Despite 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.
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.
There 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.
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Between the ‘loungewear’ emails and the ‘we-give-a-shit-please-buy-something’ emails, some brands have been hoping to offset some of the losses of physical retail with online. Online has the potential to be many brands’ life support machines; keeping some form of cash flow ticking over and the lights on.
Left - Net-a-Porter has closed its American website & warehouse
Dixons Carphone has said sales surged by more than 70% as Britons rushed to buy laptops, games consoles and freezers to cope with the coronavirus outbreak. Online sales in the UK and Ireland surged 72% in the three weeks to 21 March.
“There will be some recovery through online operations but overall the loss of sales will adversely impact our full-year profitability and cash position,” it said. The group said as a result it would still miss out on about £400m of sales between now and the end of its financial year in April.
Fashion has a lot less ‘need’ and as such will be harder hit. Fashion brands have huge amounts of stock sitting in stores, not going anywhere anytime soon. These shops have now become in-town warehouses, but they still need manning and this has become a problem for some brands. Many consumers seem to think that online and offline is separated, robotically picked and magically appears on their doorstep.
The family owned department store chain, Fenwicks said in a statement: "Our people, both employees and customers alike, are at the heart of our business... Therefore, we have taken the decision to temporarily close our website as well as our stores, to ensure the safety of our teams and customers.” Fenwicks only went online in 2017 and pick the items from in-store stock.
Schuh, the footwear retailer, too has closed its website. Chief executive Colin Temple said: “At this point in time, the UK government guidelines include that online retail should ‘still open’ and ‘is encouraged’ along with advice that if staff cannot reasonably work from home, they should continue to go into work.
“However, with the Schuh head office and DC operations based in Scotland and Scottish Government advice conflicting with UK government advice, Schuh management have made the decision to close their website, in addition to their stores that already closed from the evening of Sunday 22 March.”
He added: “A number of DC staff continue to indicate that they want to work within the warehouse to support the Schuh online business, along with other departmental employees offering their support also. However, Schuh management have confirmed that the website and stores will remain closed until there is updated UK and Scottish government advice.”
No doubt demand has fallen overall with many people tightening their expenditure and only buying what they need. But, what about the exclusively online retailers? Most surprising is Net-a-Porter/Mr Porter has closed its American business. Customers visiting the US site are now met with a message that reads: “In line with local government guidelines, and for the health and safety of our community, we have temporarily closed our warehouse. We hope you are all staying safe and look forward to welcoming you back soon.”
This is a nightmare for fashion brands selling products with a shelf life. The discounts have already started, and they’re big, Liberty of London went straight in with 50% off. Some retailers are doing okay at online, but even the best figures won’t replace physical retail, representing a 20/80 split between online and offline. To shift all this stock they will need to discount heavy, eating into profit margins, and consumers, used to a never-ending supply of ‘Just In’ will have to adjust to a new shopping landscape with less choice.
Update - Next, River Island & Moss Bros have announced their websites will close.
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When was the last time you felt truly inspired by a luxury brand’s website? Regardless of the cute little illustrations or achingly cool ad campaign flipping past, mono-luxury e-tail hasn’t really moved on over the past decade. It’s as though they still feel the brand is enough.
People don’t dress like this, and just to replicate the physical store online is to create a glorified warehouse or catalogue, which doesn’t take into account the element of personality, pampering and leisure which makes physical shopping a pleasure for many and the reason most people desire these brands in the first place. It’s not seductive.
Left - Celine.com - Have mono-luxury sites moved on in the last decade?
During this same time period, multi-brand luxury retailers such as matchesfashion.com, Far Fetch and Net-A-Porter have grown their turnovers into the hundreds of millions of dollars thanks to their ability to tap into people’s desires for newness and vast amounts of choice. These retailers are basically online fashion department stores just minus the fridges and toasters. People like to skip between brands and cherry pick items across them in the most efficient use of their time. Going onto individual, mono-brand websites, especially if you don’t know what you want, feels like a blinkered process and like you’re not getting a full view of the fashion landscape. It also feels, on the majority of sites, as though there isn’t much on there. It is just isn’t very satisfying.
