Luxury in a tough but cool climate
PARIS – The world of fashion came together in the French capital recently, with top players sharing thoughts on a troubled, yet confident, industry. «Fashion 2003: Luxury in a Cool Climate,» the third consecutive conference on fashion organized by the International Herald Tribune (IHT), took place at the George V Four Seasons Hotel on December 4 and 5. Suzy Menkes, the IHT’s authoritative fashion editor, opened the two-day event speaking about the ongoing rounds of «musical chairs» in an «industry so dependent on so few people» – pointing to the upcoming departures of Domenico De Sole and Tom Ford from Gucci Group next year. This, she said, also underlined the notion of the family versus the corporation. Rosita Missoni (who together with Tai Missoni founded the colorful world of Missoni in the 1950s) came to the Paris convention with daughter Angela and son Luca (creative director for womenswear and textile designer, respectively). Rosita spoke about having lost interest in fashion in the 1980s, at which point Angela entered the family business and began working on her own, and then on the women’s collections. «Versace is not for sale,» said Santo Versace, brother of the late Gianni and president and CEO of Gianni Versace SpA – disclosing, however, that in 1997, the Versace family was about to enter into a partnership with Gucci. The deal fell through following the assassination of Gianni in Miami. (Even before his brother’s untimely death, said Santo, their sister Donatella had already been designated as creative successor, heading Versus since 1989.) And yes, it’s true, said Santo, he had slashed Gianni’s credit cards! Simon Burstein, vice president of the Sonia Rykiel Group, noted that top management, including family, has to be accountable – Burstein is married to Nathalie Rykiel, Rykiel’s artistic director and the daughter of Sonia. One of few independent French companies today, Rykiel draws on a rich past. The house recently opened a Rykiel Woman boutique on the Left Bank (rue de Grenelle) – a contemporary boudoir, whose products range from cashmere to erotic accessories. «Fashion is about capturing a moment,» noted Burstein, adding that when it comes to company decisions, «the final say is Sonia’s.» Umberto Angeloni of Brioni (clients include James Bond) noted that one of the main drawbacks of family businesses is the mismanagement of managerial talent – some people are overused, or not used enough – while in some cases, family members are not fully accountable. «Luxury is more individual than collective,» claimed Christian Blanckaert, chairman and CEO of Hermes Sellier, the main subsidiary of the Hermes Group. The prestigious house, which has now gone public (with 80 percent still owned by the family), has invited designers such as Martin Margiela (previously) and Jean-Paul Gaultier (currently) to work on its apparel collections. In a vivacious speech, Blanckaert spoke about keeping a frenetic schedule in order to be profitable: «Who remembers that it took Yves Saint Laurent 15 years to make money?» he asked, adding, «We are not in the business of luxury, but in the business of seduction and gourmandise.» Seducing a new generation of clients lies behind the reinvention of Christian Dior. In a televised interview with Menkes, Sidney Toledano, the chairman and CEO of Christian Dior Couture, explained how giant LVMH (Moet Hennessy-Louis Vuitton) removed licenses while expanding the business through accessories. Success also came through the «Taming of John Galliano,» said Menkes, referring to the former enfant terrible now responsible for all Dior womenswear, including accessories. Toledano commented on the importance of haute couture, stressing that it lies at the heart of the Dior spirit. Meanwhile, with Dior sales having tripled since 1999, Toledano said that growth continues, especially in markets such as Japan, followed by Korea, China and the United States. «Our designers are our main asset,» said Toledano of Galliano and Dior’s menswear designer Hedi Slimane. «They lie at the heart of the company.» Michael Zaoui, managing director and head of mergers and acquisitions Europe for Morgan Stanley, had good and bad news. He wondered whether the crisis was over, following start-up disasters, 9/11, Enron, SARS and Iraq, and asked, «What if Japan stops buying?» The good news, on the other hand, included China becoming a member of the World Trade Organization, designers getting their name on the door (such as Stella McCartney and Marc Jacobs) and tax cuts in the United States. Lessons to be drawn, according to the top analyst, were that growth is not unlimited; private ownership can be good in rough times; multi-brand strategy is under scrutiny; the strength of a brand is not enough; and lastly, that the business is personal. When the Phillips-Van Heusen Corporation paid $430 million for Calvin Klein last year, this included an empire of apparel, jeans, fragrances and underwear. «The brilliance of Calvin is that he built an institution,» said Bruce J. Klatsky, chairman and CEO of Phillips-Van Heusen, adding that Klein is getting 1 percent of royalties. «He is very available, and is intimately involved in the company doing well.» Searching for talent is Concetta Lanciaux’s job. As adviser to the chairman and executive vice president synergies at LVMH and president of LVMH, Italy, Lanciaux visits schools and attends competitions in search of new creative voices. While LVMH backs young designers (through festivals or financing collections and education) where does the giant locate its managers? «Ten years ago this was a critical problem,» said Lanciaux. «Today, 60 percent come from within the group.» One of the challenges in the field, said Lanciaux was finding the right match between a designer and a top executive. What makes brands successful? «Clarity, consistency and leadership,» said Rita Clifton, chairman of Interbrand. This is the case of the revamped Pringle. Established in 1815, Pringle of Scotland was a family-owned business for over 160 years – until three years ago. «When we bought the company, our factory was not even making Pringle cashmere,» said Kim Winser, Pringle’s chief executive. «We began exploring our history and came up with fascinating stories.» The company that invented the twin set, argyle patterns and had registered the term knitwear, had lost its identity. With the launch of a new men’s and women’s fashion, mixing heritage with modernity, Pringle today is about «adding fun to integrity.» Sometimes the power of the brand transcends boundaries. Marketing research has shown that the Mercedes Benz logo is more recognizable than the Christian cross, for instance. «The key phrase here is enduring passion,» said Justus Schneider, director of worldwide marketing communications for Mercedes Benz. For the company that invented the luxury car, the present is about forging creative relationships, such the one with Giorgio Armani, who adds his touch to the new SLK with leather interiors. It is also about vision and values that are relevant from the CEO to the assembly line and creating new products when least expected. Once described as «the coolest man on earth,» Tyler Brule offered his version for brand success, citing relevance, reach, restoration, reliability and respect (who is allowed to get the product). CEO and creative director of Winkcreative – past and present clients include Prada, Stella McCartney and Adidas, among others – Brule launched Wallpaper* in 1996. Is there room for more brands out there? «Airlines, rail, property development, less obvious logos in established names and why not a premium news service?» he said. What is the lowest price of luxury? For Mercedes Benz the A Class became a boundary, while for Dior, a 12-euro bracelet opened the luxury gates. And the highest price to pay? That question might be answered next year.