Department Stores Battle for Manhattan | Intelligence | BoF NEW YORK, United States — Two down, two to go. In February 2016, Barneys New York opened its 58,000-square-foot Chelsea flagship in the hopes of wooing the city’s tech elite working just blocks away at companies like Google and IAC/InterActiveCorp. This past week, Saks Fifth Avenue made an even more aggressive move, cutting the ribbon on an 86,000-square-foot flagship in Brookfield Place, an upscale mall near the financial district. These two stalwarts of American luxury retail have also made significant upgrades to their existing New York locations, with Saks continuing its Fifth Avenue refresh through 2019. Bergdorf Goodman, too, opened its renovated main floor to the public on September 6, marking the latest step in a five-year overhaul. But it's the coming of Neiman Marcus and Nordstrom — slated to open their first New York locations in 2018 and 2019, respectively — that will truly kick off a multi-sided battle for Manhattan. Of course, all these new stores need shoppers.
Prada Shares Surge as Chairman Forecasts Improvement in 2017 | News & Analysis | BoF MILAN, Italy — Prada SpA shares rose as much as 15 percent after Chairman Carlo Mazzi forecast that the Italian luxury-goods maker will return to growth in sales and earnings next year, helped by cost-cutting and online expansion in Asia. This year “is a turning point and we are now firmly on the path to sustainable growth in revenues and earnings from as early as 2017,” Mazzi said on an Aug. 26 conference call after the Hong Kong market closed. First-half earnings before interest, tax, depreciation and amortization fell 25 percent to 330 million euros ($370 million), dropping slightly less than analysts estimated. Prada said it’s doubling its e-commerce sales over the next two years by increasing the number of categories it offers online, particularly shoes, and expanding its social media activities. Revenue for the six months ended July fell 15 percent to 1.55 billion euros on weak demand in China and a drop in tourism in Europe after terrorist attacks.
Cartier’s $600,000 Watch Shows Risks of Extending Luxury Brands | News & Analysis | BoF GENEVA, Switzerland – For over a century, Cartier has sold elegant, if simple, timepieces such as the Tank, which starts around $2,500 – affordable by Swiss watch standards, and never confused with the level of technical finesse from brands like Patek Philippe. Then a decade ago, Cartier sought to prove its own prowess, investing millions to build one of Switzerland’s largest watch factories and bringing in an industry veteran to head a fine watchmaking unit. The jeweller delved into the segment for connoisseurs known as “complicated pieces,” which sport analog mechanisms such as calendars that adjust for leap years and require painstaking hand craftsmanship. But then the Chinese demand that had supported the market collapsed. “Cartier has a very classic style, and that alone is already perceived as a status symbol,” said Manfred Abraham, a partner at consultancy BrandCap in London. ‘Blinded By China’ “Cartier was blinded by the boom in China,” Pusz said.
How American Eagle Dodged the Teen Retailer Trap | Intelligence | BoF PITTSBURGH, United States — For its first global advertising campaign, American Eagle isn’t relying on the typical teen-retail tropes to send its message. You won’t find fresh-faced, unreasonably tanned models running on the beach or palling around a campfire. Instead, the Pittsburgh-based company appears to be focusing on that uniquely millennial mix of individuality and collectivism, enlisting fashion industry cool-kids like photographer Cass Bird and stylist Sara Moonves to capture a cast of young influencers, from actress Hailee Steinfeld to musician Raury, in black-and-white portraits. Each image is tagged with both #WeAllCan and a personal declaration. Troye Sivan and Xiao Wen Ju in American Eagle's #WeAllCan campaign | Source: Courtesy “So many brands market to this customer in a canned, pre-packaged way. American Eagle, by contrast, is enjoying its eighth consecutive quarter of revenue growth. A change in management certainly seems to have given American Eagle a boost.
