Displaying items by tag: Gucci

Wednesday, 04 November 2020 13:23

ChicGeek Comment How Will Fashion Wake?

how will fashion wake post covidHibernation, coma, mothballed; however you want to label it, fashion would have been in a very deep sleep before all of this is over. Even if we’re being optimistic, and life returns to a sense of normality in the spring, it would have been nearly a full year of disruption. Fashion would continue to be affected well into 2021, without fashion and trade shows in at that time to show AW22 and and we would be not fully back to normal until spring 2022 at the earliest, when the fashion cycle would have resumed.

Left - Sleeping Beauty woke up to something good, but what about fashion?

In the classic fairytale, when the princess was cursed to sleep for a hundred years she was awakened by a handsome prince, but what will be waiting for ‘fashion’ and what state or style will it be in?

Let’s recap where we were at the beginning of this disaster. All the Kering brands - Saint Laurent, Gucci, Balenciaga - were flying. Gucci was slowing but still steaming ahead and was hopeful on becoming the world’s largest luxury brand. Bottega Veneta was gaining momentum and hype was translating into sales.

At LVMH, Louis Vuitton was still the major cash cow, Dior seemed to be doing well in sales rather than critical success and Celine was doing a stealth commercialism which, I’m sure, was being reflected in sales and exactly what Slimane was hired for and what he did previously at Saint Laurent. The main style was a mix of Gucci’s dress-up maximalism and embellishment and contemporary sportswear based on fugly chunky trainers and overpriced loungewear.

So, what can we predict for the future?

It might be worth casting an eye back in history. We’re told by the Bank of England boffins that this will be biggest recession in 300 years. Based on the bank's own best estimate and historical data, the coronavirus crisis could push the British economy into the fastest and deepest recession not seen since the huge economic slump of 1706 and the Great Frost of 1709. This was a baroque period at the beginning of Georgian Britain when fashion designers became more recognisable and fashion magazines appeared for the first time. While we’re too far away to know the minutiae of hemline changes, but it was certainly the beginning of a new era of British style and design.

The most popular comparison has been with Spanish Flu in 1918-19. After that came the Roaring Twenties, one of the most modern and dynamic decades of the 20th century. After WWII we got Christian Dior’s New Look. And while it was a feminine look back, it propelled fashion forward into the next decade and was hugely influential.

China luxury fashion gdp

The troubles of the 1970s gave us punk and the recession of the early 90s was reflected in American Grunge.

The most recent 2008 financial crash was all about the rise of China, and, undoubtedly, the growth in billon dollar brands and the associated logos and status.

Right - GDP growth of the world's three biggest economies - USA, Japan & China

While this is all simplistic, it offers some form of hope.

During the 20th century many economists cited the 'Hemline Theory'. It being the current fashion’s skirt length are a predictor of stock market direction. According to the theory, if short skirts are growing in popularity, it means the markets are going to go up.

Probably lucky everybody is wearing tracksuits right now.

And then there’s the ‘Lipstick Effect’, which is when consumers still spend money on small indulgences during recessions, economic downturns. For this reason, companies that benefit from the lipstick effect tend to be resilient even during economic downturns.

Market research firm Kline found evidence for the lipstick effect through four recessions from 1973 to 2001. Though during the financial crisis of 2008 lipstick sales dipped disproving this theory. Add a face mask and it doesn’t look like lipstick sales will be picking up anytime soon...

So, where does that leave any predictions post-COVID?

Here goes:

1) China will dominate even more. GDP Annual Growth Rate in China averaged 9.23 percent from 1989 until 2020. China’s gross domestic product expanded by 4.9 percent over the third quarter of 2020 on rising trade and consumption. According to the Wall Street Journal, it is “putting China’s economy back toward its pre-coronavirus trajectory half a year after the pandemic gutted its economy.” Brands are using China and Asia to currently support their businesses and as such more products will be tailored to these markets. China will fuel the growth in ‘Power Brands’ owned by the big groups and events like the Christian Dior, Designer of Dreams exhibition opening in Shanghai, following its success in Paris and London, will help to further educate and create this branding magic within this market.

2) Fashion will be more woke when it wakes, but the progress we were making on greening fashion will slow as many firms fight for survival and any expensive new initiatives will be put on the back burner. This is a fight for survival so we’ll see inexpensive greenwashing.

3) We’ll see a whole raft of new start-ups in the middle of next year, to launch later on that year, or in 2022. Many will be kitchen table brands with a strong and individual personality behind them.

4) Local will continue to be a focus and we’ll see more ‘luxury’ Bond Street type brands consider smaller stores in affluent neighbourhoods and design them in a less international and generic style and more of the locale.

5) They’ll be a slower reaction to the bad quality of most ‘luxury’ fashion, which will further fuel ‘fast fashion’.

On a purely aesthetic level, will people continue to want the escapist approach from brands like Gucci and what we saw during the glam 1970s downturn, or will we see a more austere and minimal look mirroring the rise in unemployment and shrinking of people’s disposable incomes? Well just have to see. Whatever happens it can't be too literal or obvious. The consumer is more sophisticated than that.

Fashion is too big now to follow the dictatorial approach of hemlines and lipsticks theories of the previous century. But, what is positive is the desire for consumption. That hasn't gone anyway. While remaining, big brands will try and monopolise for a while, we’ll see fast growing start-ups, from the most unexpected of places, give them a run for their money in a less competitive landscape which will have plenty of scope for growth due to brands disappearing.

Buy TheChicGeek's latest book FashionWankers - HERE

Read more expert ChicGeek Comment - HERE

Published in Comment

Diagou reseller DiorDespite the unprecedented turbulence in the world’s retail markets the luxury conglomerates reported strong bounce back results this month. Both LVMH and Kering, two of the world’s largest luxury goods groups, reported extremely strong sales in the third quarter of 2020.

Left - Dior AW20 - Many luxury brands no longer have limits on how much people can buy

Considering many people aren’t even leaving the house, letting alone travelling, it was surprising to see that LVMH saw sales at its fashion and leather goods division rise 12 per cent to €5.9 billion. This was much higher than market expectations and saw standout performances from the Louis Vuitton and Dior houses. The LVMH results said Christian Dior “showed remarkable momentum.” while Louis Vuitton “continued to display exceptional momentum and creativity”.

Kering too reported better than expected results. Revenue in the third quarter totalled €3.72 billion, a fall of 4.3 per cent, but representing only a decline of 1.2 per cent in comparable terms. This represented a sharp rebound after second-quarter comparable sales had plunged by 43.7 per cent.

Kering’s main cash cow, Gucci, saw revenues rise sharply in the third quarter, compared with Q2, with revenue only down 12.1 per cent, whilst retail sales were down 4 per cent on a comparable basis. Gucci reported a 43.7 per cent rise in North America and a 10.6 per cent growth in Asia-Pacific. LVMH too saw strong spending and growth in Asia and the US.