Last week, Farfetch Chief Executive, Jose Neves, predicted that brands would pull out of multi-brand retailers online and operate as e-concessions on marketplaces instead, much as they have done in bricks-and-mortar department stores. And, last year, Kering announced it would take some of its biggest e-commerce websites in house, by the first half of 2020, putting an end to a seven-year joint venture with Yoox Net-a-Porter (YNAP).
Kering’s online sales made up just 6% - this is against 18% of UK retail as a whole - of its 6.4 billion euro turnover in the first half of 2018, but it did grow by 80 percent in the third quarter, faster than revenue growth in department stores or its own shops. If these brands want to reflect general online retail sales they will need to double or triple the percentage of sales coming from online.
Taking back control of the Alexander McQueen, Bottega Veneta and Balenciaga websites will allow Kering full access to information such as client data.While this is great for the brands and the back-end, tech side, customers will notice little difference unless they have a radical rethink of how they present their brands on the front-end. Consumers are used to scrolling and discount incentives to drive sales which many of these brands, outside of sales season, won’t offer. It can also feel very clinical.
According to a report by Deloitte “Big data may help luxury brands to provide personalized and superior customer service through consumer segmentation, behaviour and sentiment analysis, and predictive analytics. Several luxury brands, such as Louis Vuitton, Burberry, Tommy Hilfiger, Dior and Estée Lauder, have already started to take advantage of these technologies, using AI-powered technologies, such as machine learning and analytics, to offer more personalized and timely customer services. They implemented their own AI-powered chatbots and now can sell products using targeted marketing, personalization, and timely automation.”
In November 2018, Kering created a data science team at group level to improve the service and shopping experience of its clients. Kering intends to get real-time 360-degree view of its customers to deliver rich and personalised experiences and meet their specific needs. LVMH, doesn’t break out separate online sales information, but they did reveal that the group's online sales rose by more than 30 percent in 2018. Ian Rogers, the first ever chief digital officer of the LVMH group, told Wired, last year, that he doesn’t like the word "digital" and he has the very tricky job of matching the luxury online customer journey with the pampered, indulgent experience IRL.
“It’s not the case that luxury shopping becomes self-serve on the internet: if I do buy something I expect a high level of service, even if I’m remote.” he said “You can see it's definitely strategic for us to invest in remote customer support, and it's directly downstream of our Internet strategy. There's this nonsense land of digital transformation where people wave their hands and they talk in impractical terms. Keep drilling until you have something practical that works and then rinse and repeat. Lose these nonsense words like "digital", like "data", like "social media". You have to get rid of this digital umbrella because it's just too broad. When somebody says, "We're really behind on digital", my response is, "You're behind in every aspect of your business?” he said.
Right - Spot the difference - YSL.com
According to Kering’s Chief Client & Digital Officer, Grégory Boutté, “Digital can be many different things at once - a distribution channel; a platform for offering seamless omni-channel services to clients; a driver of brand image and visibility; and a tool for engaging with customers in a personalized way. Digital technology, data science and innovation provide a way of offering our customers the best possible experience – on every touchpoint” he said.
Online and off-line isn’t separate, most brands now offer services such as check availability, reserve in-store, make store appointment, pick-up in-store, return in-store, exchange in-store, and buy online in-store. Kering said it will continue to develop partnerships with third-party e-commerce platforms "when relevant", but we’re seeing the beginnings of a power struggle between brands and retailers. They both need each other.
Now these luxury groups are focusing on their websites they need to rethink the entire thing. Their rigid ‘aesthetics’ and branding doesn’t allow for personality. Mono-brand luxury sites are restricted by the volume of product and while it changes, it doesn’t change often enough to the levels today’s customers have become used to.
