WOMEN"S WEAR DAILY | MILES SOCHA DUBAI — Dubai’s ambitions for tourism are as steep as the Burj Khalifa: almost doubling annual visitors to 20 million by the year 2020.
WWD FOOTWEAR NEWS | JOCELYN ANDERSON Get ready for an all-new Bally.
FINANCIAL TIMES | VANESSA FRIEDMAN Big (literally) news on Monday in the FT that on Sunday, thanks to a government recalculation, Nigeria’s GDP has now become the biggest in Africa, and the 26th biggest in the world, valued at $509bn.
BLOOMBERG BUSINESSWEEK | COTTEN TIMBERLAKE
PARIS, France — Sophie Fiszman, a Paris finance executive with a taste for fashion, used to stick to European brands like Louis Vuitton and Gucci. No longer.
Now she shops at the Michael Kors store on Paris’s tony Rue Saint-Honoré, joining a growing contingent of European consumers who have embraced the American designer. She recently bought a blue python-print bag at the store, pleased that she could find such a purse for less than 300 euros ($412).
“The price is very good for what you get,” said Fiszman, 53, who works as co-director general for OFI Asset Management. “I like the new style they have.”
For Michael Kors Holdings Ltd., the burgeoning appeal is letting the brand outpace European luxury handbag makers in their own backyard. After challenging Coach Inc. in the U.S., Kors is opening stores near those of European rivals, aiming to steal customers with self-described “jet-set” looks and relatively low prices.
The company’s European sales more than doubled to $140.3 million during the holiday quarter, accounting for 14 percent of its total revenue. The European luxury-goods industry, meanwhile, grew just 2 percent last year, slowing from a 5 percent rate in 2012, according to Bain & Co.
Kors’s European store openings are being met with “great anticipation” and goods are selling out, according to Chief Executive Officer John Idol. The designer’s record for getting trends right is appreciated by the European shopper, who is astute about fashion, he said on a February conference call.
Biggest Market
The challenge for Kors now is winning over the holdouts — Europeans who remain leery of American attempts to produce luxury fashion. The company also is less diversified than the industry’s giants and growing from a much smaller base. LVMH Moet Hennessy Louis Vuitton SA sells everything from cognac to fine jewelry, while Kering SA owns brands ranging from Gucci to Saint Laurent.
Europe’s residents and tourists buy 34 percent of the world’s luxury goods, according to Bain, making the region the single biggest battleground for high-end brands. Globally, the industry generated about $300 billion in sales last year, Bain estimates.
The European inroads have helped send Kors’s stock up almost fivefold since its initial public offering in 2011. The shares fell 2.5 percent to $92.64 yesterday in New York.
Before the financial crisis in 2008, more luxury consumers were loyal to their favorite high-end European brand and wore it head-to-toe, said Lorna Hall, head of retail and strategy for the London fashion forecasting firm WGSN.
“They wouldn’t slum it,” she said.
Mixing Brands
Then came the recession, followed by a slow recovery. The euro region’s economy contracted again in 2012 and barely grew in 2013 after an initial rebound.
In recent years, many European consumers have been adopting more “contemporary” fashion, which often costs less than designer goods, Hall said. The Internet also has fueled an internationalization of taste, she said. That means the typical European consumer may be wearing a mix of high- and low-end brands.
“She is more open-minded,” Hall said, “She might have a Michael Kors bag and Gucci loafers and a Zara top.”
European brands have sought to tout their exclusivity by opening fewer new stores and pushing up prices, said Robert Burke, founder of a New York-based luxury consulting firm. That’s created a particularly good opportunity for Kors to step in with more affordable merchandise, he said.
Mulberry’s Struggles
Mulberry Group Plc, for instance, tried to make its brand more expensive and suffered for it. After embarking on a plan to court more upscale shoppers globally, the Somerset, England- based handbag maker saw sales shrink in its last fiscal year. Mulberry lost two-thirds of its market value, and CEO Bruno Guillon announced plans to step down last month.
A Michael Kors bag is seen as a status symbol for “smart shoppers,” since it suggests that they spent less and got more, said Pam Danziger, founder of luxury research firm Unity Marketing Inc. in Stevens, Pennsylvania.