The Rich Don't Drive the Luxury Sector | Opinion | BoF LONDON, United Kingdom — If luxury spending was indeed driven by the rich, the luxury industry would be a niche sector serving a fortunate few, rather than a dynamic, global business selling to a consumer market measured in millions. During the past 50 years, a wave of luxury goods consumption has swept across key geographies in the world, moving from Europe to the USA in the 1970s, then Japan in the 1980s, Russia in the 1990s and, in the last 15 years, spreading across Greater China. In each case, the underlying mechanism that has fueled demand for luxury goods has been the same: the emergence of newly created wealth. New ideas, liberalisation, free trade, higher liquidity and investment all bring new opportunities for economic growth. How better to define their new identity than by possessing things other people don’t have. In short, the newly rich pour money into the luxury industry and are the powerhouse of its growth.
Luxury Makers’ Dubious Dividends Make Them Target for Shorts | News & Analysis | BoF PARIS, France — Higher dividends at a handful of struggling posh-product makers are a luxury they may not be able to afford. So goes the bear case on companies such as Richemont and Tod’s SpA, both down more than 20 percent this year and both still squarely in the sights of short sellers. Lingering expectations that they will raise dividends even after reporting declining sales are attracting bearish traders. “Despite the softening of their business in some of their key-growth markets, these companies are still growing their dividends,” said Simon Colvin, an analyst at IHS Markit Ltd. in London. “It doesn’t take a lot for the dividend to become unsustainable. You have to be very wary as a dividend investor — that high yield sometimes carries risk.” The industry has suffered from slowing Chinese demand, while terror attacks hurt tourism and travellers’ spending on luxury items. By Roxana Zega; editors: Cecile Vannucci and Matthew Boyle.
Fashion industry told to end its quest for ‘unattainable thinness’ | Fashion The Women’s Equality party is to launch an unprecedented campaign aimed at radically changing the way the fashion industry treats body size and shape. Coinciding with London fashion week, which will run from 16-20 September, the initiative will call for an end to unrealistically small “sample sizes” – the sizes in which designers show their new creations – and demand a minimum body mass index (BMI) for models. Sophie Walker, the WEP leader, plans to ask the London mayor, Sadiq Khan, to withdraw funding for next year’s fashion week if the campaign’s key demands are not in place by then. She will also ask Maria Miller, chair of the Women and Equalities Commission, to hold a public hearing in which fashion designers will be asked why their clothes are based on “an unattainable level of thinness in women”, which Walker believes is contributing to a crisis in public health with an economic impact of £1.3bn a year.
How Burberry is Operationalising 'See Now, Buy Now' | Intelligence | BoF LONDON, United Kingdom — Burberry will unveil its first ever “see now, buy now” show at London Fashion Week today, heralding a new era for the industry in which fans can get their hands on "seasonless" items immediately after they are presented on the runway. But the new approach has significant implications for production and supply chains, which were out of sync with communications and marketing departments, and all eyes remain on the brand to see how it has executed the changes needed to adapt towards a fashion immediacy model. When the company announced its new consumer-facing concept in February, it was held up as a solution to long-standing problems with the traditional fashion calendar. Fashion shows had long been strictly industry events for press and buyers to preview collections. The innovative concept ignited a new chapter for the global fashion industry. If any brand can make it work though, it is Burberry. Designing Sampling Burberry's latest campaign | Source: Courtesy
Here’s a sneak peek at the new Saint Laurent It’s now been five months since Saint Laurent announced the departure of its creative director of three-and-a-half-years, Hedi Slimane, and the appointment of his successor, Anthony Vaccarello. Now, less than two weeks before the Belgian-Italian designer’s debut runway show for the house, Saint Laurent has unveiled its new ad campaign. Shot on the banks of the Seine by Dutch photographic duo Inez Van Lamsweerde & Vinoodh Matadin, the ad stars Polish model Anja Rubik. For those familiar with Vaccarello, this casting choice will come as little surprise – Rubik is a longterm friend and muse of the designer’s. Speaking of Rubik in a 2014 interview with Dazed, Vaccarello said, “She has that sense of style that most women don’t have. She knows exactly what is good for her, what is good on her. This feeling is entirely repriocal – in fact, in the same interview Rubik recalls her first encounter with the designer. Stay tuned for coverage of Vaccarello’s Saint Laurent debut.
