FT: Level Shoe District: Stacked heels

FINANCIAL TIMES | ELISA ANNISS

Mocktails, music and dancing marked the first birthday of Dubai’s 96,000 sq ft Level Shoe District, the world’s largest luxury shoe store, last month. Customers and luxury-world luminaries such as Vogue Italia editor-in-chief Franca Sozzani attended the party at the footwear centre in Dubai Mall.

“We bought shoes, mingled with designers and were able to put faces to names,” says Bulgaria-born Dubai resident Mira Martinova, who thinks the huge store offers “the best customer service and collections”, including her favourites Phillip Lim and Alexander Wang. Such is Martinova’s passion for shoes that she claims to own more than 100 pairs – and to shop at Level Shoe District every week.

British luxury shoe designer Nicholas Kirkwood, who also flew in for the party, says: “When I heard about the size [of the store] I thought, ‘How are they going to make it work, make it intimate, stop it being a sea of shoes?’ But it really does work. There are wide walkways and it is very well designed.”

New York designer Paul Andrew, also at the event, agrees. “Every department store is looking at their shoe floor right now – but this is impressive. Quite simply, it has the best shoe offering.” Edgardo Osorio, founder of luxury footwear brand Aquazzura, describes the place as, “Shoe heaven ... You have department stores with incredible shoe departments – but nothing at all like this.”

In London, Selfridges was the first to supersize its shoe department when it opened its 35,000 sq ft women’s Shoe Galleries in 2010. In New York, recently expanded shoe departments can be found at Barneys, Saks Fifth Avenue and Macy’s, whose shoe area stands at 63,000 sq ft. Lane Crawford opened the largest shoe floor in China (30,000 sq ft) at its new Shanghai flagship store last month. Back in London, Harrods will launch a new footwear floor in 2014.

As yet, nothing rivals the scale of Level Shoe District. But is bigger necessarily better? “Personally, I am sceptical of supersize retail concepts,” says George Wallace, chief executive of London-based retail consultancy MHE. He says that while “they are very much a feature of the Middle East”, huge areas dedicated to a single clothing sector risk overwhelming customers; he points out that 96,000 sq ft is “much bigger than an average whole department store in the UK”.

Still, Level Shoe District has its fans: 12m people visited in its first year. Nadia Revenkova, a stylist for wealthy Russian women, flies to Dubai from Yekaterinburg in Russia every month to shop for shoes. “Many of the world’s fashion houses make a collection especially for Dubai. Only in Level Shoe District have I seen such an impressive selection in one place,” she says. A large range of sizes, a VIP area for fittings and the convenience of shopping in one place all contribute to its appeal, she says.

Patrick Chalhoub, chief executive of the Chalhoub Group which runs Level Shoe District (along with many luxury retail outlets across the Middle East), says the concept has been much more successful than was anticipated and has generated interest internationally. Two US mall owners have approached him asking him to replicate the idea in America, he says, and there have been overtures from China and Thailand. But Chalhoub is adamant that there will be only one such store. “We don’t intend to take it elsewhere – we want it to be a unique place and a unique experience,” he says. He hopes the store will in time be considered as much of a Dubai attraction as the Burj Khalifa, the world’s tallest building.With 300 brands on offer at Level Shoe District, you would be hard-pressed to think of leading shoe labels that are missing. As well as 40 designer shop-in-shops – ranging from Harrys of London and Berluti to Chanel, Dior, Miu Miu, Prada and Roger Vivier – the store carries many independent brands such as Ancient Greek Sandals, Castañer, Gianvito Rossi, Grenson, Rupert Sanderson and Ugg. It also houses the 1,400 sq ft Sole Lounge – podiatrist Margaret Dabbs’ largest and first foot spa outside of London.

So is this the apotheosis of large-scale shoe retailing? Robert Burke, head of New York-based luxury goods consulting group Robert Burke Associates, thinks the Dubai store will be “tricky to top” but reflects a change in how consumers view shoes.

“In the past, shoes were bought to complete an outfit or a look,” he says. “Now they are a separate fashion statement – this is a major shift.”

FT: Christopher Bailey: Fashion’s nice guy

FINANCIAL TIMES | VANESSA FRIEDMAN

Not long ago, no matter where you were in the world, there was a particular smell to a Burberry store. An earthy scent tickled the memory, sparking thoughts of loamy ground and windswept moors, warm fireplaces and woolly sweaters.

It was also, as it happened, the smell of the Burberry headquarters, a 150-year-old landmark building with a remodelled interior a stone’s throw from the Houses of Parliament – not to mention an office on the top floor, a broad white expanse of glass belonging to Christopher Bailey, the brand’s chief creative officer.

This makes sense, in many subtle ways. Burberry Hearth, the olfactory representative of the company, was not only Mr Bailey’s idea but is also an expression of its creator. It is a candle and room scent that references his memories of growing up in the Yorkshire countryside, and has been successfully monetised.

As such, the scent represents the way Mr Bailey has long bridged the gap between fashion’s creative and corporate worlds. And it offers a clue as to why, when Angela Ahrendts, Burberry’s chief executive, announced she was moving to Apple , the board of one of the UK’s biggest luxury fashion companies took an unprecedented step by naming Mr Bailey as her replacement.

When he takes over in mid-2014, he will become the first designer of a leading public brand to take the top spot on both the business and aesthetic sides.

“It’s a unique and very risky move on Burberry’s part,” says luxury brand consultant Robert Burke. “Traditionally, luxury groups such as LVMH and Kering keep a balance between a creative director and a CEO. That makes this a case study that will be very closely followed by the rest of the industry. If it works, it will change the playing field for the future. If it fails, it will drive everyone back to the old ways.”

There are £2bn in revenues, more than 50 different collections annually, and 11,000 employees depending on the outcome.

Not that you would know it to look at him. Mr Bailey, 42, is a low-key figure who favours jeans, classic Harris tweed jackets made in a Burberry factory in Yorkshire, and button-down shirts. His hair, a nondescript dirty blond, is messed up and slightly spiky. In a world where designers use image as a short cut to fame, his nondescriptness sets him apart. Along with his politeness, this has earned him the title of “fashion’s Mr Nice Guy”. He remembers “every employee’s name, plus their children’s names, plus their dogs’ names”, according to former Burberry vice-president Justin Cooke.

This may be partly a result of a working class background that he says keeps him humble. He was born in Halifax, West Yorkshire, a historic wool industry centre, and raised with his elder sister by a carpenter father and window dresser mother. After graduating from the Royal College of Art and working at Donna Karan and Gucci, he was plucked by Rose Marie Bravo, then chief executive, to be Burberry creative director in 2001.

Yet niceness is a quality not often associated with a pioneering chief executive. This fact – combined with a lack of formal business education and the luxury sector’s tough environment – explains the mixed investor reaction to his appointment.

“We believe that in a company as big and complex as Burberry, even for a person as talented as Mr Bailey, it is hard to have enough time to carry out both these roles,” wrote analysts at Sanford Bernstein. On Tuesday, the day of the announcement, the stock closed down almost 8 per cent, even though the same day the company reported revenues up 14 per cent to £1bn in the first six months of the year.

Insiders say this scepticism demonstrates ignorance of the way Burberry has functioned in recent years. There has long been a “dual reporting” structure in place for every area of the business, from creative to licensing and retail – and Mr Bailey, with Ms Ahrendts, has had the last word in strategic decisions as much as skirt lengths.

“I was in a number of interviews with him where he was asked about the share price or expansion strategy, and he was quite capable of responding for himself,” says Mr Cooke. “When he spoke to the retail team, it wasn’t about what a hanger looked like. It was about how many units were sold.”

“This is rare in my experience,” says Mimma Viglezio, a luxury management consultant and former executive vice-president at Gucci Group. “Most creative directors can’t read a profit and loss statement.”

Mr Bailey has played a crucial role in the brand’s success, in design terms and beyond. He elevated the iconic, if dated, Burberry trenchcoat to such a multidimensional extent that he was named designer of the year in 2005 and 2009, and menswear designer of the year in 2007 and 2008. The Queen recognised his services to his industry with an MBE in 2009.

He also conceptualised Burberry’s identity as the ultimate British brand, enlisting young talent from singers to actors to models for the advertising campaigns. He drove the move from multiple London offices to the seven-storey Westminster headquarters, arguing that it needed to be united in an environment that communicated its mission “to protect, to explore, to inspire”. With Ms Ahrendts, he was the architect of the digital strategy; the brand is now routinely called the “most connected in luxury”. Ironically, criticism of the company in recent years has centred on the lack of fashion-forward product on the runway rather than any corporate decisions.

“People are always saying his collections are quite commercial, as if that’s a bad thing,” says Mr Cooke, pointing out that for someone running a global business, this may be the crucial job qualification.

Yet no matter how thoroughly Mr Bailey has shaped the brand so far, formally adding Ms Ahrendts’ responsibilities to his own creates an entirely different set of expectations.

