief Executive Officer, Gilt Groupe
• Priya Kishore, Founder and Creative Director, Bombay Electric
• Alex Bolen, Chief Executive Officer, Oscar de la Renta
• Jeffrey Kapelman, Chief Executive Officer, Hilldun Corporation
• Bonnie Takhar, Chief Executive Officer and President, Halston
• Sara Ferrero, Chief Executive Officer, Joseph Group
• Paolo Fontanelli, Chief Executive Officer, Furla
• Stella Iishi, President and Founder, The News Inc.
• Greg Furman, Founder and Chairman, Luxury Marketing Council
• Sarah Curran, Founder and Chief Executive Officer, my-wardrobe.com
• Brian Hill, Chief Executive Officer, Aritzia
• José Neves, Founder and Chief Executive Officer, farfetch.com
• Federico Marchetti, Founder and Chief Executive Officer, YOOX Group
• Sojin Lee, Co-Founder, Fashionair.com

• Harold Tillman, Chairman, The British Fashion Council

Escada Autumn/Winter 09 | Source: Escada

A fashion coup (NY Post)
“There is a new player in the international bidding war for a European luxury brand. The owner of Faconnable has emerged as one of the buyers likely to scoop German fashion house Escada out of bankruptcy.”

Luxury malls languish in booming Brazil (UPI)
“Dozens of new luxury malls remain nearly empty all over Brazil. Luxury boutiques would not release sales figures but analysts and sales staff said that few high-end retailers in Brazil are turning profits.”

Valentino pins right balance with new line (Reuters)
“Italy’s Valentino has pinned down the right balance for the fashion brand whose founder retired last year with its latest womenswear collection receiving “great response” from press and buyers, its CEO said.”

Japan, Foucault, Warhol And The Luxury Economy (Agenda Inc.)
“Helge Fluch… is working on an emerging philosophy of luxury which draws from Pierre Bourdieu, Baudrillard, Foucault, and other post-modern social theorists, and more contemporary references such as Currid’s ‘The Warhol Economy’ and Kapferer and Bastien’s ‘The Luxury Strategy’.”

H&M latest: now we can sell anyone new Jimmy Choos (Times)
“The list of big names teaming up with the Swedish chain grows longer. We meet the woman who keeps collaborations coming.”

J Brand's fit perfect jeans | Source: J Brand

NEW YORK, United States — As the holiday shopping season draws near, we’re watching the market for premium denim with particular interest. According to a recent article by Eric Wilson in The New York Times: “The $300 pair of designer jeans is now, courtesy of the recession, the $200 pair of designer jeans.” With this recent “market correction,” Los Angeles-based J Brand has become one of the hottest denim labels of the new world order.

While consumers have welcomed recent price reductions, many women are still willing to pay higher prices for premium jeans because they offer a sartorial flexibility that other types of clothing do not.

J Brand not only has a price point that’s in tune with difficult economic times, but they’re also bucking the downward sales trend by offering what women are looking for: versatility and emotional appeal.

“Jeans, to many, are the new ‘pant.’ Denim fits, styles and washes have become sophisticated enough that women will wear their favorite jean with a Balenciaga jacket or a Stella McCartney blouse. At the same time, jeans can be dressed down and casual,” explains Kim Vernon, the president and CEO of Vernon Company, a lifestyle brand consultancy and business development firm based in New York. As a solid foundation for a variety of looks, jeans offer bang for every hard earned buck.

Indeed, it’s hard to dispute that having a pair of fierce fitting jeans is a bankable characteristic. In a recent episode of Oprah Winfrey, the media mogul declared a pair of CJ by Cookie Johnson jeans, priced from $141-$198, as the best because of the way it supports “real women’s booties.” She went on to gush: “For three days straight, I had on the jeans.” Winfrey placed the jeans on her list of favorite things, which is sure to generate astounding demand from the shows eager viewers.

It may be an elusive goal, but great fitting jeans strike an emotional chord with shoppers. “When a woman [or man] finds a great fitting jean that makes them feel sexy, confident, and comfortable, they won’t trade down. They will buy multiple pairs in different washes,” notes Vernon.

J Brand CEO Jeff Rudes agrees. “Jeans make you feel great. It’s one of the most fit-sensitive items in a women’s closet—next to bras and bathing suits,” he says. “When something so fit-sensitive makes you look good, you feel good.”

Recognizing the confidence great jeans can give a woman, J Brand favors silhouette enhancing features that attract and retain shoppers. “Brands like J Brand have proven that fit is tantamount in customer loyalty. Customers know the styles by name and by number,” says Vernon.

Not surprisingly, its frippery-free design approach to jeans is paying off. J Brand posted a 20 percent sales increase in 2009 compared to one year ago. “Our business has increased, we are a growing brand,” says Rudes. “We are picking up some market share from the bigger guys who have dominated the space for a few years.”

Denim has been front and centre at many value-driven brands this fall, but Rudes isn’t worried. When the Gap aggressively advertised its premium denim on the industry’s top models, Rudes saw it as a good sign. “If more people are eating chocolates, Godiva’s business is actually growing. I wouldn’t worry about Hersheys. If more people are having a conversation about a product category, or a trend, everyone benefits,” says Rudes.

Rudes is focusing on engaging his customers with special pieces. This fall, the label partnered with Hussein Chalayan to produce a capsule collection with prices around $250, a collaboration which will continue for Spring 2010. They’re also planning to roll out a collection with Henry Duarte by the end of this year.

The brand is solidifying partnerships with retailers, as well, producing special jeans for some of the best stores in the world: Barneys in New York, Dover Street Market in London, and Tsum in Russia. What’s more, the brand is introducing J Brand Boutique, a special line for premium stores only. “We have a strong sense of devotion to our specialty stores and want to make the consumer feel they are getting something unique with the Boutique line,” says Rudes.

Robert Cordero is a Contributing Editor of The Business of Fashion.

Hugo by Hugo Boss Autumn/Winter 09 | Source: Hugo Boss

Hugo Boss European sales fall 13 percent (Drapers)
“Total European sales at Hugo Boss fell 13% to €852m (£766m) over the first nine months of 2009 as the brand and retailer was hit by a turbulent northern European and Spanish trading climate.”

M&S and Next fight back while Primark shines (Reuters)
“Updates from three of Britain’s biggest clothing retailers should shed a little more light next week on whether consumers are starting to spend more freely ahead of the key Christmas trading period.”

Lulu Guiness signs investor to fund Asian expansion (Drapers)
“Lulu Guiness has sold a 15% stake in the luxury handbags and accessories label to Hong Kong-based First Eastern Investment Group to further expansion in Asia.”

Prada shortens temporary layoffs as orders rise (Reuters)
“Italian fashion house Prada is shortening temporary suspensions for some workers by three weeks after orders for its spring/summer 2010 clothes exceeded expectations by 10 percent.”

The Fashion Fund (Vogue)
“Vogue and the British Fashion Council have launched a new £200,000 fund today to support Britain’s young design talent both financially and with expert business advice.”