A new code of ethics in luxury

MOSCOW – The emergence of a new code of ethics, the role of past and present Russia as well as the good times that lie ahead, lay at the heart of a conference organized in this monumental city by the International Herald Tribune. «Supreme Luxury,» held at the city’s freshly constructed Ritz-Carlton from November 28-29, brought together leading industry players in a high-flying event orchestrated by the International Herald Tribune’s fashion editor Suzy Menkes. Keynote speaker Bernard Arnault, whose LVMH (Moet-Hennessy Louis Vuitton) empire comprises some 50 brands in 70 countries, brought up a sore industry subject. «Fakes fund crimes and have real victims,» said Arnault, adding that besides counterfeit production and distribution, recent research points to increasing social acceptability when it comes to buying knockoff brands. Dubbed the «king of luxury,» Arnault predicted a bright future for the sector, with global spending reaching some 300 billion dollars in the next five years. While emerging markets – such as Russia, India and China – will be consuming one-third of luxury products in the next decade, he said, a more humanitarian approach will be essential in the more mature markets. Seasoned luxury consumers are now going from «ostentation» to «discretion,» noted Arnault, adding that the industry is developing new ethics, a «greener» approach in which optimizing natural resources will be decisive. «Supreme luxury scares me,» announced Tom Ford – clad in Tom Ford. «Luxury,» said the former Gucci and Yves Saint Laurent designer, «has gone from sublime to ridiculous» from «hard to find to hard to miss,» it has even been «bastardized» at times. While the industry is not in danger, he said, it needs to be on its feet and start treading in a new direction. Ford pointed out the importance of service, on the one hand, as well as the fact that consumers are now willing to pay more for products that don’t harm the environment. The designer, who plans to open 18 Tom Ford stores by next spring and 100 stores worldwide within the next 10 years, noted that he is already working on eco-friendly resources and products. Rapidly emerging environmental concerns were also raised by Yves Carcelle, president of Louis Vuitton. The French luxury brand, he said, is currently donating to Al Gore’s Climate Project and Mikhail Gorbachev’s Green Cross International (the latter is one of the celebrities in a highly publicized Louis Vuitton ad campaign) having participated in a City of Paris bicycle campaign recently. Besides good causes, the luxury giant is a reflection of the industry’s creative past and present: Carcelle pointed to the familiar 1896 two-colored Louis Vuitton monogram, given a 33-color spin by Takashi Murakami in 2003, as well as the company’s modern-day art patronage linking fashion and architecture through collaborations with people like Peter Marino and Olafur Eliasson. Carcelle also referred to Louis Vuitton’s clear business strategy: no licenses, no franchises, no distributors, no sales. Christian Dior’s first visit to Russia at the age of 26 preceded the establishment of his couture house. Since that first time, the relationship between the French fashion powerhouse and the country has flourished: Mrs Nikita Khrushchev sat front row at a collection in Paris in 1960; Dior patterns were acquired for Russian seamstresses; Christian Dior fragrances were sold in Russia beginning in the 1970s and, more recently, Dior’s John Galliano was inspired by the Ballets Russes in 2002. Dior’s successful journey from an haute couture house to a global brand was traced by company CEO Sidney Toledano. By terminating license agreements, bringing in Galliano and other creative folk and working on «the power of iconic products,» such as the 1996 Lady Dior, the company focused on developing and maintaining quality, including service – Russian staff get trained in Paris said Toledano. «Dior has to be everywhere,» he noted, while also making an ethical remark on the need for less skinny models on runways. A four-hour lunch between CEO Angela Ahrendts and creative director Christopher Bailey sealed the fate of a new chapter in the life of Burberry – a brand born in 1856. Following the departure of former CEO Rose Marie Bravo, Ahrendts was eager to use Burberry’s cross-generational appeal to create what she called in Moscow «a single brand point of view.» Along with Bailey (the duo had previously worked together at Donna Karan), they set out to make the brand’s core asset, outerwear, more exciting and fashionable and upgrade sportswear. With Bailey now officially named designer, outerwear accounts for half of the runway collections, while the brand’s ubiquitous house check has turned gigantic and cut at the bias on bags. The image of Burberry, which featured relaxed yet sophisticated English countryside living a few seasons ago, has now been given a much edgier spin. With 520 doors in over 80 countries, the house of Salvatore Ferragamo has been a global luxury player for a while. Established in Florence in 1938, taking on New York in 1948, Tokyo in 1991, Shanghai in 1996 and Moscow this year, the illustrious brand is perpetually looking at expansion. CEO Michele Norsa quoted Korea as its fourth-largest market, while noting the great potential for growth in China and Russia, Ukraine and Azerbaijan, among others. Norsa also discussed the importance of today’s air travelers and how luxury brands should reach them wherever they may be. While travel is a functional necessity, buying travel apparatus is «an emotional choice.» The exciting creative revamp of American specialist Samsonite was discussed by CEO Marcello Bottoli. «Life’s a Journey» is the motto here, with Bottoli referring to the brand’s nearly 100-year history. While building on brand heritage, the private equity-held company is bringing in fresh – and provocative – ideas for its Black Label collection, via designers such as Alexander McQueen and – coming up – Viktor & Rolf. At the same time, Samsonite is introducing catwalk presentations as well as entering footwear, eyewear and watches. Is a success story better than one of failure? Bruno Salzer, CEO of Hugo Boss, talked about how the company lost no less than 56 million euros when its womenswear failed to capture the hearts of international consumers. In the last year and a half, however, the German brand has picked up speed, locating a new spirit of Hugo Boss for women through the likes of Princess Mary of Denmark and Sharon Stone. Luxury is not affected by financial upheaval such as the US housing crisis, noted leading analysts. According to Roberto