“It could be the best possible decision they have all made, or the worst,” says Mr Burke. ‘The only thing we know for sure at this point is: everyone is watching.”

FT: Chain bags are big this season

FINANCIAL TIMES | ELISA ANNISS

I know women. Give them chains. Women adore chains,” said Gabrielle “Coco” Bonheur Chanel, of the 2.55 bag, featuring a brass chain and leather strap, that she created in 1955. Chains have been associated with Chanel ever since – from the “timeless classic” bag, reimagined by Karl Lagerfeld in the 1980s, to the newer “Boy” bag, launched September 2011 – but recently they have also been used by other labels.

This season chains feature on bags in the collections of many labels, including Stella McCartney, Saint Laurent, Lanvin, Louis Vuitton, Victoria Beckham, Reed Krakoff, Céline, Asprey, and newcomer Julien David, indicating that Coco’s observations are as prescient as ever.

The chain bag has been a key look for Stella McCartney’s own accessories line since 2009, when she designed her Falabella style, with its slouchy silhouette and all-round braided chain strap fashioned from brass and anthracite aluminium. “This bag is presented every season with a new twist added to the fabric, colour and texture of the Falabella,” says Pam Brady of Browns, adding that this season’s must-have comes in check-print mohair.

Elizabeth Kanfer, senior accessories fashion director at department store Saks Fifth Avenue, says: “As handbags have become more minimalist, so chain straps have become more important as they add an element of shine or polish to an otherwise pared-down handbag.” She says Christian Louboutin, Alexander McQueen, Gucci, and Dolce & Gabbana also feature bags with chain handles in their collections and that mini bags, in particular look great worn across the body with a chain strap. “Chains also have a nice weight to them, they feel great in the hand and they often feel expensive,” she adds.

New York-based luxury retail consultant Robert Burke says chains provide an important “cool”, “tough” detail and have gathered momentum since the trend first took hold for autumn/winter 2012: “In reality, women are not drawn to über-minimal bags, which is one reason why we are currently seeing chains being used as a design element. It fits in with the punk/grunge trend, redolent of the 1990s.”

The Betty bag, a black suede version with a gold chain, was the only bag worn in Hedi Slimane’s debut Saint Laurent catwalk show last October. It first hit stores in January 2013 and has become a permanent piece in the collection, available this season in mini and medium sizes and colours that include ice blue, blush, chalk and red leather.

Accessories designer Katie Hillier was appointed as a consultant at Asprey in April 2012, and one of her many standout designs has been the £7,000 Ritz bag complete with a sterling silver chain. Hilary Lewis, Asprey’s leathergoods and accessories director, who works closely with Hillier, says: “It is very much a jeweller’s type of chain, which emulates a necklace, rather than an accessory-type chain.”

Also launching this season is the quilted lambskin “pillow” bag by French-born designer Julien David. He says that after he won the Andam fashion award in 2012, luxury group LVMH helped put him in touch with a “fantastic” bagmaker in France. “For me bags are all about the craftsmanship, so to find the right people to work with was crucial,” he says, adding that he uses a large, compact, solid chain that comes silver plated or in vintage brass “because it gives the bag strength”.

FT: Swarovski steps into world of film-making

FINANCIAL TIMES | VANESSA FRIEDMAN

When the lights dim and the credits roll on the cinematic premiere of the “21st century re-imagining” of Shakespeare’s Romeo and Juliet next month, the list of names will read much like any high-profile independent movie – written by Julian Fellowes of Downton Abbey fame; directed by Italy’s Carlo Carlei; and starring Hailee Steinfeld, Oscar nominee for True Grit. But there is one difference.

Along with Amber Entertainment, the film has been co-produced by Swarovski Entertainment, the new production arm of the family-owned Austrian company that is far better known for its little crystal animals and work with young designers than its cinematic credentials.

With the launch of Romeo and Juliet, Swarovski has become the first luxury brand to fully step into the world of film-making – not simply as a supplier of products but as a financial and creative partner.

Nadja Swarovski, chairman of Swarovski Entertainment, said: “We see it as a natural extension of our work with emerging fashion talent, and a way to express our philosophy, ideas and values, and achieve a greater reach for the brand.”

The division was set up in 2011 with the aim of funding two films or documentaries a year at an average cost of $10m-$20m a film, as well as becoming involved in the casting, location and other production choices. “It is a very substantial investment for us, but not an extraordinary one,” said Ms Swarovski of the costs of creating the entertainment division. Romeo and Juliet has been sold in 12 territories, including the US, the UK, China, the Middle East and Russia.A Romeo and Juliet collection is to be sold in 200 Swarovski stores worldwide and there are plans to sponsor the premiere.

Fashion has become increasingly involved with the film industry, moving from dressing celebrities for the red carpet to product placement such as designer Catherine Martin’s collaboration with Prada, Tiffany and Brooks Brothers on The Great Gatsby. The brands contributed to the movie and displayed costumes or jewellery from it in their stores.

Gucci is a partner of Martin Scorsese’s Film Foundation, which is dedicated to restoring cinema classics, and in 2011 the brand inaugurated its Women in Film prize at the Venice film festival.

Many brands such as Christian Dior, Lanvin, and Miu Miu also finance short films related to advertising campaigns that they then post on their websites and YouTube. And Tom Ford directed a feature, A Single Man, before starting his eponymous brand.

Robert Burke, a consultant to the luxury industry, said fashion groups were attracted by the “endless marketing opportunities” of film. But until now brands had been afraid of the risk of eroding brand equity – more than simply losing their initial investment – by being associated with a badly reviewed movie or one that dealt with risqué subject matter, he said.

“As creative as fashion brands are, they are also wildly conservative,” Mr Burke added.

Stefano Sassi, chief executive of Valentino, cautioned: “A brand would have to be very sure the film expressed its core values. I think it’s a stretch.”

Ms Swarovski acknowledged the dangers, saying the company chose its subject matter very carefully, and it would never be involved with a film about “violence, witchcraft, black magic, perversion”.

“I think it’s an incredible business opportunity,” she said.

Ms Swarovski said the move had been welcomed by the film industry. The entertainment division is already developing its second property, to be scripted by David Seidler, who wrote The King’s Speech.

FT:Coty shares slip takes gloss off IPO

FINANCIAL TIMES | ELIZABETH PATON AND ARASH MASSOUDI

Coty slipped on its stock market debut on Thursday, after raising $1bn from what was the largest consumer products initial public offering on the US market for more than a decade.

Shares fell by as much as 3.5 per cent in early trading on the New York Stock Exchange before slightly rebounding, after the fragrance and beauty group sold 57.1m shares at an offering price of $17.50.

Coty, which makes perfumes for luxury labels such as Marc Jacobs and Calvin Klein and owns nail polish brands including OPI and Sally Hansen, finished 0.8 per cent lower giving it a market value of $6.6bn.

The first-day jitters reflected investors’ concerns over whether Coty was priced at a multiple that was only slightly cheaper to its publicly traded competitors. Investors also pointed to Coty’s flat revenue growth in its most recent year as potential source of weakness.

“Everyone is looking to Coty and pondering its growth potential,” says Gilbert Harrison, chairman of Financo, a New York-based investment banking firm.

He added: “Recent luxury IPOs may have gone extremely well but that doesn’t necessitate a warm reception from the markets. Investors will be looking for clear signs that the company is able to continue sustainable growth in all aspects of its business.”

The New York-based company will not receive any proceeds from the 19 per cent float. Joh A Benckiser, Coty’s controlling shareholder and the holding company for Germany’s billionaire Reimann family, is drawing down its stake in the company while retaining voting control.

Minority shareholders Berkshire Partners, the Boston-based private equity group, and Rhône Group, the private equity firm, have also used the IPO to reduce their holdings.

Coty’s owners have been seeking to capitalise on booming global demand for cosmetics and fragrances, particularly from growing middle classes in developing markets.

Research from Goldman Sachs estimates that the prestige cosmetics market is worth $46.4bn, which constitutes around 15 per cent of all luxury sales.

Beauty purchases by middle-class customers – particularly those in emerging economies who are becoming increasingly sophisticated and concerned with personal care – are considered a gateway to higher spending and the largest future influencer on luxury shopping.

“The industry is seeing a seismic shift not unlike the one witnessed within the apparel sector several years ago,” says Robert Burke, a New York-based luxury retail consultant.

“The aspirational consumer is increasingly looking for a seamless lifestyle experience from a beauty brand; any company able to harness that is likely to see considerable return on its investments.”

The company’s public offering is the largest in the personal consumer products industry since the Carolina Group raised $1.1bn from an IPO in January 2002, according to Dealogic.

FINANCIAL TIMES: Only in America

FINANCIAL TIMES | VANESSA FRIEDMAN

Is there such a thing as “American fashion”? I don’t mean “American designers”, they clearly exist; or fashion made in America – that issue can be left to the politicians in Congress. No, I am talking about the more complicated question of contemporary aesthetic identity. Once upon a time, according to veteran US designer Michael Kors, “Paris stood for fantasy, Milan for luxury tailoring, London for quirkiness and New York for pragmatism”.