Brands, such as Prada, Saint Laurent and Celine, also sell a lot of black, which doesn’t shoot well and doesn’t make the most inspiring of online images. Add in ‘collab. fatigue’ and these brands really need to develop a new idea for websites if they want to increase sales and move away from multi-brand sites.
Luxury brands have built themselves a boring digital straight-jacket and need to start thinking differently. They could offer FaceTime with sales associates in people’s local stores, or offer a live view way of browsing in-store and matching to items online. It’s going to be about making the virtual real and vice versa. There are many possibilities, but they need to unthink the “brand”.
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The 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.
This article isn’t a discussion on the pros and cons of real fur and offers no moral viewpoint on its use. I acknowledge that this contentious issue/material is divisive and has passion on both sides.
The real ‘fur’ industry has seen massive growth, since the beginning of this century, driven by international consumers and trims on accessories and coats. It is now a $40 billion industry. It was inevitable that it would have a backlash and there would be a reaction to it, most notably from younger consumers.
I put ‘fur’ into speech marks because it’s a very broad term and while some brands may no longer use mink they continue to use the skins of other animals and there’s no definitive reason for the choice of some animals making the used list and not the others. Read more here - ChicGeek Comment Fur Debate: You Either Use Animals Or You Don’t
Brands such as Gucci, Versace and Martin Margiela have decided to announce they will no longer use real fur. Donatella Versace recently said, “Fur? I am out of that,” she said. “I don’t want to kill animals to make fashion. It doesn’t feel right.”
“Naturally we were disappointed to hear that Versace has said it won’t use real fur in collections. However, the majority of top designers will continue to work with fur as they know it is a natural product that is produced responsibly. When Donatella Versace says ‘I don’t want to kill animals to make fashion.’ presumably her company will soon stop using silk and leather?” says Andrea Martin from the British Fur Trade Association.
“It is disingenuous to claim that leather is a by-product of the meat industry, a cow still had to die to provide the product. Silk cocoons are placed in boiling water to help unravel the thread with the silk worm inside,” says Martin.
Italian accessories brand Furla has formally declared that it will be banning fur from its collections from November of this year, which would coincide with the launch of its Cruise ’19 collections. This follows decisions by Michael Kors and Yoox Net-A-Porter, which has declared that all its stores and websites would be real fur-free zones.
“I think some of the brands have gone fur free under pressure from anti-fur trends, and some are genuinely concerned. If brands don’t want to use animals for fashion then they need to consider leather, exotic skins, silk, sheepskin, makeup and products, all of which use animals. I also think human welfare is important to consider when producing fashion, and this often gets forgotten.” says Rebecca Bradley, a London based fur designer.
So, why are luxury brands really dropping the use of real fur?
I think it is pure economics and the high margin greed of today’s luxury industry. It’s the same reason many restaurants are pushing vegetarian and vegan options: the margins are higher and therefore the profit. By charging slightly lower prices for something which is much cheaper to make, the margins increase. There are only so many €25,000 full-fur coats a brand will sell and the ceiling price is sensitive, so you can’t factor in the same margins you would on your other products. If you make it in faux-fur you'll get a higher margin and a bigger percentage of profit. You’ll also sell more and probably generate more money overall.
The irony is, the reason a real fur coat is so expensive is because of the high welfare standards of the European producers. Luxury brands wouldn’t be able to use cheaper real-fur from other sources witout criticism and scrutiny.
“Fur coats may seem expensive, however the price of a fur coat should reflect a high standard of animal welfare, and therefore with a beautiful, high quality fur, many skilled people are involved with production, including a furrier, and finisher to create a fur coat that will last for many generations, ” says Bradley.
Fur, for the majority of brands, is a very small part of their businesses and therefore it’s not difficult to heroically declare you’re no longer going to use it. It’s also easily replaced by a cheaper, synthetic alternative while not altering the price very much or at all. You can paint the use of a fake fur trim as an ethical choice rather than a cost saver to the consumer. It’s cynical I know, but it’s working.