Not everybody is a fan. Maria Maortua, a 29-year-old developer of pop-up stores in Madrid, said she has never bought a Kors purse because she feels the label is overexposed and doesn’t produce true luxury.
“The brand name appears everywhere,” she said. “That is why I don’t like it very much.”
While Kors’s European blitz hasn’t appealed to everyone, it’s helped elevate the brand from relative obscurity two years ago. In February 2012, its European holiday quarter sales amounted to barely $28 million, and just 35 percent of survey respondents in the region were aware of the designer.
‘Project Runway’
That compared with 70 percent in the U.S., where celebrities wear the brand and it has wider distribution. Michael Kors himself had gained fame for appearing as a judge on reality TV show “Project Runway.” The 54-year-old designer, who is based in New York, left that job in 2012.
Kors sought to boost its European recognition by increasing marketing and opening stores in high-profile locations. It ended last quarter with 76 European stores and plans to add 36 this fiscal year.
Idol believes the region can support 200 Kors retail locations in total, generating revenue in excess of $1 billion. Two years ago, he had only foreseen 100 stores.
Coach, based in New York, has opened stores in Europe as well, though it only has about as third as many. Kors also is expanding in the region faster than fellow American design houses such as Kate Spade & Co. and Tory Burch. Kors’s upscale locations include New Bond Street in London and Via della Spiga in Milan.
Overhead Costs
The company’s selling, general and administration expenses jumped almost 55 percent last quarter to $254.6 million, partly because of its higher store count and advertising spending.
The marketing is hard to miss, said Allegra Perry, an equities analyst at Cantor Fitzgerald in London.
“I was amazed at how much advertising there was for Michael Kors in Paris in the subway, at the bus stops, on the streets, everywhere,” she said.
At Kors stores open at least a year, sales increased 73 percent last quarter. LVMH and Kering remain much larger, though they don’t report directly comparable figures.
“We’re starting to take market share there,” Idol said on the call. Kors declined to comment for this story, as did LVMH and Kering, both of which are based in Paris.
Under 1,000 Euros
Kors uses the European formula of creating high-profile runway fashion, though it produces goods at lower prices and adds a dash of American novelty, Perry said. Most of its bags cost 300 to 1,000 euros, compared with 1,000 to 2,000 euros for its biggest European rivals, she said.
Kors has successfully appealed to the European aspirational customer, who has been hungry for new brands, as well as top-of- the-line shoppers, Burke said. The company also is siphoning off tourists, including Chinese travelers, who had been buying the French and Italian brands, he said.
“It appeals to the customer at the very high tier,” Burke said. “There are European consumers who might be able to afford any bag they want, but they want something that is fashion- forward and that is also very American classic.”
By Cotten Timberlake, with assistance from Andrew Roberts; Editor: Nick Turner
Robert Burke, Chairman & CEO at Robert Burke Associates, and Bloomberg Contributing Editor David Kirkpatrick preview fashion week and examine technology’s role in the fashion industry on Bloomberg Television’s “Bloomberg Surveillance.”
Reed Krakoff
NEW YORK TIMES | RUTH LA FERLA
Dana Taylor, a model, stood straight as a maypole as Reed Krakoff circled, paused, then peered intently at his handiwork. Ms. Taylor was wearing Mr. Krakoff’s cobalt-blue sleeveless officer’s coat, a sample from the fall collection he will show on Wednesday, a piece stripped to its essentials: welted seams, slant pockets and a pair of outsize lapels its only embellishment.
Was it too much? Too little? Mr. Krakoff considered before snatching up a swatch of matching blue leather, attaching it briefly to a lapel, then rejecting that notion, slipping it beneath the coat like a T-shirt. He toyed with the neckline, gathering it in his fingers. Then something clicked. “I like the ruched effect,” he said. “And we might finish it with a little black tape on the top.”
Then again, maybe not. With just two weeks remaining before his runway presentation in Chelsea. Mr. Krakoff was in the fitting phase of his collection, the first he will show since buying his namesake business from Coach last year to introduce a label that was conceived at the outset to compete in the fashion world’s top echelon.
Bound to strike some industry insiders as an act of sheer chutzpah, Mr. Krakoff’s departure from the company that nurtured him and that he helped recast as a global megabrand, has, on the eve of New York Fashion Week, placed him under redoubled scrutiny.