Vedovotto (Lehman Brothers), Melanie Fouquet (JPMorgan) and Franck Petitgas (Morgan Stanley), luxury consumers in emerging markets represent 18 to percent 20 of the world market, major luxury brands are investing and aggressively pursuing business opportunities in developing markets, small luxury names are creating niches, accessible luxury is growing and private equity buyers are going into luxury goods. It’s a merry time to invest and grow said the analysts, in an industry in which, according to Arnault, consumers «have come to expect the unexpected.» Russia: Riches to rags and back The sweet face of Natalia Vodianova welcomed conference delegates in Moscow. The 25-year-old supermodel’s rags-to-riches story seems to embody the new Russian dream: Scouted while selling fruit in industrial Nizhniy Novgorod, her hometown, Vodianova left her single mother and disabled sister at home, going on to build an international career. In her noble efforts to bring something back to her native land, mother-of-three Vodianova has established the Naked Heart Foundation as a vehicle for the construction of playground facilities all over Russia. The richness and opulence of old Russia was noted by Suzy Menkes, the conference’s heart and soul. Today, Russian luxury clients represent 4 percent of sales of quoted by companies. «The speed of change,» noted Menkes, points to the «awakening of something that was dormant but never went away.» While the first Hugo Boss suit was officially sold in Russia in 1991, Burberry is opening its third Moscow outlet in February next year. «Russians are shopping with energy, not asking the price,» noted Louis Vuitton’s Yves Carcelle, while Ferragamo’s Michele Norsa said that while the Russians are top spenders in Europe for luxury shoes, the price gap leads them to do lots of shopping abroad. Francois Le Troquer, Cartier’s man in Russia, spoke of the rising demand for luxury in Ukraine, Azerbaijan, Georgia and Armenia. «Russian women get fashion fast,» said Donatella Versace, who first visited Russia in 1991. According to the designer, the bling factor has evolved, much like she has herself in the family business since she took over following her brother Gianni’s assassination in 1997. Similarly to Russian women, Versace said she has found her own style without moving away from the brand’s DNA, namely glamour and sensuality. A big fan of Russian models, Versace’s advice to young Russian designers is to «look into their culture.» Three pioneering Russian women gave their own account of a rapidly changing Russia. «Women are ready to build their careers and bodies. Our women would like to win,» said Olga Sloutsker, who opened her first World Class gym in 1993. She now runs an empire of 31 gyms, having single-handedly initiated an affluent Russian clientele to the benefits of exercise. Waiting behind closed doors never deterred luxury fashion importer Alla Verber from achieving her dreams. A Saint Petersburg native who spent a year in Rome at 18 before emigrating to Canada, Verber was back in Russia in the early 1990s negotiating the installment of brands such as Gucci and Dolce & Gabbana. Verber, vice president of Mercury Distribution, was also behind the transformation of former Soviet department store TSUM into a luxury brand haven. «Russia is unrecognizable from 10 years ago,» said Aliona Doletskaya, the editor-in-chief of Russian Vogue. While the publication sought to take on an educating role initially, readers are now «thirsty for everything,» focusing on their careers and spreading throughout the country. Mikhail Kusnirovich, chairman of the board of the Bosco di Ciliegi group of companies, is a man with a grand luxury vision. Gum, for instance, the landmark Red Square department store which Bosco controls, was described by Kusnirovich as the ideal home for international brands. Above all, the Russian luxury businessman mentioned «the pleasure in the details,» «a personal touch» and «the freedom of choice.» Beyond fashion, the Bosco group is a general partner of the Russian Olympic Committee in view of the Sochi 2014 Winter Games, as well as a patron of the arts through joint projects with institutions such as the Pushkin Museum. Turning everything upside down (including his logo), subversive Denis Simachev is Moscow’s favorite bad boy of fashion. Besides his ironic take on Soviet history, Simachev is known for placing Vladimir Putin’s face on high-end T-shirts, even before Russia’s most powerful man took over the Kremlin. Simachev’s store, Agent Provocateur, is also a bar featuring an assortment of elements from the bathroom, while the 5-year-old brand is ready for local and global expansion. The words of Valentin Yudashkin, a popular Russian designer whose brand is based on the Parisian model of couture, ready-to-wear and accessories, summed it all up: «Twenty years ago we couldn’t talk about luxury here.» Fur factor: A serious moneymaking machine For the first garment in human history, Russia has long been a key market. Take the venerable house of Fendi, for example, where the family tradition for fur, also known as «soft gold,» led female clan members to stun a male-dominated industry by attending fur auctions in Leningrad in the 1950s. In 1965, the Fendi sisters started collaborating with Karl Lagerfeld, while fur went from a status symbol to an exercise in craftsmanship – from La Scala attire to skiing companion. «I view it with reverence, but I also like to mistreat it,» said Silvia Venturini Fendi, of fur. While coordinating the design of all Fendi products, she is credited with designing the brand’s «it» bag, the Baguette, 10 years ago. Venturini Fendi also described the Italian house as a pioneer in design, combining mink shreds with leather, mixing fur with plastic and dyeing fur for the first time. «If it’s good enough for royalty, it’s good enough for me,» said Welsh fashion designer Julien Macdonald of fur, adding that «it is a serious moneymaking machine.» The designer noted that high demand for his fur designs saved his business – he is now working with new financial partners and developing more sexy and glamorous fur coats for the Russian market. Macdonald was part of a round-table discussion alongside New York-based French fur couturier and J. Mendel CEO Gilles Mendel and Russian designer Igor Chapurin. Mendel, who later in the day inaugurated his first outlet in Moscow, spoke of mixing fur with snake, leather and crocodile, while Chapurin noted that he’s always happily surprised to see his fur experiments worn by his clients. «In Russia, fur is a necessity and a luxury,» he said. «For women, however, it still remains magic.»