PETA’s Director, Elisa Allen, says, “Fur is dead, dead, dead. As well as making sense for designers' conscience, ditching fur makes business sense, as today's consumers are demanding animal and eco-friendly clothing for which no animal has been electrocuted, strangled, or caught in a steel-jaw trap. From Armani to Versace, the list of fur-free designers is growing every day, and innovative vegan fashion is on the rise. The tide has turned irrevocably, and there's no going back.”
Many brands used the word ‘sustainable’ when announcing their decision to no longer use real-fur, but again, this is another term in fashion that is very broad and has little full meaning until you see the detail. I’m not sure a fake fur coat is particularly sustainable, but then again it does depend on the material.
But, you also have to acknowledge that nobody needs to wear a real fur coat. We could easily survive without real fur, but it’s interesting how, out of all the animal products we use, this is one of the most offensive to some and creates the biggest reactions and protests.
The real fur industry continues to grow in China and with other newly rich consumers and markets. It is now a US$17 billion-a-year industry in China and Haining, near Shanghai, is its hub.. Fur companies will be a bit like tobacco companies: the falling sales in established markets will be replaced by growing sales in new and even bigger markets in Asia.
Chinese animal welfare standards are very different from European standards. European producers have very strict regulations and it’s an industry which has to be transparent in order to ward off criticism.
“We respect the fashion industry’s attempts to become more responsible for the products they produce. Animal welfare is of critical importance and the fur produced is farmed to the highest welfare standards.” says Martin.
“With growing concern about the environment and plastics we believe it is more responsible to move back to the use of natural, biodegradable materials. Fur is the natural and responsible choice for designers and consumers.” says Martin.
Ditching fur is quite a lazy way for luxury brands to try to be more ‘sustainable’ and look like they care about the environment.
“I think that companies and consumers becoming educated and aware of origins of products and materials is a fantastic thing, but the focus needs to be across the board, ensuring standards of human, or animal welfare and environmental impact.” says Bradley.
Many brands are seeing real fur as something they live without and it’s more hassle than it’s worth if the profit and quantities aren’t there. You can pick holes into both sides of the fur debate. While a positive move for many, the decision to no longer use real fur is really a cleverly spun business decision and driven by their continued obsession for huge margins.
Read more expert ChicGeek Comments - here
News in that Gucci is going “Fur Free” starting from SS18. President and chief executive, Marco Bizzarri, announced the move at a talk at the London College of Fashion, yesterday.
Mr Bizzarri said: “Being socially responsible is one of Gucci’s core values, and we will continue to strive to do better for the environment and animals.” The brand will no longer use any type of animal fur including, coyote, mink, fox, rabbit or karakul - aborted lamb foetuses.
The fashion house’s remaining fur clothing will be sold in an auction with the money donated to the animal rights organisation "Humane Society International” and “LAV”, an organisation that initiates legal actions to assert animal rights.
Left - Gucci Intarsia Mink - £28,340 from Mytheresa
Gucci will also join the Fur-Free alliance. This is a group of international organisations that campaigns for animal welfare and encourages that alternatives to fur are used by the fashion industry.
I respect Gucci’s decision and being the world’s second largest luxury goods company this will make an impact. It will also influence people and other brands. Any company wishing to be more “sustainable” should be encouraged. (Just how sustainable a business selling US$ 4.3 billion (2016) worth of product is debatable BTW).
But, what I never understand is the double standards on animals. You either use animals or you don’t. Gucci will no doubt still be using snakes, alligators, crocodiles, goats, lizards, ostriches, the list goes on, to make accessorises and clothes.
I’ve seen this many times before. I’ve been at Ralph Lauren where they proclaim to be “fur free” yet I’m standing next to a large crocodile “Ricky” bag. If brands really want to minimise their footprint then they should go completely vegan. Department stores stating they don’t sell fur, yet you look into a felt hat and it’s made from rabbit.