“His timing took guts,” said Robert Burke, a New York retail consultant. “The expertise and the needs in luxury fashion require a different skill set.”
Was he feeling the pressure? Not much, Mr. Krakoff said the other day, though the designer, 50, was, in fact, striving quite visibly to affect an aura of masterly serenity. Pacing his temporary headquarters in the Coach building on West 34th Street, his office a soothing medley of springy gray carpet and gray felt-covered furniture, he pondered a collection that, like Mr. Krakoff himself, is in continual flux.
Inevitably at this juncture, “nothing looks good,” Mr. Krakoff said flatly. “Then something goes well and you’re happy again. Those moments of self-doubt in between are part of the process.”
That candor was unexpected, coming as it did from the former Coach executive creative director whose octopus reach extended into clothing and accessories, advertising, store design and merchandising, and who, during his 16-year tenure at the company’s creative helm, sold handbags, fragrances, jewelry raincoats, shoes and ready-to-wear, elevating the $500 million brand into a retail behemoth with revenues of more than $4 billion.
It was, after all, Mr. Krakoff who, in a New Yorker interview after the debut four years ago of his first high-end collection at Coach, told the writer Ariel Levy, “It’s not that I have the best answer, but I have the right answer.” Indeed, Mr. Krakoff seemed fixed at the time on presenting himself, from his stern black-rimmed glasses to the elongated tips of his John Lobb shoes, as a man with a plan.
But the other day, it was a strikingly low-key, soft-spoken Mr. Krakoff who stood sliding a length of rubber-dotted lace inside a black-and-white shearling aviator coat. “Nothing I do is planful,” he said, making free with the language, as is his wont. “You are always kind of schmooshing things together to see how they feel.
“I don’t think much happens creatively if you are too much in control.”
Letting go, he said, repeatedly, has become integral to his learning curve, his method a developing process of trial and error. “Fashion is a dialogue with your customer,” he said. “You want for people to respond to your work.”
Those who have include Julianna Margulies, who wore a modestly embellished Reed Krakoff gown to the Golden Globes last month; the models Stella Tennant and Laetitia Casta, who have featured prominently in Mr. Krakoff’s advertising campaigns; and most influentially, Michelle Obama, who wore Reed Krakoff on inauguration day in 21012 and, again, for her official portrait last year.
They were clients he has never had to chase, Mr. Krakoff all but boasted the other day. When Julianne Moore, like Mr. Krakoff, an aficionado of midcentury and contemporary design, first approached him, “we found we had a lot in common,” he said. “On an aesthetic level, we really connected.”
Designer and actress cemented their friendship in the late 1990s, after he photographed her for a Coach campaign. These days she counts among her go-to pieces a leather “track bag,” an understated tote with a stark white stripe down the side, and a leather-piped black cashmere coat. “They are clean, not tricky, and they have a lot of integrity,” Ms. Moore said. “As a designer, he gets better all the time.”
But his true aesthetic beacon has been Delphine Krakoff, his wife. “Her style,” he said, “is the ultimate expression of my brand.” A gamine figure sheathed in orange or white, according to the season, Ms. Krakoff greets guests at her husband’s shows, and stands beaming her approval as the models saunter along the runway.
“Everything she does is considered, and at the same time everything feels natural,” he said. “We’re both purists.” Mr. Krakoff may consult with her by phone six times a day. “She will tell me what she likes and what she doesn’t like, and why.”
He is otherwise learning to silence the cacophony of critical voices in his head. “To me, it’s the hardest thing in the creative process,” he said. “You have to learn how to trust yourself.”
His confidence, fragile at first, has firmed by degrees. The debut in 2010 of the first Reed Krakoff collection, designed while he was still at Coach, freed him, part of the time, to stop chasing mass appeal and play, rather showily, to a more discerning, moneyed crowd.
There were flaring leather military coats, shearling jackets and belted and buckled frocks, their lines influenced obliquely by Modernists like Alexander Calder and Jean Arp, whose pieces are displayed in his townhouse on the Upper East Side. Still others seemed indebted to Helmut Lang and Phoebe Philo of Céline and industrial designers like Marc Newson, whose work has long been a touchstone and is captured on Mr. Krakoff’s Instagram account.