But, as the 2013 spring/summer womenswear shows kick off in New York, it seems an appropriate time to ask if there is such a thing as a national aesthetic any more? Can such a thing exist in a high fashion world where brands sell to clients who might live in Moscow or Beijing, shop in Paris and work in New York; where a company such as Paco Rabanne can have its headquarters in France, be owned by a Spanish company, and have, as it did at one point, an Indian designer; where ultra-Parisian label Yves Saint Laurent has chosen as its new creative director Hedi Slimane, who is planning to do his job many time zones away in Los Angeles; and where Brits Victoria Beckham and Stella McCartney can hold their ready-to-wear shows in New York and Paris respectively.

The obvious answer would seem to be no. But the real answer, surprisingly, is yes – at least as far as America is concerned. What’s more, American fashion is getting clearer, not fuzzier. Robert Burke, founder of an eponymous brand consultancy and former fashion director of Bergdorf Goodman, says: “There hasn’t been a moment like this in New York fashion since the Ralph/Calvin/Donna years [of the mid- to late-1980s].”

This is not necessarily symptomatic of wider fashion world trends: British fashion is not becoming more identifiably British than before, for instance. But a combination of factors – such as the blurring of old dress code rules, the rise of high street fashion, and the recession – has helped to create a new group of New York-based designers with a shared aesthetic. At its heart are clothes combining the simplicity of separates with luxurious and texturally rich materials and construction.

Think, for example, of Reed Krakoff’s green silk sleeveless dress piped in racing stripes of black leather with a subtle drape at the waist created without the aide of a belt ($1,590, worn by Charlize Theron among others); or Michael Kors’ lace and stretch wool-crêpe dress ($2,395), the lace offering a peekaboo effect in an otherwise simple silhouette. Think of Mary-Kate and Ashley Olsen’s label, The Row, and their military-style ribbed wool jacket with three rows of steel buttons instead of the usual two ($1,790). Think of Narciso Rodriguez’s white silk crêpe dress with black inserts for silhouette shaping ($1,695). All these clothes share an externally pared-down but internally pumped-up sensibility.

What to call this new movement? “I think luxury sportswear is the right term,” says Simon Collins, dean of the school of fashion at Parsons the New School for Design in New York (and, as it happens, a Brit). This term was once considered an oxymoron – luxury being by definition exceptional, rare and fragile, and sportswear being by definition easy, functional, utilitarian and basic – but in the modern world it makes high/low fashion sense. (Sportswear, of course, does not mean clothing for sport, but rather a form of dressing invented in America in the 1930s that, according to an essay by Richard Martin, former curator of the Metropolitan Museum’s Costume Institute, involved rethinking “fashion from its very roots, not simply paring away some of the accretions of traditional prettiness but establishing a new standard for a practical, modern style in accord with the lives of the women”.)

“Sportswear was always about separates,” says Collins. “And that is how everyone dresses now. The power suit has gone out of the window.”

In the early 1990s, when I briefly worked at American Vogue, even Anna Wintour wore skirt suits to the office; for the past 10 years, I can’t remember seeing her sitting in the front row of a fashion show in anything other than a full skirt and cardigan, or sheath dress. Michelle Obama, too, has eschewed suits in favour of printed dresses and cardigans. “We call them ‘editor-in-chief’ dresses,” laughs Kors. “When the word ‘sportswear’ came up in the fashion context, you used to get all this snide, ‘Isn’t that jeans and T-shirts?’ But not any more. People understand it means ease, and even an evening gown can have that.”

The shift has been acknowledged at industry level. At this summer’s Oscars of the US fashion industry, the Council of Fashion Designers of America (CFDA) awards, The Row beat Marc Jacobs and Proenza Schouler to take home the award for womenswear designer of the year; Reed Krakoff won accessory designer of the year, ahead of It bag darlings Alexander Wang and Proenza Schouler. The awards are voted for by the fashion community at large, so it’s effectively a jury of peers.

Coming on the heels of Michael Kors’ $944m initial public offering last December, the biggest IPO in American fashion, these awards seemed to announce the beginning of a new stage in American fashion. As Steven Kolb, president of the CFDA, said: “I think it’s an acknowledgement that what has always been the defining element of American fashion has evolved.” Put another way: there is a reason shares in a company run by Kors, effectively the father of luxury sportswear and someone who can make a camel pencil skirt look ineffably expensive, have more than doubled in price since the IPO; and a reason why Bloomberg recently ranked it the number one public offering of 2011.

There is, of course, more going on in New York fashion than luxury sportswear. Designers such as Proenza Schouler, Marc Jacobs, Oscar de la Renta and Kate and Laura Mulleavy of Rodarte all have highly relevant, lauded individual visions that resonate globally; the CFDA also acknowledged the rise of mid-range American contemporary market brands such as Rag & Bone, Theory, Helmut Lang, J Crew and Tory Burch and gave Andrew Rosen, godfather of the contemporary market, its Founders’ award. But what sets apart the sportswear movement is its visible embrace of an American fashion continuum, and its cohesion.

The period Robert Burke calls the “Ralph/Calvin/Donna years” was, indeed, the last time US fashion presented a coherent face to the world. This wasn’t because Lauren, Klein and Karan shared the same aesthetic – they didn’t and still don’t – but because their work was joined by a certain shared value system, built on words such as “easy”, “simple” and “functional”. It made for a hattrick of American fashion power that hasn’t been equalled since. All are, of course, still in business and bigger than ever – but they have become the establishment; the expected.

This aesthetic – call it power sportswear – was also rooted in the times: Karan and Klein, in particular, made power clothes for women who wanted to work their way to the top. It was stage two of the revolution launched in the 1940s by Claire McCardell and Bonnie Cashin, when they helped shirtwaists and other intrawar pieces transcend their origins with an injection of easy elegance, offering a local alternative for the first time to the European vision of fashion – one that was not rooted, as Simon Collins points out, in “dressing for court” but in functionality and relative informality. This was later adopted and adapted in the 1970s and early 1980s by Liz Claiborne and Anne Klein, who brought “American fashion” to the girl on the street.

Yet the roots of what Reed Krakoff describes as sportswear’s “third generation” took hold only recently. “I date it back about five years,” says Burke. “When American designers stopped trying to be Italian or French.”

The recession-hit 1990s, with its adoption of grunge, deconstructionism and Pradian minimalism, seemed to confuse American fashion, with its focus on functionality. It was, says Collins, a time when New York was very Europe-facing.

Though many terrific designers – including Marc Jacobs and Tommy Hilfiger – became famous in that period, their work was marked by an individuality that often made New York fashion week as a whole seem oddly diffuse; there were so many conflicting points of view on display, it was hard to figure out what the message was or what the city stood for, sartorially speaking. Indeed, for a while it seemed that was the message: it’s a global world, there isn’t any metropolitan story. Fair enough. But then something changed.

“I think the rise of high street [fashion] had a lot to do with it,” says Valerie Steele, director and chief curator of the museum at New York’s Fashion Institute of Technology. “Because the whole idea of sportswear got appropriated by fast fashion, so designers had to figure out what their value-added would be. Their first reaction was to make their clothes fancier – more Parisian, if you want – but then they realised: first, during a recession, being experimental is not necessarily the right answer; and, second, if you make your clothes better – better fabrics, construction, raise them to the level of luxury – that is the point of difference. You can’t knock off incredible fabrics.”

Collins agrees. “It is about elevation, as opposed to taking something from high to low” – the flipside of high fashion brands collaborating with the high street.

It is also a response to the straitened economic times, which have created a groundswell of demand among the still-moneyed classes for more discrete, less public luxury: the sort of indulgent garment that speaks to the wearer but not the watcher by dint of its fabrications and fit – which is to say, luxury sportswear. A double-faced cashmere sweatshirt does not look all that different, at first glance, from a regular sweatshirt but its feel and cut adds an extra dimension.

Krakoff, who started his eponymous brand in 2010, says, “I looked at sportswear and thought, ‘As it is, it can’t be done any better, so what can we do next?’”

The answer, it seems, was to combine the building blocks of historical European luxury and the American tradition. Kors, who worked in Paris from 1997 to 2003 as creative director of Céline, says he was very struck during this period by the fact that “for all the French tradition and talk about couture, French women, on a daily basis, dress in separates.” It was knowledge that would inform his own collection.

“If I stand in any of our stores around the world,” says Kors (and he has 321), “I don’t really see a difference between what someone in Brazil wants, and someone in Chicago, and someone in Shanghai.” He believes the emergence of luxury sportswear as an aesthetic was an inevitable effect of sartorial barriers coming down. For decades, he says, if you went to a department store, “designer sportswear” and “couture” would be separated, and clothes sold as “ensembles”. That’s not true any more.

And just as those old boundaries blurred, so did all the rules about price points (it is now almost a point of pride for women to shop the high street and haute couture at the same time) and about what constituted daywear and evening wear. Jenna Lyons, J Crew’s creative director, went to May’s Met Ball, New York’s social event of the season, in a cropped denim jacket and long pink satin skirt. “Today, serious evening gowns often seem very old,” says Steele.

