Can Luxury Challengers Take Burberry’s Digital Crown?

The share of luxury sales that occurs online is set to triple over the next 10 years, from around 6 percent today to 18 percent in 2025, according to McKinsey. This means e-commerce is set to become the world’s third largest luxury market after China and the United States.
https://www.businessoffashion.com/articles/fashion-tech/luxury-challengers-burberry-digital-crown

How Direct-to-Consumer Brands Are Disrupting the Global Eyewear Business

The market for fashion eyewear has long been dominated by a handful of licensing giants. But in recent years, a wave of direct-to-consumer brands like Izipizi in France, Warby Parker in the US and Gentle Monster in South Korea have won legions of fans with fashionable frames at low prices.
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The global eyewear market — which includes frames, contact lenses and sunglasses — is expected to reach $136 billion by 2021, with direct-to-consumer accounting for $2.8 billion of this, up 8 percent from 2016, according to data from Euromonitor.
https://www.businessoffashion.com/articles/intelligence/how-direct-to-consumer-brands-are-disrupting-the-global-eyewear-business

Inside the Business of Trump’s Trucker Hats and Clinton’s Pantsuit Tees

Buoyed by the advent of e-commerce — which has made it easier to sell products across the country at scale — as well as the growing importance of marketing presidential candidates as brands, political merchandise has become an increasingly important channel for fundraising, marketing and gathering data.
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According to campaign officials, Obama raised $37 million from branded product for his first campaign and a further $40 million during his 2012 re-election bid.
https://www.businessoffashion.com/articles/intelligence/inside-the-business-of-donald-trump-trucker-hats-and-hillary-clinton-pantsuit-tees-political-merchandise

The Case for the American Mall

South Coast Plaza is a luxury shopping experience, and a global shopping destination, home to an "unparalleled collection of 250 boutiques and department stores," including Bulgari, Chanel, and Roger Vivier, among others, in Costa Mesa, California,
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Historically, department store anchors, with their huge square footage and wide name recognition, have lured mono-brand stores and smaller multi-brand retailers to take up rental space alongside them. There's a particularly synergetic relationship between high-end department stores and luxury boutiques.
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"Once South Coast Plaza started adding boutiques such as Yves Saint Laurent, Courrèges, Halston, Hermès, and others, it began its transition into a luxury shopping center with a broader geographical following," says Gunn Downing. "Luxury attracted luxury."
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Taubman Centers is one of the most elite players in the mall industry, owning 21 luxury shopping centers across the United States, in addition to three properties in Asia and five more in development both domestically and abroad. Its Mall at the Millenia in Orlando, Dolphin Mall in Miami, and International Plaza in Tampa all serve Latin American tourists.
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The internet isn't killing malls — better malls are. "Shoppers have concentrated in top-tier malls, where vacancy rates are at all-time lows and national retailers have invested in their best stores to spruce up offerings,"
http://www.racked.com/2016/8/2/12290506/american-malls-south-coast-plaza

Adidas Relies On Stars Not Soccer Teams To Sell Product

Adidas, Nike Inc. and Puma SE are relying more on individuals to sell cleats and jerseys during the monthlong Euro 2016 tournament, the year’s top event for the biggest sports-gear suppliers that starts on Friday. Adidas, roughly tied for market share with Nike in the $5 billion global soccer-gear market, is banking on top players’ ability to reach fans directly and shifting a larger part of its $2.7 billion annual marketing budget toward them compared with the big team sponsorships that defined its past.
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Campaigns built around individual stars also let the brands get their message to kids in a more controlled fashion than they can through decade-long club associations, at a time when fast-changing tastes mean kids want new colours and designs every couple of months.
http://www.businessoffashion.com/articles/news-analysis/adidas-relies-on-stars-not-soccer-teams-to-sell-product

Pomellato, Beyond Milano

Pomellato is decidedly young, in both age and outlook, for a fine jewellery house. Its signature of colourful semi-precious stones or “alternatively precious,” in the lingo of the company, cut in large unusual shapes, such as squares — an unconventional move in the fine jewellery market, where rubies, diamonds and emeralds are integral to the output of most houses — has made Pomellato unique.