In all, Mr. Krakoff has positioned himself as a man of protean talents, his multiple passions moving him to create chairs and lamps and a body of black-and-white photography. Portraits of models, boxers and, most glamorously, his wife are hung from a picture rail over his desk.
“I don’t see myself as a fashion designer,” he said, explaining his restless pursuit of things streamlined and austere. “I see myself as a person in design.”
Elements of the art, architecture and furniture design that Mr. Krakoff so visibly champions have found their way into his fashions as well, the sensuous curves of an Arp table filtering onto his runway, and the hand-drawn Sharpie lines reproduced on his new porcelain collection meandering onto a shirt for fall.
That visible cross-pollination, and an adamantine refusal to be categorized, represents “a new way of doing things,” Mr. Krakoff said. So new to some that his earliest collections were greeted with skepticism or dismissed outright as starchy, pretentious and, most damningly, unwearable.
“Krakoff has a way to go,” Women’s Wear Daily wrote of his inaugural collection. “Cut from thick-looking leather, long skirts and wide pants read heavy. More significantly, often they felt like cover for a clear point of view.”
In assembling a creative team that included Valérie Hermann, formerly the president and chief executive of Yves Saint Laurent, Mr. Krakoff invited complaints of dilettantism. As Cathy Horyn put it in a review in The New York Times, Ms. Hermann “will leave her dream job to run the vanity label of Reed Krakoff, the creative director of Coach, whose one dream is apparently to be successful.”
The comments stung. They were reflected in what was widely considered a poor retail performance. Coach declined to provide sales figures. Looking back, Mr. Krakoff acknowledged that he flailed at first. “Those earlier collections were just me, trying a lot of things,” he said. “Sometimes they became too forced.”
There are signs, though, that Mr. Krakoff is loosening up. His spring 2014 collection was compelling, said Mr. Burke, the retail consultant. “There were plenty of luxurious silks, cashmeres and leathers that were sophisticated and modern, but not stiff,” he said.
Milton Pedraza, the chief executive of the Luxury Institute, a brand consulting firm, chalked up Mr. Krakoff’s bumpy ride to growing pains. “The experience of having some pushback is part of a designer’s maturation process,” he said. “I don’t think he’s been damaged by any of this.”
Certainly, Mr. Krakoff has toughened. “To get on this business,” he allowed the other day, “you need a really thick skin.”
“You need to think it doesn’t matter what other people think,” he continued, “to believe that you can invent something that’s nonnegotiable.”
And then, like a gridiron hero, to run with it.
WASHINGTON POST | Roxanne Roberts It started with sneakers. When he was about 10, Brett Johnson began customizing his white Nike Air Force 1’s, adding fabrics and touches to make them one-of-a-kind. “I felt they told a story,” he says. “And my mom would preach that women always look at a man’s shoes.”
Then again, the son of BET founders Bob and Sheila Johnson always had a leg up on other kids when it came to exploring his creative side. His personal shoe collection now numbers 600 pairs, and last fall he launched the Brett Johnson Collection, a line of luxury streetwear for men.
“Dude, I didn’t know you were ballin’ like this!” says former Redskin Darrell Green. “I look good.”
Green showed up at Johnson’s trunk show Saturday in Middleburg, where he slipped on a baby soft leather bomber vest with sheepskin trim. At $1,695, it’s the most expensive item in Johnson’s small collection; Green was also eyeing a black wool vest with leather trim ($695) and another casual jacket. According to its young creator, it’s contemporary clothing designed for fashion-savvy guys who rarely slip on suits but like high-end fabrics and craftsmanship: artists, celebrities, tech moguls and athletes of any age.
“I’m 54 next month and I’m still cool,” Green says with a laugh.
Sold. Johnson is one more satisfied customer closer to his dream.
His self-made parents are worth $1 billion or so, which they split when they divorced a decade ago. That fortune launched their children into a world of almost unlimited choices, with all the advantages and pitfalls extreme wealth can bring. Daughter Paige, 28, fell in love with horses as a young girl and is a champion equestrian; Brett, 24, wanted to be a fashion designer — one of the most challenging and competitive businesses out there.