The fur industry doesn’t have to be “cruel” in the same way the meat industry doesn’t. Skins such as sable are shot in the wild and don’t live in cruel conditions. Coyotes are shot as pests in North America. You regulate for welfare standards and promote compassion in farming and every animal regardless of the product should be respected and cared for.
The fur industry can be sustainable and faux-fur, usually made from synthetics, is also detrimental to the environment and doesn't negate the desire.
Net-a-Porter group recently announced it was going fur free too. Admittedly, due to the prices, fur is only bought in small quantities and by very wealthy people. It’s interesting that Italian companies - Yoox/Net-a-Porter and Gucci are going “Fur Free” as we know those Italians like their furs, so this is definitely a shift in attitudes.
These things usually go in two ways - fur trims start to sneak in and the thing gets quietly shelved or companies continue to be "environmentally friendly" and really try and do something about the wasteful fashion cycle that currently exists. Banning "fur" isn't really touching on the real environmental impact of the fashion industry.
Read ChicGeek Comment - The Real Reason Brands Are Dropping 'Fur'
Since its inception, e-commerce has been a difficult nut to crack. When it was growing fast and taking market share, from offline, it was easy to justify spending vast sums laying the foundations for something that you will reap the benefit of later on.
Today, the luxury market is contracting, so trying to grow, whether offline or online, is particular hard, at this moment in time, especially when you're not in control of the choice of products.
Luxury fashion was slow to get fully behind e-commerce and only now are the brands giving it the attention and respect it deserves. The reasons for the change being companies like Net-a-porter and matchesfashion.com having pioneered this area and shown the riches to be made and also being able to communicate with a future consumer and grow a direct database.
Publishing house, Condé Nast, has just launched its e-commerce offering in the form of style.com This has been coming for the past couple of years and has been put back and put back and then, it surprised me, two weeks ago, by appearing on my Twitter timeline. A reported £75 million has been spent - The Times - and with over 100 employees - The FT - this is a big commitment.
There’s always room for something different/good or both, in any form of retail and the idea to combine trusted editorial with shopping is a good one, especially in a tastemaker environment like this. It makes sense.
Unfortunately, the launch site looks nothing different from a luxury site from 10 years ago. The choice is limited and being run on affiliates - which means they earn a commission on each sale - all the items are distributed from various sellers at different costs in different locations. It’s going to be a nightmare for Condé Nast to deal with returns. They want the money, but don’t want to get their hands dirty. Don't we all?!
The biggest surprise is, where is all the editorial? People have tried shoppable magazines before, they don’t work. That’s fine. But, use the budget and teams of Vogue and GQ and give me the best of the season’s images and shoots and if there’s only one shoppable product, then so be it. It’s the magic that people buy into. It’s the world that these magazines live in.
It feels as though the editors aren’t playing ball and have washed their hands of it. It probably doesn't help that style.com is based in Camden and the magazines are over in Hanover Square.
After the delayed launch, the launch now feels rushed. I think they would have been better off keeping style.com as it was - runway reports and party pictures - to keep the traffic up and instead, now, they have to cannibalise digital advertising, which is hard to generate money from at the best of times, in order to push shoppers over to the site from the magazines' individual websites.
It launched with free shipping on orders over £350, very generous! Now, it’s free shipping and returns on all orders. Clearly taking some feedback. (Mr Porter had the same issue when it launched). It has only launched in the UK, atm, and there is nothing on there you can’t get anywhere else. It's interesting too that Condé Nast invested in FarFetch.com, another high-fashion portal, and is, now, technically a competitor. Maybe the two will merge?
I think style.com is too little, too late. They’ll spend the next 18 months finding out that this business model is particularly hard to make money from, while blowing millions and millions of pounds. They'll be lucky is they ever make a profit. This could be the Ocado of fashion! In hindsight, it would have been better to have had a chat with Natalie Massenet about 15 years ago.