What could be behind this huge recovery surge?

Luxury companies always had a good ‘problem' in the Chinese phenomenon of ‘Daigou’. Daigou or 'Surrogate Shopping' is a term used to describe the cross-border exporting in which an individual or a syndicated group of exporters outside China purchases commodities for customers in China. Often these are luxury goods from big-name designer houses. The main reason Diagou exists is because of the price differential in the Chinese market and buying abroad is often far cheaper even after the middle men take their cut. There is a huge amount of money to be made because of the volumes and value of the goods.

Many luxury companies tried to limit the amounts sold to Diagou so as to preserve their exclusivity and not flood the market. Rarity and scarcity naturally make things more desirable. But, it appears that some of the biggest fashion houses have opened the floodgates to these buyers and organisations, no longer limiting the amounts they can purchase. Having buyers queuing up and wanting to buy as much as you can give them looks like a temptation few brands could resist as they saw their sales fall off a cliff due to COVID 19.

At the end of 2018 it was announced that Kering was ending its joint venture with Yoox Net-a-Porter and taking charge of the e-commerce for its brands including Alexander McQueen, Saint Laurent, Balenciaga and Bottega Veneta. The partnership was slated for renewal in 2020, by which time Kering’s digital operation, which looked after Gucci separately, would have, hopefully, matured to an advanced level.

Diagou reseller Dior

While many of the world’s busiest luxury streets have been quiet since the beginning of 2020, Kering has been using its stores to process online orders rather than its warehouse in Bologna, as it had done previously.

Right - Diagou sending Dior gifts to China?

These ‘distance sales’ are up 25 to 30 per cent throughout the group and, according to an unnamed source, they are now letting the Korean and Chinese Diagou traders buy everything they want.

“The fact that the traders are now allowed to get what they want definitely helps those brands. Even at Dior, they can buy without restrictions now.” they say.

“Some companies do it everywhere. Particularly Louis Vuitton. And Dior. For the Kering Group, before the confinement, they had vague procedures that were changing depending on what items were selling. For example, for whatever reasons, some stores were selling huge amounts of the same item (usually cheaper leather goods with a logo, like pouches). When that happened, some accounts were flagged by the directors. There is a system at Kering called ‘Luce’ where you can see who bought a particular item. Every time, a trader would come, the sales assistant had to check their purchase history.

"At one point, they also checked that the credit card they use matched their profile name. (Companies would send different people who would all use the same company card. That was flagged during audits). After the confinement, every company has relaxed the procedures. I know some traders and they told me that for instance, at Gucci or Moncler, there are no limits on items purchased.

“Even Dior doesn’t do limits of items anymore. Although I hear that Louis Vuitton and Goyard still check accounts. At Saint Laurent, there is a limit of 3 of the same item per transaction. (But they can come every day and buy 3 items - they couldn’t do that before). I understand it is happening everywhere. Also, brands like Dior have resumed doing export sales. But Saint Laurent still refuse export sales unless the client has a good reason (if there is no store in their country that carries what they want to buy). It used to be a huge market for the brands until about 2 years ago when they decided to stop it all ‘to protect the markets in Asia and the Middle East’ mostly.”

Export sales are by a foreign buyer asking for it to be shipped to their territory from a store overseas. The Korean and Chinese traders often buy closer to home in other Asian markets. The Koreans are now the biggest traders selling into China.

“When they used to call stores and ask for an export sale, they would be able to have the VAT off and the European price.” says the source.

Many Daigou are or work with sales staff, using their staff discount as an extra price differential. But, it is not really possible anymore at some brands, like YSL, because they've put a limit on staff purchases. However, the limits are not imposed throughout the Kering group and Gucci doesn’t have limits. I regularly see or hear of people buying the same products. The directors have started to flag it.” says the source.

“One would think the procedures would be the same throughout the group, but it varies drastically and depends on the CEO/ Director’s decision. There are so many odd decisions though. For instance, I heard that Gucci had cancelled the VIP discounts ... which doesn’t make a lot of sense.

Diagou reseller YSL China Chinese consumer Covid luxury brandsThere are limits in the stores but not online for Kering.... which is beyond stupid. Again, something that doesn’t make sense.

“At Kering, there is a separate online system called 'Sellsy' which is like ordering online, but through the store stock. The directors can check the accounts and stop some people from buying (if they suspect that it is for resale), but the traders can call the stores (if they cannot find items in the website) and use a different name. The credit card used cannot be checked by the stores.” says the source.

Left - Saint Laurent AW20

“Although they are starting to check the accounts again. I heard that one Korean trader got flagged and is not allowed to buy anymore. But I am sure he still does.... using various names. Some clients have more than a dozen profiles.... with same email but variations of their name. Quite surreal.” the source says.

Speaking to a Diagou reseller in China, via WeChat, they say they have direct cooperation with many of the brands, but nothing is ever ‘official’. Louis Vuitton is the best seller, followed by Dior, then Gucci. They say that COVID 19 has forced the luxury goods companies into this loose cooperation. 

As for the end consumer, “Most of the clients don’t know anything about luxury. They just want to show off”. says the owner of the Diagou store on WeChat. “They don’t even have passports.”

Asked which products were most in demand at the moment and from which brands. “Every season is different. Which one is best depends how we promote.” they say.

Diagou buy and then export the goods themselves with their commission priced in. It will be interesting how the UK Tax Free shopping changes - Read more here - alters things for Daigou buying in the UK. But, then, the vast majority of reselling sales are made in more localised markets to China, hence the huge uplift in Asia.

What it does signify is the continued huge demand for named luxury goods. Which is a good sign for the industry overall.

Daigou has always been a game of cat and mouse for the brands. In one respect, this great demand is flattering for any brand, but they also want to be extremely protective of their image and how their goods are sold. COVID 19 was a massive jolt for any business and it’s understandable why many brands panicked and became more relaxed about knowingly selling to Daigou for resale into China. It could explain some of the huge bounce back in Q3 sales.

COVID created a vacuum and distorted the balance between buyer and seller. The luxury brands have turned the taps on for the Daigou market. Just don’t expect them to be on for too long.

Buy TheChicGeek's latest book FashionWankers - HERE

Published in Comment
Friday, 16 October 2020 12:21

Can Raf Kickstart Prada to Growth?

can raf simons kickstart Prada to growth

When designer Raf Simons was announced as the new ‘co-creative director’, working alongside Miuccia Prada, at Prada, it was welcomed as a meeting of two intellectual fashion minds. His first show, SS21, shown last week in Milan, in a digital format, was a return to Prada’s minimalist carpeted and matching curtained 1990s aesthetic. It was the most anticipated show of the new womenswear season.

Left - Prada SS21

Prada has had a growth problem in recent years, so, will this new creative impetus make a difference to a luxury group that is in danger of being left behind within the luxury segment?