“Brett always knew he wanted to do this, but I didn’t pay much attention to it because I thought it was just a phase he was going through,” his mother says. Loving fashion — and wearing Louis Vuitton and Lanvin — didn’t mean he could design clothes himself. Both parents insisted he go to college, where he studied sociology instead of business because, as he explains, “I have two of the best professors at home.”
But he quickly bored of classrooms and was itching to start a career in design. His mother was skeptical: “Do you understand what you’re really getting yourself into?” It took two years and a “bit of a tussle” before his parents finally agreed to let him, at age 21, dive into the fashion business.
At first, he just focused on shoes, trying to create a high-end sneaker that sold for $295, something between Nike and Gucci. He started with three styles — all with a signature orange footprint — which he shopped around. The feedback? Cool, but he needed more to create a viable line. Johnson added outerwear and polos for his first collection. (And then pants, sweaters, belts and scarves for the second.)
He headed to Florence, where he picked out leathers and fabrics and began the “very intricate” manufacturing process. Spliting time between his Arlington County home, a Bethesda office and a New York showroom, he’s both boss and student — up at 4 a.m. to micro-manage details via Skype with the Italian factory, touring tanneries to discover new leathers and finishes.
His vision: A line of “contemporary luxury” for “creatives,” all those young power players in hoodies. His designer role models are Brunello Cucinelli, the Italian designer who specializes in cashmere, and London-based Ozwald Boateng, best known for his classic bespoke suits. Johnson is trying to create a brand that blends the best fabrics with a street sensibility. “I look at it as art,” he says. “I’m tired of seeing terrible product.”
Affable but a little shy, he’s humble enough to admit he hit the family lottery and smart enough to understand how hard it will be to be taken seriously. “Being the son of Bob and Sheila Johnson creates another hurdle,” he says. “I just want my work to speak for itself.”
Easier said than done: One of the few VIP heirs with a serious fashion career is Stella McCartney — daughter of the Beatles’ Paul McCartney — who got her start in 1995 when supermodel friends Naomi Campbell and Kate Moss modeled her design school collection; just two years later, she was named head designer at Chloe. Some groused that the McCartney name jump-started her rise, but the designs established her as a talent in her own right.
Johnson has a famous name, famous friends and, like almost every other newcomer in fashion, his family as primary investors and cheerleaders.
As chairman of New York’s Parsons The New School for Design for seven years, his mother introduced him to designer friends such as Donna Karan and Tim Gunn, loaned her private plane and traveled with him to Italy to tour factories. “He had more knowledge than I had ever thought,” she says. “It was a matter of me sitting back and letting him blossom.”
Although she stayed in the background, Saturday’s trunk show was held at Sheila Johnson’s new Salamander Resort & Spa in Middleburg. Waiters offered prosecco and hors d’oeuvres as well-heeled men and women wandered in the resort’s gift shop, where Brett Johnson’s outerwear and sneakers were set up amid sweet-smelling designer soap and golf shirts. The party was something of a two-fer: A couple of family friends dropped by to offer Johnson congratulations and to wish his mother a happy birthday.
His father put up most of the start-up capital for his son’s venture. “Brett’s business model is not just a wealthy dad indulging his son,” says Bob Johnson, well aware that that’s how a lot of people might see it. “He believes in it, I believe in it, and I have some smart outside people who are advising him and encouraged by what he’s trying to achieve.”
As the biggest investor (he declined to discuss the amount), the elder Johnson required his son to come up with a business plan and said he was persuaded by his son’s passion, work ethic and design team. He’s not concerned that Brett didn’t go to design school because, well, he didn’t go to business school before founding BET, and that worked out just fine.
As investors go, a designer couldn’t ask for more: There’s no timetable in years or cap on financial support. “He’ll have time,” Bob Johnson says. “Some things will work and some things will fail, but he’ll have the time and resources to recover.”
Money, time, even fame are no guarantee of success: Rapper Kanye West had all three when he launched a women’s line in 2012. It was largely mocked by fashion insiders as a disaster, mostly because West had the resources to do anything he wanted — and (shocker) didn’t listen to advice.