 In 2013, Kering (then PPR) took an majority stake in the Pomellato Group, which comprises the Pomellato brand and Dodo, a more accessible Italian jewellery line, with the explicit aim to “step up the pace of its growth and expand its geographic footprint,”
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Market sources estimate the company drove sales of between €200 million and €220 million in 2015.
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Pomellato will benefit from the experience Kering has gained in branded jewellery with Parisian jewellery house Boucheron, which was acquired by Gucci Group in 2000.

http://www.businessoffashion.com/articles/intelligence/pomellato-kering-fine-jewellery-brand-grows-beyond-milan
http://www.pomellato.com/wx

Op-Ed | Data Alone Can’t Decode the Fashion Consumer

Adding this level of personalisation has a significant impact. Thirty-five percent of what consumers purchase on Amazon comes from product recommendations based on algorithms, according to McKinsey & Co.

http://www.businessoffashion.com/articles/opinion/data-alone-cant-decode-the-fashion-consumer
http://www.mckinsey.com/industries/retail/our-insights/how-retailers-can-keep-up-with-consumers

How Newspaper Supplements Took On Fashion Magazines

Fashion and luxury supplements — the glossy, advertisement-heavy magazines that are distributed free as part of a newspaper — are thriving. Over the last decade, supplements such as T: The New York Times Style Magazine, WSJ. at The Wall Street Journal, and How To Spend It at The Financial Times, have bucked the depressing trends in print media, by consistently growing their advertisers, upping their page-counts, rolling out more editions and making a profit.

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Supplements also have key advantages over fashion magazines. First, there’s the audience. Newspapers have a bigger readership than monthly glossies: American Vogue's total average circulation for each monthly issue is 1,237,939, while American Elle's is 1,125,536 — The Wall Street Journal’s daily circulation is 1,392,470.

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More importantly, the readership of premium newspapers are luxury customers.

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“The DNA of magazines is the same as the DNA of luxury products: to make beautiful objects and reflect a certain amount of intelligence.”

http://www.businessoffashion.com/articles/intelligence/how-newspaper-supplements-are-beating-fashion-magazines-at-their-own-game

http://howtospendit.ft.com/ 

 

Super Shrink Me: The Rise of the Mini Handbag

In the last decade, luxury handbag prices have skyrocketed. Now, brands are making smaller versions of iconic styles to win back aspirational consumers.

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  A Boston Consulting Group study of seven major luxury brands found that, from 2002 to 2012, the prices of their handbag offerings increased by an average of 14 percent each year.

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Brands such as Gucci, Givenchy and Dior also offer their most iconic styles in micro, nano and toy sizes, for a fraction of the original price. The toy edition of Saint Laurent’s Sac du Jour costs $1,350, compared to $1,990 for the mini version and $2,750 for the original.  

http://www.businessoffashion.com/articles/intelligence/super-shrink-me-the-rise-of-the-mini-handbag

In Japan, Luxury Flourishes While Economy Flounders

Japan has been a consistent champion in the global market for luxury goods. In 2015, Japan was the second-largest luxury goods market in the world, worth €20 billion (about $22.7 billion), according to data provided by consulting firm Bain & Company. In 2015, the nation’s luxury goods market grew 13 percent at current exchange rates (9 percent at constant exchange rates).

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Last year, 19.7 million overseas tourists landed in Japan, according to the Japan National Tourism Organisation. About 5 million were from China — an increase of over 100 percent on the previous year. And they came to shop: of the record-breaking ¥3.48 trillion (about $31 billion) spent by foreign visitors in Japan last year, Chinese people accounted for 40.8 percent.

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According to the New World Wealth APAC Wealth Forecast, in 2015, Japan had 1,260,000 high net worth individuals (individuals with net assets of $1 million or more), more than twice as many as China (654,000).  

http://www.businessoffashion.com/articles/global-currents/in-japan-luxury-flourishes-while-economy-flounders

Burberry Aligns Runway and Retail Calendar in Game-Changing Shift

In a radical rethink of the fashion calendar, Burberry will combine its men’s and women’s shows together in two annual runway events, with ‘seasonless’ collections available to buy immediately after the shows.