The Prada S.p.A. group owns the Prada, Miu Miu, Church’s and Car Shoe brands and produces and distributes luxury leather goods, footwear and apparel, benefitting from a supply chain which includes 22 owned industrial sites. It also operates in the food sector with Marchesi 1824 and in the eyewear and fragrance industries under licensing agreements. The group employs nearly 14,000 people and its products are sold in 70 countries worldwide through 641 directly operated stores as of December 31, 2019.

Prada has been trying to inject growth in recent years by reducing wholesale and discounting, but it is trailing its rivals. For example, Prada and Gucci were once neck and neck as brands, both creatively and financially. They were the juggernaut fashion phoenixes of the 1990s. When one was name checked, the other wasn’t far behind. What changed?

In the 12 months ended Dec. 31, 2019 revenues at Prada S.p.A. totalled €3.22 billion, up +2.7% compared with €3.14 billion in the same period a year earlier. Retail sales grew +4.1% to 2.63 billion euros. This is for the entire Prada Spa group which also includes Miu Miu, Church’s and Car Shoe.

amber valletta 1997 prada glen luchfordFor the same year, 2019, Gucci revenue was €9.63 billion, revenue climbed by +13.3% on a like-for-like basis (+16.2% reported) and operating income leapt by +19.8%. The brand now accounts for over 60% of it owner Kering's revenues.

Right - Prada 1997

All of Gucci’s growth stems from 2016 when it was comparable in size to Prada in terms of revenue. Over the past 4 years, Gucci has grown its revenues to be three times that of Prada. Admittedly, Gucci has had unusually meteoric growth, but the Prada brand has been pretty much flat over these past 4 years.

While the Prada share price, listed in Hong Kong, has increased recently, it has bobbed along the 24HKD- 35HKD range over the past 5 years. Its highs were back in 2013, when the stock hit around 75HKD. During the five years over which the share price declined, Prada’s earnings per share (EPS) dropped by 18% each year. The TSR (Total Shareholder Return) gives a more comprehensive picture of the return generated by a stock. In the case of Prada, it has a TSR of -23% for the last 5 years. While the Prada share price has struggled to rise, Kering’s and LVMH’s has soared.

can raf simons kickstart Prada to growth adidas

Prada is in that predicament where it is big, but isn’t quite big enough. It’s luxurious, but not luxurious enough and, while it was once a leader, it hasn’t produced much that has stuck in recent years. It felt like Miuccia Prada had checked out, creatively, of the brand years ago. The last show by Miuccia Prada, AW20, before Simons arrived, put the signature triangular logo centre stage and was its most commercial for years.

Above -  A sign of things to come? adidas Consortium + Prada Superstar 450 Leather Sneakers - £400 from MRPORTER.COM

In a statement up to June 30th 2020, Prada CEO, Patrizio Bertelli talks of ‘growth trajectory temporarily interrupted’ due to COVID 19. He said, “The first half of 2020 saw a temporary interruption of our growth trajectory which, in a situation of progressive control of the pandemic, we are confident will gradually resume from the second half of 2020, when our store network will again be fully operational. The excellent response of local consumers after the re-openings, confirms the desirability of our products and the strong relationship with our customers, which has been further strengthened by our continued focus on digital technology. The recent positive trends in all markets, combined with our solid balance sheet and financial position, allow us to look to the future with confidence today.”

On average, 40% of Prada’s retail network was closed from February to May 2020, reaching a peak of 70% in April. Its wholesale channel was heavily reduced, following the strategic decision taken in 2019 to strictly control all distribution channels to protect brand positioning and discounting. Prada said e-commerce had delivered triple-digit sales growth during and after the global lockdowns, while retail sales were down 32% and wholesale sales were down 71%.

Prada has seen double-digit sales growth since April in Mainland China, while South Korea and Taiwan, which didn’t experience store closures, showed a consistent double-digit trend throughout the period. Thanks to the contribution of these markets, the entire Asia Pacific region reported double-digit growth in June. The rest of the world was negative. In April 2020, Prada’s Board of Directors withdrew its recommendation to pay a dividend for 2019.

Prada’s difficulties during the COVID lockdowns aren’t unusual and will have been replicated by other luxury brands, but it doesn’t help its desirability and also the inability for Raf Simons’ new show to make an impact during this difficult time. According to the Business of Fashion, just 10,000 viewers tuned into the Prada Instagram live feed of the SS21 show and, according to analytics firm Tribe Dynamics, the show’s earned media value in the first 48 hours, an industry measure of third-party social media engagement, was 59 percent lower than the Spring/Summer 2020 show a year ago.

Many people have switched off from fashion, currently, and this will not have helped Prada make a splash with Simons’ collection. His first collection received warm reviews in a season without much competition. But, his return to the pared pack 90s Prada doesn’t answer the problem of growth. One good shoe is not enough, you need hundreds, and they need to roll over many seasons like the Gucci model. Gucci’s lack of seasons and huge choice of product shows how maximalism in fashion increases venues. Looks that have more accessories than a Christmas tree are going to generate more sales. More choice is the answer for growth. It also appeals to more customers.

can raf simons kickstart Prada to growth

Prada has followed this model too, previously. Prada only really started to make money and get bigger when it moved from mink trimmed nylon to colourful striped fox fur scarves and crystal embellished dresses in the noughties. When the ‘Pradasphere’ exhibit opened in Harrods in 2014 it illustrated what really sold to the contemporary Prada customer and it wasn’t minimalism. Minimalism hasn’t really made big money for any fashion business. Less isn’t more revenue.

Unfortunately for the brand, the planned Design Museum exhibition in London, planned for 2020, has been cancelled, which would have given it a boost. Details of a new collaboration between the Design Museum and Prada will be revealed in 2021.

Simons is a good designer and an influence, but his track record at Dior and Calvin Klein shows a limited understanding of what is commercial. When commercial, as illustrated with the collab with adidas above, it verges on the repetitive and boring.

Prada CEO, Bertelli’s relationships with past designers, such as Helmut Lang and Jil Sander, once owned by the Prada Group, was turbulent and Simons won’t hang around if the going gets tough (again).

Prada was once one of the world's coolest brands, but it didn’t innovate when the likes of Michael Kors started copying its famous saffiano leather. Simons is undoubtedly cool, but will he be enough for Prada to catch up with its rivals?

Buy TheChicGeek's new book FashionWankers - HERE

Published in News
Tuesday, 29 September 2020 15:18

Can Raf Kickstart Prada to Growth?

can raf simons kickstart Prada to growth

When designer Raf Simons was announced as the new ‘co-creative director’, working alongside Miuccia Prada, at Prada, it was welcomed as a meeting of two intellectual fashion minds. His first show, SS21, shown last week in Milan, in a digital format, was a return to Prada’s minimalist carpeted and matching curtained 1990s aesthetic. It was the most anticipated show of the new womenswear season.