“Clothes are no longer so delineated,” says Krakoff; weekend and office wear have become almost interchangeable. “It’s more a point of view, as opposed to a classification.”

“We think about mobility a lot in terms of our collection,” says Kors. “Here’s a piece: how many different ways can you wear it?”

“People used to be very disparaging about this kind of fashion,” says Collins. “But it takes an enormous amount of confidence to be able to make something that is so apparently simple but, nevertheless, is made from the most extraordinary materials and costs a huge amount of money. And that confidence, in the end, I think of as a very, well, American quality.”

FINANCIAL TIMES: Flagship stores: Groups look east as clients head west

FINANCIAL TIMES | ELIZABETH PATON

Flagship stores have long been lossleaders for the luxury industry. Brands’ retail investment has soared in recent years, with projects becoming increasingly elaborate and expensive in the quest for patrons and profits – but entailing costs that are rarely recouped by sales.

Yet, from a state of unanimity, debate has ignited as to how necessary flagships will be to brands in the future. Now that more than 50 per cent of luxury purchases are made by tourists visiting the west, brands could scale down their rollout of supersized stores once consumer visits level off in emerging markets.

“Who needs aggressive store expansion when customers are happy to jump on a flight to London, Paris or New York?” says Aaron Fischer, head of consumer research at Asian brokerage CLSA, noting that the luxury sector’s capital expenditure to sales ratio has slipped from 7 to 5 per cent since 2009.

Others are not so sure. Burberry, Prada and Louis Vuitton, respectively UK, Italian and French fashion labels, have led an explosion in international flagship openings over the past year, still clearly convinced of their long-term financial dividends.

IWC opened a 3,000 sq ft store on Madison Avenue in New York last month, its first US flagship. The Swiss watch brand spent years searching for the perfect location, staff and aesthetic. Each timepiece collection has its own themed sector, where books, boats, an aquarium and even an in-flight simulator surround products.

“Opening a US flagship was the obvious next step in our expansion strategy,” says Georges Kern, chief executive of IWC. “Inevitably, costs are high, but it’s only a decision we would take [having considered] the maturity of the company and whether we could afford it. It’s an important way of gaining brand equity and consolidating positioning in a core market. I would never open a flagship unless I was convinced of its profitability.”

The store’s experiential, interactive quality has buoyed sales. The longer a customer stays on-site engaging with a brand, the more likely they are to spend, which explains the art exhibitions, film screenings and cafés often found in luxury flagships.

“We use flagships to showcase our evolution into a multifaceted lifestyle brand, bringing our universe to life while placing products in an explanatory context,” says Fabio Mancone, director of licensing and communications at Giorgio Armani, the Italian fashion group.

“In an age where online shopping is becoming dominant, a flagship store is a perfect example of how the theatre of the physical, rather than virtual shopping, can still excite a crowd.”

Armani says that profitable impact goes beyond business-to-consumer marketing and education. Wholesalers in new regions see the investment as a sign of confidence in the brand’s appeal, resulting in notable order boosts following flagship openings.

Peter Marino, a New York-based architect, has designed dozens of flagships for LVMH and Chanel, the French luxury groups. He is convinced the boom in tourist traffic from countries such as China and Russia has reinforced the need for luxury brands to up the stakes in their retail strategies.

“The more mobile the customer base, the shorter the lifespan of a flagship,” he says. “Once, a store could have remained unchanged for a decade; now they look dated faster. The Asian customer in particular is extremely savvy, with incredibly high expectations. Everything must be bigger, newer, lighter and brighter.”

Mr Marino says the lasting impact of a flagship visit can be far stronger than advertising campaign exposure, making it worth the millions spent.

Furthermore, given that flagships are often operated directly by the luxury company itself, they are an easier means of brand control, while still making a statement and gaining traction in a new environment. Still, due diligence remains vital.

Robert Burke, founder of Robert Burke Associates, a luxury brands consultancy, says: “Many brands have been burnt financially by initially underestimating the complexities of foreign markets, be it through picking the wrong local partners, heavy taxation or investing too much too soon in ambitious retail strategies.”

Large-scale operations in India have stung several luxury labels in recent years. Overhasty investment after flagship successes in China has produced heavy losses, followed by a quiet downsizing of operations. Meanwhile, the dismal results reported by Abercrombie & Fitch, the US retailer, this month were attributed primarily to spending too much too soon on weak European flagships.

Inevitably, the size of the luxury group dictates the impact of the successes and failures of a flagship on its books. For smaller brands, flagships run the risk of becoming white elephants, unable to cover rent, staff and construction costs should customers’ minds – and wallets – wander.

Antoine Belge, luxury analyst at HSBC, the bank, says: “Big brands are more secure. Most have had flagship chains for some time, so gradual openings won’t significantly affect financials.

“However, they tend to be less profitable than regular stores, taking two to three years to break even, versus the average of one year. Still, this can be compensated for in other ways, such as building long-term engagement with a customer base.”

Armani’s Mr Mancone agrees companies must be open-minded when quantifying return on investment, arguing it is one of the luxury world’s defining idiosyncrasies.

“Building a successful fashion brand requires acceptance that one will not always get immediate returns from investment – just look at the example of fashion shows. Measurement must go beyond sales and encapsulate value gained from the lasting impact of a meaningful connection with luxury’s 21st century customer.”

FINANCIAL TIMES: New look for a rediscovered gem

FINANCIAL TIMES | VANESSA FRIEDMAN

On Monday night, the great and good of New York, Hollywood and fashion mounted the stairs of the Metropolitan Museum of Art, evening gowns sparkling, tuxedos tailored, paparazzi snapping, to attend the city’s social event of the year: the Costume Institute Ball, which celebrates the opening of a new exhibit devoted to the art of dress. This season it is “Schiaparelli and Prada: Impossible Conversations”, an imaginary give-and-take between the two Italian designers, the first of whom died before the second ever hit the catwalks.

Yet, far from being a relic of the past, Schiaparelli-the-brand is currently being shaped for the future. Five years ago, Diego Della Valle, chairman of luxury goods group Tod’s bought the trademark to the house. Though he has allowed it to stay relatively dormant until now, the Met Ball has served as a wake-up call to the business. “It is a big opportunity to have the name become known by a new generation,” says the 58-year-old, noting that, while he had no part in planning the show, it would be a mistake not to exploit such a platform.

He has recently signed up the brand’s first ambassador – someone who will embody Schiaparelli publicly for the future – in the form of Farida Khelfa, the French-Algerian model/actress and former muse to both Azzedine Alaïa and Jean-Paul Gaultier. He has also committed to a timeline to launch: this July he will unveil the renovation of the original Schiaparelli Maison in Paris at 21 Place Vendôme, three floors of atelier, apartment, archive and offices; in September, the company will name the new designer; and next March, during the ready-to-wear shows, hold the first runway presentation.

More important, however, with Schiaparelli Mr Della Valle is articulating a new approach to luxury. Instead of creating and showing between four and eight collections a year, Schiaparelli will have only two. Rather than launching as a “lifestyle” brand offering fashion, beauty, homewares and gifts, Schiaparelli will be limited to clothing, accessories and fragrance/body lotion.

Instead of creating entry-level products that allow for price elasticity, Schiaparelli will also be very expensive – higher, Mr Della Valle says, than top-priced ready-to-wear brands such as Chanel and Tom Ford. He identifies the clothing as “prêt-a-couture”: a new level somewhere between very high-end ready-to-wear and the made-for-you couture extravaganzas that cost from €20,000.

In addition, instead of being available worldwide, Schiaparelli will be sold only at Place Vendôme; there will be no wholesale, and no advertising.

Production will be largely done in Italy. Yet, Mr Della Valle says, just because the brand “is not commercial, does not mean it won’t be profitable”.

“It’s not the normal way to do things,” says Robert Burke, founder of an eponymous luxury brand consultancy. “Traditionally, relaunching an old brand involved a star designer, a big show and flooding the normal distribution channels. But then, Schiaparelli was never terribly normal in the first place.”

Elsa Schiaparelli was one of the most influential female designers in fashion history, but her business suffered during the second world war and closed in 1954. “We could do collections for 20 years just from the archives,” says Mr Della Valle. “There are a lot of rich people in the world who want something very special.”

Arnaud de Lummen, a French entrepreneur who specialises in identifying and relaunching old luxury trademarks, echoes this view. “There is a great magic and attraction to a ‘rediscovered’ gem, which gives a sense of pride and connoisseurship for those who have it,” he recently told Women’s Wear Daily, the fashion industry publication.

This new model is not without its critics, however. “I don’t think restricting distribution to this extent makes something desirable for the younger generation,” says one luxury observer. “It’s a mistake most of the luxury brand managers make: they don’t understand that the younger consumer who has grown up with Twitter and accessibility, defines exclusivity differently.”