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 The new collections will be “seasonless” and branded “February” and “September” rather than Spring/Summer and Autumn/Winter, nomenclature conceived with an eye towards global consumers who live in non-Western markets with different climatic patterns.

http://www.businessoffashion.com/articles/news-analysis/burberry-aligns-runway-and-retail-calendar-in-game-changing-shift 

 

Do ‘Digital Flagships’ Deliver?

Fashion brands must deliver an online shopping experience as luxurious as their physical flagships. Who's hitting the mark?

The top three brands and retailers by physical touch points are Fendi, Cartier and Louis Vuitton, while the top three by digital touch points are Balenciaga, Net-a-Porter and Saint Laurent.

http://www.businessoffashion.com/articles/opinion/do-digital-flagships-deliver 

Fashion Feels the Force of Star Wars

Fashion brands and retailers are battling for a share of the $5 billion in product sales that 'Star Wars: The Force Awakens' is projected to generate over the next year.

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According to market research firm NPD Group, Star Wars has generated more than $32 billion in merchandise sales since the release of the first film in 1977. This far exceeds comparable estimates for Harry Potter ($25 billion) and James Bond ($8 billion), according to The Telegraph. Unlike Star Wars’ broad appeal, most of the merchandising around Harry Potter has been geared toward children, while Bond has focused on the luxury market, tapping labels such as Tom Ford and Omega for costumes and collaborations.

http://www.businessoffashion.com/articles/intelligence/star-wars-fashion-merchandise
http://www.kay.com/en/kaystore/searchterm/star%20wars/true/star%20wars

Petra Flannery, Stylist to the Modern Stars

Top spot on the Hollywood Reporter’s list of 2015’s Most Powerful Stylists.

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Flannery represents a new generation of celebrity stylists, as essential to a brand’s success as the image-makers on the campaign set and backstage at its runway shows.

http://www.businessoffashion.com/articles/creative-class/petra-flannery-stylist-to-the-modern-stars

 

Why Asia’s Brightest Stars Struggle to Shine

Fashion weeks in Tokyo, Shanghai and Seoul showcase some of Asia’s most promising fashion talent, but many still lack global visibility.

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Last month, across Tokyo, Shanghai and Seoul, more than 200 Asian brands invested in staging a catwalk show. Yet most designers showing at Asia’s three most important fashion capitals are not recognised outside of their respective national markets.

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“I’ve noticed an emphasis on inviting international “fashionistas” with large amounts of Instagram followers [to Tokyo Fashion Week]. This can reach a large audience but is that the right demographic to be targeting?” asks Dan Bailey of the Japanese fashion blog Tokyo Dandy. “Each [Asian fashion week] is focused on its own domestic businesses,” he continues, suggesting that Asian fashion weeks are in need of a pivot toward the global market.

http://www.businessoffashion.com/articles/intelligence/why-asias-brightest-stars-struggle-to-shine 

The Race to Control the Luxury Leather Business

 As more fashion labels push into the accessories business, luxury titans like Kering, LVMH and Hermès jockey for control of a leather market in flux.

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According to Exane BNP Paribas, in 2014, the global market for luxury leather accessories grew to represent almost 30 percent of the overall personal luxury goods market, up from 18 percent in 2003.  

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Indeed, Bain puts the 2015 global market for luxury leather accessories at €43 billion (about $46 billion at current exchange rates).

But along the way, this boom in business has stretched the supply of luxury-quality leather to breaking point.
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Currently, leather of the quality needed by luxury houses can only be sourced from Europe
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Meanwhile, accessible luxury brands, such Michael Kors, Kate Spade and Tory Burch, have taken market share from high-end labels. Meanwhile, Michael Kors' share in the leather goods market has grown from 1 percent in 2008, to 6 percent in 2013. Megabrands have fundamentally abandoned the €500 (about $535) price point, according to Exane BNP Paribas.
http://www.businessoffashion.com/articles/intelligence/the-race-to-control-to-the-luxury-leather-business

In Fashion Media, 'Church and State' Dissolves

In theory, fashion magazines have always adhered to the “church and state” divide, meaning the commercial and editorial arms of a publishing house were kept separate to protect the editorial independence of its reporting. In reality, the boundary has been blurred for some time.