Left - Prada SS21

Prada has had a growth problem in recent years, so, will this new creative impetus make a difference to a luxury group that is in danger of being left behind within the luxury segment?

The Prada S.p.A. group owns the Prada, Miu Miu, Church’s and Car Shoe brands and produces and distributes luxury leather goods, footwear and apparel, benefitting from a supply chain which includes 22 owned industrial sites. It also operates in the food sector with Marchesi 1824 and in the eyewear and fragrance industries under licensing agreements. The group employs nearly 14,000 people and its products are sold in 70 countries worldwide through 641 directly operated stores as of December 31, 2019.

Prada has been trying to inject growth in recent years by reducing wholesale and discounting, but it is trailing its rivals. For example, Prada and Gucci were once neck and neck as brands, both creatively and financially. They were the juggernaut fashion phoenixes of the 1990s. When one was name checked, the other wasn’t far behind. What changed?

In the 12 months ended Dec. 31, 2019 revenues at Prada S.p.A. totalled €3.22 billion, up +2.7% compared with €3.14 billion in the same period a year earlier. Retail sales grew +4.1% to 2.63 billion euros. This is for the entire Prada Spa group which also includes Miu Miu, Church’s and Car Shoe.

amber valletta 1997 prada glen luchfordFor the same year, 2019, Gucci revenue was €9.63 billion, revenue climbed by +13.3% on a like-for-like basis (+16.2% reported) and operating income leapt by +19.8%. The brand now accounts for over 60% of it owner Kering's revenues.

Right - Prada 1997

All of Gucci’s growth stems from 2016 when it was comparable in size to Prada in terms of revenue. Over the past 4 years, Gucci has grown its revenues to be three times that of Prada. Admittedly, Gucci has had unusually meteoric growth, but the Prada brand has been pretty much flat over these past 4 years.

While the Prada share price, listed in Hong Kong, has increased recently, it has bobbed along the 24HKD- 35HKD range over the past 5 years. Its highs were back in 2013, when the stock hit around 75HKD. During the five years over which the share price declined, Prada’s earnings per share (EPS) dropped by 18% each year. The TSR (Total Shareholder Return) gives a more comprehensive picture of the return generated by a stock. In the case of Prada, it has a TSR of -23% for the last 5 years. While the Prada share price has struggled to rise, Kering’s and LVMH’s has soared.

can raf simons kickstart Prada to growth adidas

Prada is in that predicament where it is big, but isn’t quite big enough. It’s luxurious, but not luxurious enough and, while it was once a leader, it hasn’t produced much that has stuck in recent years. It felt like Miuccia Prada had checked out, creatively, of the brand years ago. The last show by Miuccia Prada, AW20, before Simons arrived, put the signature triangular logo centre stage and was its most commercial for years.

Above -  A sign of things to come? adidas Consortium + Prada Superstar 450 Leather Sneakers - £400 from MRPORTER.COM

In a statement up to June 30th 2020, Prada CEO, Patrizio Bertelli talks of ‘growth trajectory temporarily interrupted’ due to COVID 19. He said, “The first half of 2020 saw a temporary interruption of our growth trajectory which, in a situation of progressive control of the pandemic, we are confident will gradually resume from the second half of 2020, when our store network will again be fully operational. The excellent response of local consumers after the re-openings, confirms the desirability of our products and the strong relationship with our customers, which has been further strengthened by our continued focus on digital technology. The recent positive trends in all markets, combined with our solid balance sheet and financial position, allow us to look to the future with confidence today.”

On average, 40% of Prada’s retail network was closed from February to May 2020, reaching a peak of 70% in April. Its wholesale channel was heavily reduced, following the strategic decision taken in 2019 to strictly control all distribution channels to protect brand positioning and discounting. Prada said e-commerce had delivered triple-digit sales growth during and after the global lockdowns, while retail sales were down 32% and wholesale sales were down 71%.

Prada has seen double-digit sales growth since April in Mainland China, while South Korea and Taiwan, which didn’t experience store closures, showed a consistent double-digit trend throughout the period. Thanks to the contribution of these markets, the entire Asia Pacific region reported double-digit growth in June. The rest of the world was negative. In April 2020, Prada’s Board of Directors withdrew its recommendation to pay a dividend for 2019.

Prada’s difficulties during the COVID lockdowns aren’t unusual and will have been replicated by other luxury brands, but it doesn’t help its desirability and also the inability for Raf Simons’ new show to make an impact during this difficult time. According to the Business of Fashion, just 10,000 viewers tuned into the Prada Instagram live feed of the SS21 show and, according to analytics firm Tribe Dynamics, the show’s earned media value in the first 48 hours, an industry measure of third-party social media engagement, was 59 percent lower than the Spring/Summer 2020 show a year ago.

Many people have switched off from fashion, currently, and this will not have helped Prada make a splash with Simons’ collection. His first collection received warm reviews in a season without much competition. But, his return to the pared pack 90s Prada doesn’t answer the problem of growth. One good shoe is not enough, you need hundreds, and they need to roll over many seasons like the Gucci model. Gucci’s lack of seasons and huge choice of product shows how maximalism in fashion increases venues. Looks that have more accessories than a Christmas tree are going to generate more sales. More choice is the answer for growth. It also appeals to more customers.

can raf simons kickstart Prada to growth

Prada has followed this model too, previously. Prada only really started to make money and get bigger when it moved from mink trimmed nylon to colourful striped fox fur scarves and crystal embellished dresses in the noughties. When the ‘Pradasphere’ exhibit opened in Harrods in 2014 it illustrated what really sold to the contemporary Prada customer and it wasn’t minimalism. Minimalism hasn’t really made big money for any fashion business. Less isn’t more revenue.

Unfortunately for the brand, the planned Design Museum exhibition in London, planned for 2020, has been cancelled, which would have given it a boost. Details of a new collaboration between the Design Museum and Prada will be revealed in 2021.

Simons is a good designer and an influence, but his track record at Dior and Calvin Klein shows a limited understanding of what is commercial. When commercial, as illustrated with the collab with adidas above, it verges on the repetitive and boring.

Prada CEO, Bertelli’s relationships with past designers, such as Helmut Lang and Jil Sander, once owned by the Prada Group, was turbulent and Simons won’t hang around if the going gets tough (again).

Prada was once one of the world's coolest brands, but it didn’t innovate when the likes of Michael Kors started copying its famous saffiano leather. Simons is undoubtedly cool, but will he be enough for Prada to catch up with its rivals?

Buy TheChicGeek's new book FashionWankers - HERE

Published in Fashion
Monday, 25 November 2019 15:53

Product Of The Week The Pearl Necklace

pearl necklace giambattusta valli Product of the week menswearIn the Wham Rap! it goes “Boys in leather kiss girls in pearls!” Fast forward to 2019 and it’s more likely to be girls in Bottega leather kiss boys in pearls. Thanks to Harry and his giant pearl at this year’s Met Gala - See more here - the pearl necklace is the menswear accessory of the season.