Indeed, the Schiaparelli model described by Mr Della Valle is more reminiscent of the historic structure of a couture house, which demanded clients come to the designer, than the new way of thinking, which has brands such as Chanel taking its couture shows (complete with extravagant sets and famous models) to clients as far afield as Asia. “Discovery is not dependent on inaccessibility,” says the observer.

Mr Diella Valle says he was attracted to Schiaparelli both because of the values the brand represents – “modernity, style, independence” – and because of its success in the lucrative areas of perfume (the house’s fragrance “Shocking” was the main rival to Chanel No 5 when it was launched in 1937) and accessories (Schiaparelli was as famous for her “shoe hat” as her “lobster dress”), which he calls “the most important part of luxury today”.

The brand also fits in to what has become something of a personal crusade to preserve the cultural heritage of Italy, be it La Scala (Mr Della Valle has pledged €5.2m for its restoration), the Colosseum (a pledge of €25m) or one of its most famous fashion names.

Still, he has taken his time with the relaunch. One reason could be that it has become increasingly clear how difficult re-energising an old house can be. For every super successful Chanel or Burberry there is an equally high-profile failure.

Aquascutum, the storied British house founded in 1884 and owned since 2003 by fashion entrepreneur Harold Tillman, went into administration in April.

Meanwhile, despite its vaunted pedigree, Paris-based Vionnet, which was acquired by Matteo Marzotto former president of Valentino, in 2009, has not been able to find the alchemical combination of modern designer, heritage inspiration and corporate investment and governance that creates aesthetic and balance sheet gold.

“No one wants an Ungaro on their hands” says Mr Burke, referring to another once-storied French couture house that went through a revolving door of CEOs and designers after the founder retired, and this year dropped off the Paris fashion show schedule.

This is an especially acute challenge for a house such as Schiaparelli, whose fame can be both an advantage (its history creates a structure for a new designer) and a potential problem (it also creates expectations on the part of the buying public that a designer may, or may not, meet).

Indeed, Mr Della Valle says he has been called “every week at least” for the past few years about various rumours regarding his appointment of a new designer.

So far the names that have been mentioned are Brit Giles Deacon (who briefly designed a capsule collection for Fay and also worked at Ungaro), Frenchman Roland Mouret, Belgian Olivier Theyskens and, most recently, John Galliano, the British designer who had to leave Dior after making anti-Semitic remarks.

Anna Wintour, editor of US Vogue and one of the most influential voices in fashion, suggested in the New Yorker magazine that Kate and Laura Mulleavy, the American designers behind Rodarte, would be good candidates for the post.

Mr Della Valle has denied all such rumours, and will simply say that he does not consider “being a star designer” a pre-requisite for the appointment. He is currently deep in the hiring process and estimates that by next September, just after the Schiaparelli & Prada exhibit at the Metropolitan Museum closes, he will have 40 people in Place Vendôme, with a further 60 joining the atelier by February 2013.

“I think this will be a wait and see situation,” says Mr Burke. “But if it succeeds it has the potential to make people in the industry rethink the way they present and distribute product. Fashion will copy anything if it works.”

FINANCIAL TIMES: Milan floats a big idea

FINANCIAL TIMES | LUCIE GREENE

Recently a new fashion store opened in Milan. This would not in itself be a notable occurrence, especially during fashion week, but this is a vast, 43,000 sq ft “directional emporium” with internal floors, walls and stairwells that float in space.

Sited in a former cinema on the edge of the shopping district and designed by Parisian architect Jean Nouvel, this is Excelsior, Italy’s first upscale concept department store in the Selfridge’s/ Barney’s mode.

The store is the first venture in the luxury end of the market for Gruppo Coin, which owns lower- and mid-market chains OVS Industry, Coin and Upim.

“It’s totally new for Milan,” says Stefano Beraldo, the group’s chief executive. “Here, if you are a luxury brand you set up your own store or you sell a very limited selection to boutiques. There are no luxury department stores.”

That begs the question: if there are no luxury department stores in Milan, could there be a reason?

“The charm of shopping in Milan is the street of shops,” says Ed Burstell, managing director of Liberty of London. “It’s elegant and timeless, but perhaps a bit quaint. Yes, Excelsior addresses a more modern approach to shopping: people are seeking an edited version. But it will have to convince Milan.”

Maurizio Borletti, former chairman of La Rinascente, one of Milan’s oldest department stores, points out other challenges: “location, size, price points, and the economy in Italy”.

Mr Borletti, who is also chief executive of Borletti and chairman of Printemps, the Paris department store, adds: “While there is a lot of travel from wealthy Chinese in particular, Milan is not as desirable as London and Paris. Excelsior’s pricing and size may also prove a challenge to getting the high volume of sales, as it is quite narrowly focused on luxury and fashion. It is also very close to a high traffic area in Milan, but is not in it.”

Coin devoted €30m ($26.3m) to the project, which Mr Beraldo characterises as having “the services of a small boutique but all the international brands of a major store”.

The fashion content is overseen by Antonia Giacinti, founder of Italian multi-brand boutique collective Antonia, and includes Balmain, Haider Ackermann, Levi’s Limited Edition, Valentino and Vanessa Bruno – many of which are either new to Italy or little distributed. Manolo Blahnik will open his first shop in Italy in the store.

Film-maker and art director Marco Braga has curated its art selection. There are videos by digital artist Matt Pyke, and it boasts its own “sound identity” courtesy of Italian DJ Stefano Fontana. There’s a ground-floor cocktail bar with regular shifts in music and scents, a Ladurée confectionery stand, a gourmet food emporium and three restaurants.

An industry figure estimated that for Excelsior to make a healthy profit it would need to bring in €60m-€80m a year, and €40m to break even.

“My first impression is that it seems quite museum-like, with high design concept, product behind glass and sparse merchandising, which can be a barrier to getting the kind of high volume sales necessary,” says retail consultant Robert Burke.

Yet, design and fashion blogs have been won over and, as Mr Borletti points out: “In the Milan shopping landscape, there is little competition in this format.”

FINANCIAL TIMES: Dress a triumph for McQueen and country

FINANCIAL TIMES | VANESSA FRIEDMAN

“It’s the greatest ka-ching moment of all time.” So said CNN TV commentator Piers Morgan, as he and an estimated 2bn global viewers of the royal wedding – not to mention dress designers around the world – waited to discover who had made Catherine Middleton’s gown.

The answer: Sarah Burton for Alexander McQueen.

According to a statement issued by Clarence House, “Miss Middleton chose British brand Alexander McQueen for the beauty of its craftsmanship and its respect for traditional workmanship and the technical construction of clothing. Miss Middleton wished for her dress to combine tradition and modernity with the artistic vision that characterises Alexander McQueen’s work.”

A classic gown with powerful echoes of the famous dress Grace Kelly wore to marry Prince Rainier, the design consists of a lace overlay on a satin bodice and a skirt with a 2.7-metre train.

Other than French Chantilly lace combined with English Cluny lace, it was composed entirely of fabrics sourced in the United Kingdom, and embroidered by the Royal School of Needlework.

The choice was immediately applauded by the British fashion community. Designer Bora Aksu said, “The dress was absolutely right as Catherine looks straight out of fairytale. The style is timeless and will look just as stunning in many, many years to come. A great honour to British fashion.”

Designer Graeme Black said: “She is the Grace Kelly of our age. Britain loves the dress.”

Catherine Middleton’s decision will have immediate repercussions for Alexander McQueen, one of the smaller brands in the luxury group of conglomerate PPR.

Though famous within the fashion community for its dramatic runway shows, and the subject of worldwide coverage last year when its eponymous founder committed suicide, McQueen is only just reaching the size at which it can advertise. Its first, small campaign was planned for this autumn/winter.

Antoine Belge, luxury analyst at HSBC, said: “For such a brand, [the royal wedding] is a tremendous opportunity to attract intense media coverage it could never have financially afforded otherwise.”

The selection of McQueen also places a national halo around the brand, which shows in Paris and is owned by a French group, confirming it as one of the pre-eminent British fashion names on the global stage, and suggesting Ms Middleton may use her position to further the interests of the British fashion industry.

Finally, the dress also marks a very public coming out for creative director Sarah Burton, an unknown until she assumed the design helm of the company last May after Mr McQueen’s death.

Ms Burton said: “It has been the experience of a lifetime to work with Catherine Middleton to create her wedding dress . . . I am so proud of what we and the Alexander McQueen team have created.”

Though Ms Burton has remained largely in the background since her appointment, quietly evolving the label’s aesthetic from the aggressive genius of Mr McQueen in a more feminine, gentle direction, Ms Middleton’s gown should further enhance perceptions of the label’s growing accessibility.

The house’s range was further demonstrated by the dress Ms Burton designed for Philippa Middleton, maid of honour, a notably streamlined cap-sleeved long sheath in heavy crepe, with a draped cowl neck.

Robert Burke, chief executive of brand consultancy Robert Burke Associates, said: “The designer will have a world wide audience that only happens every new decades.