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Most newspapers package up their fashion content in a supplement, an often-weekly magazine sold as part of the overall paper. But fashion supplements, whose interviews, trend pieces and articles are typically punctuated with advertisements for major fashion and luxury companies, are sometimes regarded as a “cash-cow” for the main publication, and less committed to a journalistic code of ethics.

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This year, Condé Nast launched 23 Stories, a new division dedicated to creating content for advertisers, which enrols editors from its publications to do so.  

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“It’s funny, the lines are so blurred now that we can do a post endorsing something we love just because we love it, and readers will sometimes say, ‘Nice sponsored post guys,’” says Stella Bugbee. “I think readers don’t trust anyone anymore."

http://www.businessoffashion.com/community/voices/discussions/how-can-fashion-media-best-blend-editorial-integrity-with-commercial-interests/in-fashion-media-the-church-and-state-divide-dissolves 

 

Money Well Spent? Why Fashion Companies Spend Big on Lobbying Governments

The Trans-Pacific Partnership (TPP) would eliminate tariffs on textiles and apparel between 12 nations, including the US — the world’s largest consumer of apparel — and Vietnam, the third largest emerging market apparel supplier after China and Bangladesh. In 2014, US companies paid $400 million in tariffs on shoes imported from TPP countries, according to the Footwear Distributors and Retailers of America.

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This year, driven by the TPP, fashion companies have spent big on lobbying. In the first half of 2015, the National Retail Federation spent $3 million on lobbying the US government; Target, $770,000; JC Penney, $410,000; Gap, $160,000, according to US Federal Lobbying Disclosures.
Compared to the sums spent by an industry like pharmaceuticals, this is small change. (According to the Center for Responsive Politics, 10,616 lobbyists have spent nearly $1.63 billion this year.)
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Still, corporate lobbying isn’t always successful.
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The Design Piracy Prohibition Act (DPPA) would have given designers three years of intellectual property protection if they registered a new design within six months. The CFDA hired two lobbyists, one with ties to each political party, and the bill gained bipartisan support, including from high-profile senators such as Hillary Clinton. Designers including Zac Posen and Narciso Rodriguez argued the case in Washington. However, it still failed to pass.
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“Creating legislation from scratch, to benefit a specific industry, that is a much more difficult challenge,” explains Susan Scafidi, academic director of the Fashion Law Institute at Fordham University, who helped draft the proposed design protection bill. “Because you have to develop the interest in creating any regulation at all.”
http://www.businessoffashion.com/articles/intelligence/money-well-spent-why-fashion-companies-spend-big-on-lobbying-governments

Inside Balmain's Digital Revolution

March 20, 2015

Balmain is a brand on the rise. Since Olivier Rousteing was appointed creative director in 2011, the young designer has overseen a digital revolution at the historic French house.  

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However, it is the even wider reach of Rousteing’s ‘Balmain army’ — Kanye West, Kim Kardashian-West, Rihanna, Rosie Huntington-Whitely and a score of other instantly recognisable, Insta-famous figures — that has enabled Balmain to raise its global brand awareness, reaching a new, young audience, quite different to the house’s ‘Jolie Madame’ roots.
Together, they reach more than 47 million followers, dwarfing the official Instagram sites of brands like Chanel and Givenchy which have 3.3 million and 1.8 million followers, respectively. Balmain currently has 1.2 million followers on its official Instagram.
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Instagram  ... It is stronger than magazines, you are not buying your audience, you don’t have to be a big advertiser”.
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The Balmain business is, still, relatively small, with revenue of over €30 million in 2012, growing about 20 percent per year. 
http://www.businessoffashion.com/articles/video/bof-exclusive-balmains-social-media-driven-retail-rollout

WME-IMG Debuts All-Fashion Network for Apple TV

Made2Measure is the first network of its kind, offering wall-to-wall fashion programming. Will it work?

Can fashion not only make for good television, but populate an entire network? That’s what executives at entertainment conglomerate WME-IMG are betting on with Made2Measure, a digital network dedicated solely to fashion, which launches today.  

http://www.businessoffashion.com/articles/intelligence/wme-img-debuts-all-fashion-network-for-apple-tv