Pearls are the oldest gem on earth and have been treasured for centuries. Their appeal declined in the mid-20th century, when Japanese entrepreneur Mikimoto Kōkichi invented the ‘cultured’ pearl, which rendered them no longer a symbol of wealth.

pearl necklace giambattusta valli Product of the week menswear

As part of the GIAMBATTISTA VALLI x H&M collection - See more here - this necklace is made from real freshwater pearls with an antiqued metal hook fastener and pendant.

Left & Right - GIAMBATTISTA VALLI x H&M - Pearl Necklace - £49.99

BUY TheChicGeek's new book - FASHIONWANKERS - HERE

pearl necklace giambattusta valli Product of the week menswear harry stylesLeft - Harry Styles in Gucci at the Met Gala 2019

 

Published in Fashion
Wednesday, 06 November 2019 14:08

ChicGeek Comment H For?

H Beauty Harrods comment beauty retailWould a rose by any other name smell as sweet? That’s a question surrounding the announcement that Harrods, arguably the most famous shop in the world, is opening a network of beauty stores.

The new concept is going to be called ‘H Beauty’ in a move away from the green and gold of the familiar Harrods branding. The first store will launch in spring 2020 at the Lakeside shopping centre in Thurrock, closely followed by a second store in Milton Keynes.

At the same time, Harrods has also opened an ‘H Café’ in Henley-on-Thames. Opened last month, it aims to be somewhere you can enjoy the Knightsbridge department store's food whilst also having a selection of food, drink and home accessories to shop from. You can also shop on the Harrods website and use click and collect to pick up your purchases.

Left - H Beauty is new for 2020

What both these concepts have in common is the lack of the Harrods name, arguably their greatest asset. Is this a branding mistake?

Eric Musgrave, fashion industry commentator and former editor of Drapers, says, “Apart from its less-than-impressive airport shops, which always seem like upmarket tourist boutiques, Harrods has resisted the chance to open stores beyond Brompton Road. I am sure the airport shops take loads of money, but the strategy of maintaining just one “real” Harrods seems eminently sensible. 

“Harrods did not open regional satellites like its direct upmarket department store rivals, Harvey Nichols (six UK regional stores plus one in Dublin) and Selfridges (three regional stores, including two in Manchester). If you want the Harrods experience, there is only one place to go. It’s a compelling argument.” he says.

“With reference to its two ventures into beauty and into a café, it is significant it is not using the Harrods name.” says Musgrave. “It is using H. That seems sensible to me. Will the connection to consumers be obvious? These are clearly an experiment that could be quietly closed down if they don’t work and gently extended if they do. On the face of it, it is a curious move, but I do not think it is danger of diluting the main Harrods brand.” he says.

The new beauty boutiques will host new brands to Harrods and offer services such as blow-dries and facials plus a “coffee-to-cocktail” bar for the complete shopping experience. Harrods said the launch is part of its efforts to “disrupt the UK beauty retail landscape” by bringing its brand to a wider audience across the UK. No doubt they’ve looked at the demise of the traditional department store and the success of Sephora globally, but not in the UK. 

Harrods cafe H Henley on Thames comment beauty retail

Annalise Fard, director of beauty at Harrods, said: “Nobody is doing or investing more to showcase to customers what is possible in the world of 21st-century beauty than Harrods. H beauty is an opportunity to bring our mission to more beauty lovers across the UK. This investment demonstrates our belief in the strength of our beauty authority and the opportunities within the beauty industry here in the UK and represents a major extension to our current beauty business.”

Right - H Café Henley on Thames

David M Watts, Industry Consultant, says, “It’s potentially a great money spinner as beauty is fast becoming the entry into luxury (whereas it was accessories and fragrance) both designer brands (Chanel/DIOR/GUCCI) and celebrity Fenty Beauty and professional Pat McGrath and Charlotte Tilbury have sold out in stores like Bergdorf Goodman in NYC. Beauty is a smart way to engage with customers with try before you buy, makeovers and allowing experimentation in store.”

“H Café is a good idea for brand extension again if done right. Ivy Club/Restaurant have done it and VOGUE Magazine has created there cafe brand in overseas territories like Dubai, Moscow and Berlin.” says Watts.

Is it a mistake not to use the full Harrods name? “Possibly, but one assumes it will ally itself to the Harrods brand in some way with branding-colour design. Plus they want to identify with a new market so a rebrand of the new offering is not a wholly bad idea.

“Beauty is an exciting category with big margins. The recent GUCCI lipstick in vintage packaging is estimated to have sold 1 million lipsticks in its first month of launch at £34 per unit.” he says.

What advice would you offer them? "Include men's beauty - hugely growing sector underdeveloped and a perfect opportunity to test customer reaction. ‘Men's Beauty’ (not grooming) is estimated to be 1.14 billion dollars in 2019. 

“Develop new experiential in-store concepts for men’s and women’s that gets customer engagement and generates buzz, allowing customers to create assets for Instagram and other social media platforms.” says Watts.

Julien Sheridan,J Co-Founder &CEO www.sheridanandco.com, a global retail design agency, says, “I think it is a great idea. People like to buy luxury products in luxury surroundings, and I imagine that this will be a great success.  They are extending an offering that they are already excellent at, not “having a go” at something new.  

“The brands that they sell can only be delighted, as they know that Harrods will have studied intelligently in the data they hold before deciding to take this step.” she says.

“I like H Beauty. It gives them an opportunity to do their thing a little differently in here without upsetting the brand guidelines that they have in Knightsbridge.  Harrods is Harrods, and H Beauty will be a little “lighter” perhaps and a plus side of being out of Central London and with parking at Intu this may be being positioned with a different customer in mind.

“Beauty, as a category is flying, and a career in beauty is now a very respectable, highly paid, arena to be in. I love the fact that they will be offering training, a beauty concierge and masterclasses.” she says.

H Beauty Harrods comment beauty retail h cafe

“The advice I would offer them is “carry on Harrods, you know what you are doing, and you do it brilliantly” so do not listen to the doubters.  Beauty belongs to beauty, it is it’s own category, and a buying it in chemist shops does not “do it” for a lot of people.” says Sheridan.

Other retailers will be watching what and how Harrods does here. Globally, the Harrods name is as strong as other great British luxury brands, regardless of ownership, such as Rolls Royce and Cunard, but, until now, and apart from the airport stores, it hasn’t tried to expand its footprint.

Why now? It’s a tough time in retail and many people say the beauty market, particularly the colour segment, has become saturated and is struggling.

Left - Recognisably Harrods?

Many people may wonder why Harrods isn’t putting its efforts into harrods.com. This has the potential to be a huge global player in e-commerce rather than a shop window for the Knightsbridge store.