“A smart brand can double, triple or more their business in a short time.”

FINANCIAL TIMES: Fur fervour

FINANCIAL TIMES | LUCIE GREENE

It is the most contentious item of clothing on the catwalk, found on everything from shoes to coats to chain necklaces. Fur is back.

According to the Fur Information Council of America, fur appears in 20 per cent more of the autumn/winter catwalk collections this year than last. At Oscar de la Renta, coats were trimmed with fox; at Lanvin, black cropped jackets were adorned with shaggy fox collars; Carlos Miele showed cropped fox jackets and swing astrakhan (Persian lamb) coats; at Helmut Lang there were grey rabbit gilets; Jean Paul Gaultier introduced black coats with mink; while Fendi had coats, shawls and gilets in fox, mink and shearling.

Torben Nielson, chief executive of Kopenhagen Fur, a Danish fur auction house, says prices of fur have doubled on last year, with mink and Persian lamb in particular selling fast. “China and Russia are exploding: China accounts for more than half our business,” he says. “Half of [the fur] is consumed in China, and half is used by Chinese furriers to produce pieces for luxury brands.”

Celebrities are wearing fur more often, too, irrespective of milder winters or protesters from People for the Equal Treatment of Animals (Peta). Last week, Kate Moss emerged from dinner at The Ivy restaurant in London wearing a shaggy fur gilet; days later Love magazine editor Katie Grand was photographed in a bold white fur piece from Louis Vuitton.

Robert Burke, a New York-based luxury consultant, says the reason for fur’s popularity is its newfound modernity. “It’s no longer about the old fur coat department. Fashion designers are putting their stamp on pieces now.”

And it is not only the established guard who are using fur but also younger designers such as Thakoon and Zac Posen. Thakoon has worked fox, mink and raccoon patches into jackets, Posen striped fox fur into multicoloured coats.

Brix Smith Start, owner of Start London boutiques, believes the ascendance of fur is partly a result of the economy, with consumers wanting investment pieces and “tangible luxury”. It has even emerged on accessories: Manolo Blahnik’s high-heel booties are trimmed in chinchilla; Céline’s satin open-toe mules with rabbit-fur lining; and Louis Vuitton’s chain-link necklaces are interspersed with fur.

Fur’s increased prevalence, however, is still a divisive issue for retailers and consumers alike. That’s why fur associations have been striving to transform its image. Saga furs, a body representing 3,000 breeders in Finland and Norway, has worked with young fashion designers for 10 years, sponsoring shows and providing free samples in order to give fur a fashion edge and reach younger audiences.

“Young people are buying fur now, and they’re more educated about where it comes from,” says Diane Benedetti, vice-president of advertising and promotion at North American Fur Auctions. “We’ve worked with environmental conservationists; the industry is heavily regulated. We’ve also tried to communicate our ethical practices much more. People are embracing fur again because of that. They’re seeing it more for it’s environmental benefits. Buying fur is better than buying a polyester jacket you’ll throw away the next minute, and will take 30 years to biodegrade. It’s the opposite of disposable.”

But many designers, including Miu Miu, Chanel and Nina Ricci, have rejected real fur and tried to create a similar luxurious effect with high-quality faux fur. Sarah Curran, founder and chief executive of retail website My-wardrobe.com, says, “We’ve seen an increase in extremely high-quality faux fur, which has featured heavily in the collections of designers such as Jaeger London, Sportmax, See by Chloé and Love Moschino. Around 35 per cent of our coat buy this season includes faux fur.”

Ed Burstell, buying director at Liberty, in London, concurs. “The quality of faux fur has improved so much,” he says, adding that the store had tripled its buy of faux fur pieces from last autumn. “Before it had the reputation for looking cheap, but now you can hardly tell the difference.”

Burstell notes, however, that there is still resistance among consumers to paying the same price as for the real thing. “People don’t realise that it actually works in reverse with faux fur. The process of making really great faux fur is actually more expensive than buying real fur.”

FINANCIAL TIMES: A sartorial strategy for growth

FINANCIAL TIMES | VANESSA FRIEDMAN

There is no question that football can sell fashion – Louis Vuitton’s current heritage campaign, featuring legends Zinedine Zidane, Pelé and Diego Maradona playing table football in a Madrid bar, was chosen, according to the company, specifically because of the “universality” of the sport’s appeal. But can fashion sell football?

For the first time, Fifa, the sport’s governing body, is betting yes. This year it has licensed its imagery, including mascots and logos, to be transformed into a clothing brand, courtesy of Singapore-based Global Brands Group. In turn, the company, which also owns the rights to create and distribute products from the PGA golf tour, has licensed its products to 19 territories round the world – including the US, football’s most fan-challenged region. The theory is: if the sartorial strategy works there, it will work everywhere.

Janon Costley, chief executive of Total Apparel Group (Tag), the company charged with making this happen in the US, believes that consumerism could be the answer. “During the period around every World Cup, Fifa has huge sales – during the last one they did $2bn in merchandise globally – which then dwindles to basically zero over the next three years,” he says. “It became clear to Fifa that they needed to come up with a new form of outreach to consumers. When Global Brands approached them with the idea of creating a clothing brand, they decided it could be the answer.”

So, while Nike (sponsor of nine teams, including the US and Brazil) and Adidas (sponsor of 12 teams) project huge sales during South Africa’s event, Fifa is hoping that by entering the lifestyle market, it will not only keep interest alive between tournaments but may actually increase its audience in the US.

This is especially important in the US, where, Don Jones, Tag’s chairman, points out, there is the most room for expansion.

“The potential market is huge,” agrees Mike Principe, managing director of Blue Entertainment Sports Television (Best), an equity investor in Tag. He says there are now 18m registered football players in the US, a number that includes children playing in soccer leagues as well as adult weekend teams and official teams. Yet somehow all those players have never cohered into an identifiable and dedicated consumer fan base.

Of course, there have been previous efforts to turn football into a mainstream sport in the world’s biggest market. The US hosted the World Cup in 1994 and, five years later, when the US football team beat China in the finals of the women’s World Cup, pundits predicted that this would provide the breakthrough.

Even more famously, in 2007, David Beckham moved to Los Angeles to play for LA Galaxy and opened a football academy, saying “soccer is huge all around the world except in America, and that’s where I want to make a difference”. But earlier this year sponsor AEG closed Beckham’s California soccer academy.

Why do the backers of the Fifa clothing brand think they can succeed where others have failed?

Don Jones, Tag’s chairman, says the problem in the past was that the sport failed to cement its place in mainstream US culture. “Now, sport and fashion and entertainment are interchangeable, and you have to strategise with that in mind. Clothes put the sport squarely in front of people who might not see it any other way,” he says.

Mr Costley adds that “if you buy the product, you participate in the sport in some way, so the garment itself becomes an educational platform”.

The hypothesis works like this: a customer in search of a cool T-shirt sees one with, say, a cartoonish player on the front, or a faded, “aged” looking logo; he buys it and by wearing it, becomes both a walking advertisement for the sport and, perhaps, someone who starts kicking a ball around; he might then join a league, or at least turn on ESPN soccer, and football will then, like baseball or American football, become part of their identity.

But despite Tag’s bullishness, not everyone is convinced. According to Robert Burke, founder of Robert Burke Associates, a strategic brand consultancy, a clothing brand is unlikely to achieve what a World Cup, celebrities and sport stars have not. “As with any licensing deal, the success is gauged by the size of the audience,” he says.

“The Fifa brand could be interesting, with cool designs, but it would be very small compared to the American sports of football, basketball and [ice] hockey. With regards to the product helping influence the America interest in soccer, it is a long shot. The problem is that America. . . has not embraced soccer. I don’t think a fashion product will do the trick.”

Andrew Sacks, head of Agency Sacks, a luxury branding firm, agrees. “It’s hard to believe that audiences – American or in football-loving nations – will respond to merchandise from a league,” he says. “Passions are aligned with teams, not with corporations and bureaucracies. The only exception that I can think of may be Nascar, which is a movement in itself and is made up of individuals. In team sports, the team sells.”

Tag’s products have been specially selected to appeal to the US market – both men and women – with the company’s executives working with GBG’s design team in the Netherlands. Simon Hawkins, general manager of the Fifa Football Business Unit for GBG, says: “The collections have been engineered to garner an emotional connection with the consumer through the power and history of the Fifa brand.”

To wit: for the first time, former World Cup mascots have been used on current products, with many chosen to appeal to the US demographic. For example, “Juanito” from the 1970 World Cup in Mexico, is featured to appeal to the large number of Mexican-Americans.

There is also a separate “heritage” line that focuses on Fifa’s founding in 1904 on the Rue St Honoré in Paris, with the address embossed on the shirts not unlike the way Loewe, the Spanish luxury brand, has embossed its address on wallets, and Yves Saint Laurent has on clutches. “Before, football was seen as a European sport,” says Mr Costley. “And it was presented that way. We are trying to transform that perception.”