suits you! how today’s design talents are crafting the tailoring of tomorrow Gosha Rubchinskiy's show for spring/summer 17 at Pitti Uomo began with a triptych of boys marching through the Fascist architecture of a Florentine tobacco factory. The first two boys were shirtless, the second had a thick chain around his neck. All three are dressed in dark, subtle suits and, consequently, Instagram breaks before our eyes. Arguably it wasn't an unexpected strategy for Gosha to introduce tailoring for Pitti, but certainly, in its immediate impact, it felt like a sensational gesture for a Russian designer so entrenched in the sportswear-and-tracksuit aesthetics of post-Soviet youth. After all, what does streetwear try to do, if not to distance itself from the tailored uniformity of the professional, or his antipode, the school kid? By no means does a suit simply mark a new maturity in the Gosha muse, or the closing chapter of his bildungsroman. Wales Bonner spring/summer 17. Age groups are open systems. Raf Simons spring/summer 17
Richemont, Hermès Slump as Gloom Deepens in Luxury Industry | News & Analysis | BoF GENEVA, Switzerland – Richemont, the maker of Cartier jewellery, said first-half operating profit will probably decline about 45 percent, while Hermès International SCA abandoned its annual sales growth target, adding to the gloom spreading across the luxury-goods industry. Revenue slid 13 percent excluding currency shifts in the five months through August, Geneva-based Richemont said Wednesday, missing the median analyst estimate for an 11 percent decline. Hermès said it’s no longer forecasting annual revenue growth of about 8 percent excluding currency shifts, and instead has “an ambitious goal” for growth. Hermès giving up on the forecast is a “negative read-across for the whole soft luxury industry, fueling concerns about the sector’s long-term growth potential,” Zuzanna Pusz, an analyst at Berenberg, said in a note. Richemont said the decline in operating profit for the six months through September includes one-time restructuring charges of about €65 million ($73 million).
Watch the first trailer for Tom Ford’s new film A week after his New York Fashion Week show, American designer Tom Ford has released the trailer for his new film Nocturnal Animals. The film is about an art gallery owner (played by Amy Adams) who is haunted by her ex-husband’s (played by Jake Gyllenhall) novel. Having not spoken to him in nearly 19 years, she receives a manuscript of this book in the post and it’s pretty violent – it follows the story of a band of outlaws who commit a gruesome crime against a family of three, so she interprets it as a threat. Of course, this isn’t Ford’s directorial debut – in 2009, he released A Single Man starring Julianne Moore and Colin Firth, which is a drama about an English professor trying to cope with life following the death of his boyfriend. This film was extremely well-received so it’ll be interesting to see whether Nocturnal Animals garners a similar response. Nocturnal Animals comes out on November 4th, 2016.
A Brief History of Chanel No. 5 Folklore decrees that somewhere in the world, each and every minute, of each and every day, a bottle of Chanel No. 5, is bought. It remains at the top of the international best-selling fragrance lists almost a century since its creation by Ernest Beaux, perfumer to the Russian court, introduced to Gabrielle Chanel by her then lover, the Grand Duke Dmitri Romanov, who escaped revolutionary Russia with the chemist to settle in Biarritz in 1920. A year later, in 1921, Parfum No. 5 was born. Just as it was Mlle Chanel’s desire to offer women a stylish, contemporary and uncluttered wardrobe ridding them of the frills, furbelows and unwieldy underpinnings of the Belle Epoque, so she aimed to revolutionise perfumery. Natural raw materials aside – and Chanel has gone to great lengths to protect the fields in Grasse where these are grown – the secret of No. 5’s elusive nature, and the truly groundbreaking thing about the scent, is, in fact, chemical.