“They have tried I understand, but inside sources tell me that it's so political and departmentalised that the e-commerce has always faced insurmountable obstacles.” says Watts.

“In terms of the business doing more online, I would counsel against that.” says Musgrave. “Except for a tiny bit of own-label merchandise (and more in food, obviously), Harrods sells only third-party brands. What it sells – and this is unique – is the Harrods experience that requires a visit to the store at Knightsbridge. I’d leave it at that.” he says.

With so much bad news in retail it will be very welcome, especially for the regional shopping store owners like Intu, to have a new successful chain, regardless of the name. Harrods aren’t the first people to think of this beauty idea though, you only have to look at the new fancy Boots in Covent Garden, which has become something of an unofficial centre of beauty brands in London, with its beauty hall and YouTube studio, to prove how people are piling into specific beauty retail. 

While there is scope to pick up the slack from the closing department stores, offer something fresher and more contemporary than say Space NK, and get in there early before the rumoured relaunch of Sephora in the UK, it is becoming more competitive. The Harrods' H could just swing it.

BUY TheChicGeek's new book - FASHIONWANKERS - HERE

Published in Fashion
Thursday, 12 September 2019 09:55

ChicGeek Comment - First Look, Load Of Old Flannel(s)?

Flannels Oxford Street First Look Mike Ashley Sports DirectAs nearly as delayed as the Elizabeth Line, well, not quite, the new Flannels on the eastern side of Oxford Street has been the most anticipated addition to London’s busiest retail thoroughfare this year.

Sandwiched between Marks & Spencer’s Pantheon store and Matalan, this four storey, 18,000 sq ft store, selling designer clothes and accessorises, has been 3 years in the making. The entire building was purchased for £108 million in 2016 by a Sports Direct subsidiary and doubles as office space for its parent group. Part of Mike Ashley’s growing empire, it is the debut of Flannels in Central London.

Left - Veja display inside the new Oxford Street Flannels

This is Flannels' 44th store in the UK, after a lightning expansion, with a further 15 stores coming this year alone. In 2012, sportswear giant Sports Direct bought a majority 51% stake in Flannels and in September 2017 they acquired the brand in full and began investing in and opening stores. 

It is worth noting Sports Direct also own other premium fashion chains such as USC, Cruise and Van Mildert, but, it is Flannels which has been chosen to lead the designer crusade to “elevate” the company. Sports Direct currently has an obsession with moving from discounted sports to full price branded.

Mike Ashley said at a recent shareholder meeting regarding Flannels, “I think they are better than any other stores in the market. Now, I might have rose-tinted glasses but one of the reasons is because I have absolutely nothing to do with it. I just sign off the money. It has nothing to do with Mike Ashley.

“It’s not just a few show stores. When you have a pipeline it takes time. I’m telling you – this is for real. The reality is, I’m telling you it is real and the proof of the pudding will be when they start to roll out. It’s happening, it’s coming. It’s just not as fast as I would like it.

“I’m going to do the same with House of Fraser and get around to elevating. The modern-day consumer – that’s what they want. It could be Stone Island, it could be Nike and Adidas – it’s all about the branded world.

“Maybe I was late to the party, I accept that. Maybe my son-in-law should’ve gone out with my daughter when she was 12, but now we’re on it, nothing’s going to get us off it.”

Flannels Oxford Street First Look Mike Ashley Sports DirectOxford Street is their new flagship and is a physical testament to their ambitious intentions of becoming “the biggest global luxury retailer,”. This is what Sports Direct Group’s head of elevation, Mike Murray, Mike Ashley’s daughter’s boyfriend, told Drapers in March. He went on, “We’re in the early stages, but we have a clear vision for Flannels, we have ambition and we are willing to invest,”.

Right - Art on the second floor

The £10 million new store has been designed by Italian studio P con P, and you can see the Gucci influence in the rugs, over blown William Morris type screens, 1970s brass changing rooms and waiting areas and contrasting use of materials.

The store is split into women’s accessorises on ground, womenswear in the basement, men’s designer on first and men’s accessorise and sportswear on the second, though there wasn’t much difference between the latter two. The second-floor will also house the first ever UK retail space for US footwear brand Flight Club and the store offers services such as Click & Collect and personal styling.

One notable difference was the huge amount of staff, all dressed in black. I was told 50 members of staff currently work there. I visited on a late Tuesday afternoon and the only people seriously buying were a group of Asian tourists in the Gucci men’s section. They’d probably never heard of Flannels before.

I expected to see the usual chav labels such as Off-White and Burberry, which were there, but, interestingly, there were also brands such as Barena, Brioni, Alanui and JW Anderson. There was even a diamond necklace for nearly £60,000. I did ask how many they’d sold that week?!

Flannels Oxford Street First Look Mike Ashley Sports DirectCire Trudon candles, Acqua Di Parma fragrances and Ganni dresses were also spied, and while nothing particularly revolutionary, it is difficult to pick holes in.

“His whole plan for 100 Flannels stores is bonkers. Knock a nought off, mate!” says Eric Musgrave, former editor of Drapers and fashion industry consultant. “It will be a ghost town for 5 or 6 days a week. Wrong location. Too big. Offering nothing you can't get in the West End or Knightsbridge already.” he says.

“My guess is that they will leave it as it is for two or three years, then reorganise it, making the Flannels area smaller and bringing in USC and SD. But, I believe Ashley owns the building, so he can run it as a vanity project.” says Musgrave.

Left - Display in collaboration with artist, Alec Monopoly

The simile I would use is, it’s like an Essex nightclub, which, if playing the right music, you’d have a good time in. And that’s what the clothes and buy is, the music.

Flannels Oxford Street First Look Mike Ashley Sports Direct(The security guards do look a bit like bouncers though, and one made me delete a picture I took on my phone of the new store *eyeroll*). 

There’s nothing to fault in the design and money spent, it feels premium and everything is nicely presented, but Flannels has a problem with the snobby stigma London has towards Mike Ashley. He needs to distance himself like he says above. 

People will need persuading to part with their cash here, unless it is product they can’t get anywhere else. Flannels needs to change perceptions so people are happy to be seen swinging a Flannels bag when they leave. It’s just not cool right now. They need to turn into leaders rather than just flogging the same old mega brands to punters. 

Right - That £60,000 necklace

They own the building here, so are here for the long haul, but it will be interesting to see how it develops and how long they stick to this initial format. Flannels recorded sales of £173.9 million in its latest financial year, up 12 per cent from 2018. It’s growing because it is rapidly expanding, it obviously wants to get to the point where is it more powerful than the brands, rather than the other way around currently. I can imagine many luxury brands, currently, being cautious about choosing them as a stockist, but watch this space as they grow.