Still, the history of such forays into the garment world is that they have not been enormously successful. As Jeff Bliss, a former marketer at New Balance, the running shoe brand, and co-founder of consultancy Brand Ideology, pointed out in Sports Business Journal: “Fan passion follows teams and players – they do not get excited about a governing body.”

Yet Tag says that to worry about the meaning of Fifa is to miss the point, which is that whatever a consumer’s relationship with the governing body, the designs stand on their own. “Soccer isn’t just a game,” says Mr Principe. “It’s a fashion statement.” That’s the goal anyway.

FINANCIAL TIMES: The new fashion retailers

FINANCIAL TIMES | VANESSA FRIEDMAN

When the women’s ready-to-wear shows begin today in New York, they will be punctuated with the many champagne-fuelled branded store openings that accompany the beginning of the fashion season, from Tommy Hilfiger in New York to Anthropologie in London and Uniqlo in Paris. There will be one retail event, however, that is unlike the others.

On Tuesday, Barneys will launch a “pop-up” shop within its Manhattan department store called Sartorialust that will, says a Barneys spokesperson, be “a temporary showcase ... which we expect to be very natty and eclectic showing how old school Italian can be mixed with designer in a very cool way.” To anyone not involved in fashion, this may not mean much, but what marks out this occasion is that the temporary space will be “curated” (ie, stocked) by a photographer called Scott Schuman.

Who?

Mr Schuman, otherwise known as The Sartorialist, is the man behind a blog of the same name that features photographs of men and women whose style he likes on the street; the pictures are posted online immediately, accompanied by a short commentary. Mr Schuman started the blog “simply to share photos of people that I saw on the streets of New York that I thought looked great” and has since travelled the world shooting regular, stylish people.

Ed Burstell, buying director at Liberty who is responsible for bringing the pop-up shop to the London store for London Fashion Week later this month, calls the blog a “cult-like hit”. The success of the site can be attributed both to Mr Schuman’s aesthetic skill – the shots are all notably well framed and lit – and his judgment: the people featured tend to look original and great, but not weird, so there is an informational aspect to the site. It isn’t sensational, but user-friendly.

However, though Mr Schuman is a talented photographer and a good judge of chic with a book based on the blog out this month, there’s nothing in his pictures to suggest he should be a retailer, or has any real retail credentials. He does have some experience in the area – he ran his own showroom in New York prior to 9/11 and worked in sales and marketing with Valentino and the distribution company Onward Kashiyama – but his blog fans don’t follow him because of that; as far as they’re concerned, he’s a name behind a lens.

Yet he and a group of fashion insiders like him – including Tyler Brûlé, founder and editor-in-chief of the magazine Monocle and a columnist for this newspaper who has opened three Monocle-branded shops on the back of an internet retail shop linked to the magazine’s website, and Nick Candy of the luxury real estate group Candy & Candy, who is planning to open retail outlets to sell the fittings and furniture from his flats even though he has no background in design – are moving out of the shadows and into the world of shopkeeping.

The result, says Robert Burke, president of the luxury consultancy Robert Burke Associates, is a “new wave” of vendors. Indeed, Mr Burke sees this as the next evolution of niche retail: after the socialite retailer (Gloria Vanderbilt, Tory Burch) and the celebrity designer (Jennifer Lopez, Sarah Jessica Parker) comes the socially networked retailer.

Thes difference is that the earlier non-trained retailers were women who clearly wore – and were photographed in – clothes that defined their style and represented a public track record of their taste. For their followers, the decision to shop at their stores was, in effect, a decision about whether or not they wanted to look like a celebrity.

By contrast, Mr Schuman and his ilk have a largely virtual track record, and with it, an even larger virtual community. Mr Schuman’s blog, for example, gets approximately 140,000 hits a day.

Monocle’s website gets 890,000 page views a month, and its shopping page has about 850 visitors per day. Compare this with the magazine’s hard copy subscription number of 12,500; if even a quarter of the online fans become bricks-and-mortar customers, the shops will be in the black.

Indeed, Mr Brûlé notes that his London store had paid for itself within a month of opening, a fact he attributes to its tiny size (“we have a 100 sq ft model,” he says), opportunity in the real estate market, purposefully low overheads and the “people who find us online or in a news agent and come to hang out”.

Likewise, he says, the store in Palma de Mallorca has worked partly because readers who knew the magazine via its online version but could not get it locally went to the boutique in search of the brand.

Similarly, Liberty’s Mr Burstall notes that one reason the store is attracted by Mr Schuman is his “fanatic” online following.

Mr Candy says the idea for his store was sparked by the number of requests from consumers who had viewed the company’s work on the web or in person, and asked if they could buy select bits of the fittings, rather than employing the firm for an entire project. “Having a store will allow people to buy into our world in a way they couldn’t before,” he says. “The great advantage is we already know them; we just have to let them know where to go.”

Just as celebrities and socialites before them could branch out into retail by taking advantage of the values and groups their media coverage generated, now the internet allows a similar move as otherwise low-profile people who would have had no opportunity to air their views can present themselves as experts in their fields simply by claiming the title for themselves. And though Mr Brûlé is arguably better known than either Mr Schuman or Mr Candy, he is still more publicly linked to Wallpaper*, his first publishing effort, than Monocle, which he has presented as a standalone (if slightly obscure) brand name.

“The media is now such that if you have a strong point of view you can put it in a blog and it will show through, even if you don’t have a lot of money,” says Mr Schuman. “Then people will find you. The blog started because I think I had read a book called Just Make Yourself an Authority and it made a lot of sense to me. I thought, ‘I know what I like, and everyone else can decide if they agree’.”

“Fashion is based on dictatorships,” says Mr Burke. “You know: the 10 must-haves of the season. What the internet has done is democratise that, so there are many more voices who can be dictators.”

Combined with the current retail climate, which has seen many stores forced into fire sales, he adds that this has created an opportunity for entrepreneurs like Mr Schuman. According to Mr Burke, a former senior vice-president of fashion at Bergdorf Goodman, department stores under financial pressure traditionally protect their bottom lines by sticking with names and brands they know and styles that they know sell, a strategy that may be safe but is rarely enough to inspire consumers to buy during difficult economic periods.

New retailers fresh from the wild, wild west of the internet and free from any obligations or history are more likely to make innovative decisions about stock that can result in sales. It’s an inversion of the current equation that sees brands with stores moving into online retail; instead, these online names are moving into bricks and mortar.

“Traditionally, luxury retailing and the internet have not gone hand-in-hand, but I think that’s because we were coming at it from the wrong direction,” says Mr Candy. “Instead of trying to move people from stores to the virtual world, we are now trying to migrate them the other way.”

FINANCIAL TIMES: Bamford looks to expand the definition of luxury

FINANCIAL TIMES

Bamford is looking for partners. The British organic luxury brand presenting its spring/summer 2009 women's wear collection in Milan has engaged Blackstone Group to help it field investment offers.

"We've come to the end of phase one, and we need a partner with more expertise in other markets," Carole Bamford says, acknowledging the extraordinary luck she has had with a label she founded from her Gloucestershire farm in 2004 on the "intuition that the timing was right to introduce a brand with a conscious." Bamford includes the eponymous women's ready-to-wear brand as well as the men's wear Bamford & Sons and the food and beauty brand Daylesford Organic (but not JCBs, the Bamford business started by her husband's father), and is characterised by its founder as "a way of life".

A more accurate description might be "our way of life". The organic ethos and the products - trapper jackets, trenchcoats and jodphurs in recycled wool, flannel and taffeta - are inspired by the pastimes of the family (the farm went organic in 1978). It is this instant "heritage", she believes, that has enabled the four-year-old brand to establish itself so quickly: 50-55 per cent growth a year for the past two years, now selling in 52 doors. But even she does not think such numbers are sustainable: "35 per cent is probably a more realistic figure."

Interest has reportedly come from the major luxury groups such as Richemont and Moët Hennessey Louis Vuitton, who have recently explored non-traditional acquisitions. Last month LVMH bought Royal van Lent, the maker of Feadship luxury yachts, while in 2007 Pinault Printemps Redoute purchased sportswear brand Puma. Also in the running are private investors, who have driven many of the sector's deals. Case in point: Labelux, the Benckiser family's holding company, which has bought Derek Lam of the US, Swiss footwear brand Bally and British jeweller Solange Azagury-Partridge in the past year.

If any of these companies were to invest in or acquire Bamford, the deal would continue the trend towards expanding the definition of the luxury market, as well as underlining the importance of a world that most groups believe may exert growing influence over their consumer base.

Bamford is the first mainstream luxury brand to make an identity out of its organic stance. Though high street brands such as Gap have added an eco component to their offering, it generally takes the form of a smaller diffusion line. Similarly, London Fashion Week showcased a number of high fashion eco-brands but they were accorded their own niche display. The only luxury brand with an overtly environmental onus is Stella McCartney (part of Gucci Group), which does not use leather products and introduced an organic skincare line last March, but they position this as a personal choice, not the brand identity. Bamford, by contrast, set out to "be as organic as possible and make it part of our DNA".