Flannels Oxford Street First Look Mike Ashley Sports DirectFlannels will also struggle with some of the quality of the product, and disappointed consumers. Read Gucci Quality Is Rubbish - here - which isn’t their fault.

Left - Flannels Oxford Street exterior. Sports Direct own the entire building

Sports Direct want more elevation than the Wright brothers, but it’s going to be expensive and I can't help think that 100 stores is too many, especially when you’re trying to sell £900 Gucci hoodies. Even though this is on Oxford Street, it needs to become a destination. It feels like the kind of store going against the retail tide, but I certainly admire the ambition.

Below - Interior shot of the new Flannels Oxford Street store

 

 

 

 

Flannels Oxford Street First Look Mike Ashley Sports Direct

Published in Fashion

Gucci quality is rubbish trends menswearGucci has been a fashion phenomenon over the last few years. It’s quirky, geek-chic and eccentric aesthetic has caught the world’s imagination and the sales have reflected that. When creative director, Alessandro Michele, arrived in January 2015 yearly sales were around the €4billion mark. In 2017, they had grown to €6.2billion, and last year it topped €8billion. It is forecast to smash the €10billion threshold in 2020 and is the star amongst Kering’s stable of brands.

But, growth is slowing, and while the Gucci look has been a barn-storming success, the reality of the product and its quality issues could be the reason for turning off many consumers. People talk, especially when things go wrong.

Left - Gucci's sales growth is slowing. Is the quality making consumers get outta here?

Though Gucci’s revenue was still up a healthy 16.3% to €4.61bn in the first half of this year, it is far below the 30%-plus growth levels the market had become used to. Gucci now accounts for 40% of Kering’s revenue and has ambitious aims to overtake Chanel and Louis Vuitton as the world’s number one luxury house in terms of turnover.

This huge growth has seen queues outside stores on streets like Bond Street and GG belts all over social media, but many consumers have been disappointed by the quality of the product and won’t be burnt twice. 

Speak to buyers or sales assistants at luxury stores about their thoughts on Gucci’s quality issues and they simply nod and shrug their shoulders, acknowledging what a growing numbers of consumers are realising. Gucci’s product is complicated and in order to make it at a price they can sell it at, they have, arguably, lowered the quality. Though the margins must also be huge.

When a brand is hot and hyped the quality isn’t questioned as much. But, the minute it starts to peak, these issues quickly become more noticeable and people aren’t afraid to tell their friends. This feels where Gucci is right now. While this isn’t particularly scientific, here are a few examples of Gucci’s quality issues from recent customers which could be slowing their growth.

Richard, 36, from London, says, “Like a mug I purchased the fluffy horsebit slippers when they first came out, they were lovely! Super cool, I was floating around fashion week in Milan like I owned the place! But, I was defo sucked in. 

“After 7 wears, the fur started to fall out, so I took them back to Gucci to get a replacement or repaired and they said they wouldn’t and couldn’t. So, I now have half furry slippers that are just discarded as they look like they have mange…” he says.

These famous ‘Princetown’ loafers were one of Gucci’s first hit products and continues to retail for around £750. “I haven’t shopped there since, not even for the mega tailoring they do now. The quality for price just isn’t there for me. Yes it’s cool, as it’s Gucci, but you have to draw the line somewhere!” says Richard.

Gucci quality is rubbish trends menswear

Jess, 38, from London, says, “The runway pieces and handbags look as good as ever but the high volume, lower entry price point items look and feel cheaper.

“I bought a scarf about 2 years ago. The print is amazing but it's paper thin - the wool is virtually transparent. Initially, I wanted to purchase a GG logo belt, but I could see the leather wasn't good quality and wouldn't last. I have an Hermes belt that's over 10 years old and going strong - the Gucci one wouldn't last a year in my opinion.” she says. “They seem to be using lower quality materials in some instances, I'm assuming this is to increase profits.” says Jess.

There was a story of a well known London department not being able to add security tags on to those white Gucci logo T-shirts because they were so thin it was putting holes in the fabric. They were retailing for well over £300.

One respondent, wishing to remain anonymous, says, “I mean the quality of their product is pretty much on a level with the high street. They produce those flimsy t-shirts that you can’t actually wash as the fabric is too delicate and you certainly can’t put a security tag or pin in it as it will mark/leave a hole.”

“The embroidery work on those sweatshirts they were pumping out at the start of the resurgence were hit and miss (they looked like a machine had done them to make it look like it was crafted by hand but obviously wasn’t). And threads just looked loose and unkept.” they says.

Right - While the ideas and imagery is fantastic, do the goods live up to expectations?

“But maybe the most disappointing scenario is their loafers. I’ve got a few pairs and all of them, after the first wear, the insoles become loose and started to peel away exposing a sticky glue like substance that you have to stand in if you want to wear them... there is nothing luxury about that at all.”

Lois Spencer-Tracey, 36, blogger, www.bunnipunch.co.uk says, “The quality of Gucci could definitely be better. Some brands that are seen as on par produce products that are quality, but for the same price.”

“I have bought a couple of pieces from Gucci.” she says. “I have bought one of their statement tee’s which was definitely not worth the £375 mark and I decided not to purchase on of their trademark trainers as the quality of the shoe was so bad for £600.

"I opted out of buying some Gucci trainers and bought the Balenciaga Triple S which I love and have worn so much. Lot better quality." she says.

“Gucci has gone down the more fashionable/trend route over the last 5 years and with that I think the quality has sadly taken a backseat. The collection has grown vastly too.” says Lois. “It has definitely made me rethink shopping there in the future.” she says.

While nobody is questioning Gucci’s creativity and design, it is disappointing that their ideas aren’t up to the standards many expect, especially when there is enough margin within the pricing to produce a decent product while keeping margins high. 

Many consumers have been sucked in by the hype, but have been left with a bitter taste in their mouth due to the quality. This is something they could rectify, but could their race to become the number one luxury goods house in the world mean too many quality corners are being cut and is their recent slowing growth a sign of this quality backlash from consumers?

Below - Gucci Pre-Fall 2019

Gucci quality is rubbish trends menswear

Published in Fashion
Tuesday, 18 June 2019 11:23

ChicGeek Comment The Wholesale Power Play

the luxury wholesale model is broken PradaThe idea of paying to have something made, passing it on to someone else to sell, who will then pay you in a few month’s time, sounds like the cashflow diagram from hell. Unless the profit margins are huge, and even then it’s not ideal, wholesaling in fashion is difficult. Small brands, especially, need the constant stream of cash, traditionally have tighter margins, and need the crucial feedback of information with regards to successful products that can inform future decisions and where to put their limited resources. 

The fashion wholesale model is broken and, now, even the big boys are deciding to step back. Luxury brands are also realising, finally, that the true value of selling directly to consumers is growing a database of customers and understanding exactly what they want in a shorter amount of time and being more reactive to those needs. Realising something is or isn’t selling in 3 to 6 month’s time is pointless and is what will suffocate even the biggest of brands. 