Thus it sources its cotton in India via two villages it has supported to control the use of pesticides or fertilisers, its cashmere is hand-loomed in Scotland and Tim Field has been employed as organic scientist specialist. But Bamford does use leather and fur.

"I think it's luxury," Lady Bamford says. "I know it's an area where we can be attacked, but we only use Saga furs and they are very carefully sourced and farmed. I've questioned myself about it many times, but I am satisfied." Bamford does not show on the catwalk and often re-uses designs.

Industry observers see this as working both for and against it. Robert Burke, founder of the consultancy Robert Burke Associates, thinks tougher economic conditions may lead to consumers becoming reluctant to pay an organic premium, especially from a young brand. A report from Research and Markets, however, suggests as consumers make harder choices, brands that wear their values on their sleeves could benefit.

As to whether any future partner will appreciate the investment needed to ensure organic strictures, Lady Bamford is not concerned. "I do think I will know whether someone is genuine in their interest and commitment. In the end, it's pretty easy to recognise a greenwash."

FINANCIAL TIMES: LVMH seizes spotlight with Philo appointment

FINANCIAL TIMES | VANESSA FRIEDMAN

As the women’s ready-to-wear season began on Thursday in New York, LVMH, the world’s biggest luxury-goods group, ensured all attention was on Paris by announcing the appointment of Phoebe Philo as creative director of Celine, the French fashion house. It is the style equivalent of a vice-presidential bombshell.

Ms Philo, who is British, was the designer responsible for putting Chloé, owned by LVMH rival Richemont, on to the path toward becoming a billion-dollar brand, but she resigned in 2006 to spend more time with her family.

The Celine appointment marks her long-awaited return to the industry, as well as a change in policy at LVMH, according to Robert Burke, chairman of the brand consultancy Robert Burke Associates.

“It’s an obvious shift in overall direction,” said Mr Burke. “Consumers today are more educated than they’ve ever been and they want to know who’s behind the label.”

Pierre-Yves Roussel, chief executive of LVMH’s Fashion Group, which includes the conglomerate’s smaller brands such as Givenchy, Pucci, Loewe and Marc Jacobs, said: “LVMH is fully committed to developing the potential of the brand within the group.”

After the departure of Tom Ford from Gucci in 2004, strategy in the fashion industry moved from one focused on high-profile creative talents to one focused on the brands themselves.

Little-known designers were hired such as Frida Giannini, Mr Ford’s successor at Gucci, and Ms Philo’s predecessor at Celine, Ivana Omazic.

The last time Celine had a recognisable designer at its helm was four years ago, when Michael Kors resigned. Neither his successor, Robert Menechetti, nor Ms Omaciz, managed to turn the house into one of LVMH’s “star brands”.

Ms Philo’s appointment is part of a general reshuffle. On the corporate side, Marco Gobbetti, the chief executive of Givenchy, will move to Celine to become president, and Serge Brunchswig, the current chief executive of Celine, will become chief operating officer of Christian Dior Couture, one of LVMH’s flagship brands.

Still more changes are coming, as Mr Roussel needs to fill the design chair at Pucci, which has been left empty since Matthew Williamson’s departure earlier this summer.

“Pierre-Yves Roussel obviously has a business strategy he wants to implement to turn these brands around, and we’re just starting to see it,” said Mr Burke.

Ms Philo’s first collection for Celine will be shown next February during Paris Fashion Week.

FINANCIAL TIMES: High quality can beat the credit crisis

FINANCIAL TIMES | RICHARD MILNE

Luxury goods group are traditionally hit hard by economic downturns. Lehman Brothers’ analysts point to a 25 per cent cut in earnings in the previous slowdown after the September 11, 2001, terrorist attacks on the US and say that the sector underperformed the market during the period despite its appeal to high-end customers.

LVMH, the world’s largest luxury goods group, saw its profits drop by 20 per cent in 2001. But heading into the current slowdown courtesy of the financial crisis, luxury goods companies appear upbeat.

In some ways they are right to be – they have expanded out of their long-time base in the west into faster-growing countries in emerging markets and analysts’ consensus earnings estimates for this year still point to ten per cent growth in the sector. But can they really escape a global slowdown thanks to rich customers from Dubai, Moscow and Shanghai? Or will they become yet another victim of the credit crunch in the traditional fashion?

Most industry executives insist it will be the former, but most analysts and experts believe the latter. Both sides have supporting evidence but the feeling persists that the luxury goods industry will not escape unscathed.

“At the very top end of the market is a part of the luxury goods sector that is not very cyclical and that is full of growth from the emerging markets.” says Gerry Adolph, a senior management consultant at Booz & Company. “But the aspirational brands in the middle will be the ones most sensitive to the economic slowdown.”

Argument number one for the positive view of the industry is the continued spending by the super-rich. Gerard Aquilina, head of international private banking for Barclays, says his ultra-wealthy clients have felt no effects of the credit crunch and, if anything, are more optimistic at the moment. “They look at this crisis as an opportunity. I haven’t seen a decrease in them buying luxury goods whatsoever,” he says.

That is good news for the most exclusive and traditional brands at the top end of the market such as Chanel and Hermès.

It was notable when Gucci reported mixed first-quarter sales recently that Bottega Veneta, its most upmarket brand, was the top performer, with a 32 per cent sales increase on a comparable basis.

Argument number two for the industry is exposure to emerging markets. Regions such as the Middle East and Asia have developed into main drivers of growth for many companies. Francesco Trapani, chief executive of Bulgari, says softness in the US and some parts of Europe is being offset by the strength of Asia. All of this shows how far the balance of power has shifted in the industry and how the worst-performing luxury goods companies currently are those with the highest exposure to countries such as the US and UK.

Examples abound of success in countries recently thought unable to support a big luxury goods sector – LVMH, with its stable of luxury goods from Louis Vuitton to Dom Pérignon, more than tripled its revenues in Vietnam last year while Richemont of Switzerland says it sees growth not just in China but in virtually every country in Asia.

But will the emerging markets be enough, and could the slowdown hit them eventually?

There seems little doubt that the rich of the Middle East and elsewhere, flush with oil and raw material cash, will continue to splurge. But it is less clear what will happen in other regions such as China if the ripple effects of the financial crisis reach them.

Allegra Perry, analyst at Lehman Brothers, points out that 50-60 per cent of the luxury goods industry’s consumers remain in classic, developed markets. “The most important thing right now is geographical exposure,” she says.

The naysayers have not just history to back them up but also early evidence that points to a slowdown from companies themselves – Bulgari felt slower sales growth in March, Richemont at the end of last year, while Gucci sold less in the first quarter than last year.

Top-end department stores in the US, such as Neiman Marcus and Saks, reported that it was not just aspirational luxury customers cutting back on spending but the very rich ones as well.

Robert Burke, a former luxury retail executive who is now head of Robert Burke Associates, a consultancy, says US consumers are definitely cutting back on spending but foreign tourists to the US are using the cheap dollar to go on shopping sprees.

“Is that enough to offset the losses? In some cases yes, in many others no,” he says. “When times get tough, though, the aspirational luxury buyer is pinched out of the market first.”

All experts are agreed that consumers are likely to become more discerning. And that in turn is likely to lead to a shake-out in the industry with the lower-end brands and the aspirational marques suffering the most.

“Companies selling the $10,000 to $20,000 handbag are likely to be OK but those that moved downmarket to find growth – like Burberry or even Gucci – are going to be more exposed,” says Mr Adolph.

Rogerio Fujimori, an analyst at Credit Suisse, agrees that more accessible companies such as Coach in the US are the most likely to struggle. But he says factors other than the economic slowdown will determine how luxury goods groups perform – particularly tourism flows and the related issue of currencies.

One consequence of the possible shake-out of the industry is that many expect to see a return of merger and acquisitions activity. Many in the industry still have a sour taste in their mouth from the last round of deals that peaked with the ill-timed purchase of Gucci by PPR on September 10, 2001.

But LVMH, the arch-rival of PPR, in April made its first acquisition in years when it paid several hundred million euros for Hublot, the high-end watchmaker. Experts such as Mr Burke and Mr Adolph expect to see companies from outside the sector and from areas such as Asia and the Middle East becoming involved. Mr Burke says he is advising SK Networks, a South Korean conglomerate, as well as investors from Dubai. Mr Adolph underlines that many companies still owned by the founder, such as Armani, need to decide on their development and, if they sell, whether to become part of a luxury goods conglomerate or sell to an alternative buyer.

As a sign of how investors see the sector going, rumours have already started up about Hermès, the French group that is one of the most expensive and best-protected in the sector.

Few in the industry doubt that – acquisitions or not – “some kind of slowdown is inevitable”, as Mr Fujimori says. But the jury remains out on how hard the impact will be. As in many industries the flight to quality is likely to be apparent.

Mr Burke says: “The true luxury shopper is going to be more discerning than in the past. They are going to buy fewer things and more selectively.”