Many luxury brands sat back and twiddled their thumbs over the past two decades while huge fashion corporations like YOOX/Net-A-Porter and MatchesFashion.com have grown with enviable customer lists and used huge amounts of information to improve their offer and grow further.

Now, the wholesale middle man is being pushed back to a point where brands want more control, know they will make more money directly and won’t be at the whims of a fashion buyer every season as to whether they’ve made the cut or not. 

Prada announced last month that is would reduce its wholesale network in Italy and Europe in a push to have uniform prices for its products across different outlets and reduce markdowns. Before that, in March, the Milan-based company said it also would stop offering end-of-season promotions at its own shops in a bid to boost margins and protect its brand. They’ve obviously been watching the success of Gucci’s no-sale model and product that continues over seasons and doesn’t seem to quickly date.

In a short filing with the Hong Kong stock exchange, where the company is listed, the company's chairman Carlo Mazzi stated, “The Prada Group considers it essential to ensure greater consistency in pricing policies across retail and digital channels. This strategic review is intended to further strengthen the Prada Group brands with the aim of supporting sustainable long-term growth.”

Prada said it would end relations with some Italian and European wholesale partners and gradually replace them with new digital and e-commerce players. 

While they’ve tried to improve their website, added a broader selection and launched onto sites like Mr Porter, Prada is doing it at a time when the brand has lost momentum and isn’t quite as in demand as it once was. It said the leather goods category will be the most impacted with the changes and this is their biggest segment with the greatest margins.

This DTC (Direct To Consumer) approach is something born from the internet and social media. The brand owns the customer and has a direct relationship. It knows their e-mail and address. It also knows what they have bought before and, most likely, things that may interest them in the future. As personalisation increasingly becomes more sophisticated, this will also help to offer more choices and brands can follow their customers through their actions.

Physical retail third party wholesale accounts allow you less control and inject potential disruption in your cherished luxury supply chain to the customer and, as Prada says, you can keep the prices constant and consistent (probably higher) throughout one geographical region.

Kering, owner of Gucci, Saint Laurent and Balenciaga, has announced it will take back control of its e-commerce operations, focusing on own branded sites where it can control its image and client data. Excluding Gucci, the YOOX/Net-A-Porter group operated e-commerce websites for most of the brands within the Kering group. The joint venture will now end in the second quarter of 2020. While not completely cutting off their nose to spite their face, Kering wants to turn more of its collaborations with third-party, multi-brand retailers such as Farfetch or Matchesfashion.com into what it calls ‘online concessions’, where it controls everything from the product assortment to their presentation. "Each time we move from wholesale to a concession we see our top line increase in a material way,” said Grégory Boutté, Kering’s Chief Client & Digital Officer, and former vice President of eBay. Kering has stated it was ‘not against wholesale,’ and did not plan to end its relationships with third parties altogether.

This is will be a play of power and something that I think will be difficult especially with the complexities of something like FarFetch coming from multiple retailers in different locations. This sounds like wanting your cake and eating it; we want your database, but in our own way. I’m not sure that many retailers will relinquish that amount of control, especially when you consider how many brands they sell and also the loyalty they now instil in these hard won customers.

Kering's total online sales — when including the business done through third party platforms, calculated at retail and not at lower wholesale prices — came to 9.4 percent of the group's 2018 revenue. Web sales through its own brand websites and online concessions made up 4.7 percent of revenue. This has huge room to grow.

Boutté has built up his digital team from 4 people upon his arrival at Kering in 2017 to over 80 people, today. He has realised the power of data. “The more data we have, the more precise our algorithm is and the better the experience is. The other thing is that it should lead us to excellence in terms of our operations.” he said.

Across the luxury goods industry as a whole, e-commerce accounts for around 10 percent of business today and should reach 25 percent of sales by 2025, consultancy Bain estimates.

This is about information and control. Controlling discount, controlling points of sale and controlling presentation. You can control more online, even with third parties. You can see it from anywhere. It's those pockets of physical wholesale boutiques or department stores in small towns that are harder to police and often unsold stock disappears into the grey market and ends up on discount sites and with other retailers.

Where once luxury retailers didn’t want to get their hands dirty, they are now rolling up their sleeves and have their eyes on the online prize; higher prices, more full price sell-throughs and control of that all important ‘data’. This will get more ferocious as the market becomes more saturated, growth slows and customers get increasingly more expensive to acquire. 

I predict many brands will try to be exclusive to their mono-brand websites if they don’t get what they want with their third party partners, or possibly try the LVMH 24 Sèvres, now rebranded as 24S, route, but it will be hard. And expensive. 

Retailers like FarFetch and MatchesFashion.com are decades ahead and thrive on new and small designers adding that colour and point of difference online. Luxury mono-brand websites often look boring, sterile and empty. People don’t shop in single brands, particularly when they are browsing. While the idea is logical and makes sense to reduce wholesale and take back more control, it will be far more complicated than that and add multiple costs to their business models.

Published in Fashion
Monday, 03 June 2019 09:02

#OOTD 122 Fringe Festival

Menswear OOTD The Chic Geek Blogger fashion Jacket Maker fringed jacket Raey jeans Merrell bootsWhen I received an e-mail from the 'Jacket Maker', at the beginning of the year, offering me the opportunity of designing my own leather jacket, I jumped at the chance. I wanted something with lots of fringing. I was thinking Harry Styles meets Stevie Nicks (look just what happened at the recent Gucci Cruise show!) to wear to a festival. A few e-mails back and forth and a few months later, voila, here's my western style leather jacket in oxblood red with maximum fringing. Rock on!

I've teamed it with a vintage, dead-stock 1970s yellow blouse with beagle collars I found on eBay, my current favourite jeans from Raey at Matchesfashion.com and some practical hiking boots for all those hours flitting between the bar and the main stage. Bring on the music...

Credits - #Gifted - Fringed Leather Jacket - Jacket Maker, Jeans - Raey, Boots - Merrell, #Bought - Vintage Blouse - eBay, Vintage Neckace - eBay

Menswear OOTD The Chic Geek Blogger fashion Jacket Maker fringed jacket Raey jeans Merrell boots

Menswear OOTD The Chic Geek Blogger fashion Jacket Maker fringed jacket Raey jeans Merrell boots

Menswear OOTD The Chic Geek Blogger fashion Jacket Maker fringed jacket Raey jeans Merrell boots

Menswear OOTD The Chic Geek Blogger fashion Jacket Maker fringed jacket Raey jeans Merrell boots

Menswear OOTD The Chic Geek Blogger fashion Jacket Maker fringed jacket Raey jeans Merrell boots

Menswear OOTD The Chic Geek Blogger fashion Jacket Maker fringed jacket Raey jeans Merrell boots

Published in Outfit of the Day
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