Most designers last three seasons or less, doomed by a crowded field and store buyers reluctant to give floor space to unproven brands. African American designers have a harder time getting recognition: Only a handful appear in New York’s Fashion Week, and even fewer are featured in top department stores. Tracy Reese, one of the most successful black designers in business today, failed at her first attempt to launch her line. Despite all the talented African American designers working behind the scenes at major labels, none has won a prestigious Council of Fashion Designers of America award, the industry’s top prize — except Sean “P. Diddy” Combs, a celebrity who does not design his own line.
“Breaking into the market today can be challenging for young designers because there are so many brands competing for attention, but there are definitely opportunities for designers that make a strong statement or offer niche collections,” says Robert Burke, chief executive of Robert Burke Associates, a luxury retail consulting group. “If we think about designers like Alexander Wang or Jason Wu, they’ve both achieved success and recognition because they offered fresh perspectives and distinguished themselves from what others were doing.” Johnson’s resources will certainly help, he says, “but the success of that label will ultimately depend on how strong the product is, how focused it is and if it captures the attention of its target audience.”
At this point, nobody knows whether Brett Johnson will be another Stella McCartney or simply another rich kid with his logo on some shoes. The big challenge now is to win over store buyers and then customers. The collection was introduced in a soft launch at parties last fall, and he’s hoping for a New York show. There’s a Web site, ads in luxury magazines and famous friends (the Redskins’ Josh Morgan and Pierre Garcon, celebrities Kevin Hart and Bradley Cooper) interested in helping out. Johnson says he’s sold about 40 pieces of outerwear and 200 pairs of sneakers in the past two months.
“Some good traction,” he says, with a relieved smile. Or, as his father aptly put it, “He’s got runway.”
GLOBE AND MAIL | AMY VERNER After an extensive renovation and expansion, Holt Renfrew’s Yorkdale location in Toronto has doubled in size and, some would say, in lustre. In-store boutiques from Prada, Gucci and Louis Vuitton face into the mall and give the facade the feeling of a prime shopping strip in Europe. A new beauty floor features exclusive-in-Canada brands such as Aesop and private “cabines” for specialized facial treatments. And, as a finishing touch, tucked away from sight down a corridor past the lingerie is The Apartment.
Technically, the 1,000-square-foot space is a private shopping suite. But, as its name suggests, it can be used as more than your usual souped-up change room. Guests can host a Parisian-themed lunch for friends in it, for example, or even a small reception for a visiting designer. They can stop by with the kids after school and let them play jury while their parents overhaul their work wardrobe. The suite can even be the site of an after-hours shopping surprise for a friend or partner. Think of it as a fashioncentric home away from home.
The space, designed by the New York firm Janson Goldstein, does indeed have the feel of a swish flat, complete with a full ensuite bathroom and kitchen in a style that can be described as a carefully calibrated blend of classic and contemporary. It’s just a shame that Holts isn’t selling the space’s decorative accents. Take the bronze light fixture with smoked glass shades by Lindsey Adelman Studio. If it were up for grabs, surely someone with the means to purchase a trousseau of resort wear might be tempted to throw in a cool chandelier.
This raises the question of tenancy: To begin, The Apartment will be available on a complimentary basis to Holt Renfrew’s “high-value clients” – that is, the store’s big spenders and longstanding customers. Like unlocking a bonus secret door in a video game, the suite represents a next-level amenity designed to keep Holt Renfrew top of mind for those who now shop through a myriad of other channels.
“Department stores have realized for quite some time that a small percentage of customers can make up 65 to 70 per cent of the luxury business,” says Robert Burke, founder of an eponymous retail consulting firm and former senior vice-president of fashion and public relations at Bergdorf Goodman. “The department stores have become very focused on marketing and appealing to that high-net-worth spender.”
And, to be sure, the features in private shopping suites have been edging ever upward. At Paris’s Le Bon Marché, new suites geared towards women and men, designed by Jean Louis Faillant Dumas from the agency LOVE, opened in November. Entry comes at the cost of €150 for two hours or €350 for the half-day and includes a wardrobe consulting service.
At Selfridges in London, a spacious 5,200-square-foot personal shopping “retreat” that draws inspiration from the apartment of the avant-garde art-deco-era interior designer Syrie Maugham was unveiled in August 2012. Nine individual suites are arranged around a library, bar and drawing room.
But bigger isn’t always better. As Janson Goldstein partner Steven Scuro notes, the design team bestowed Holt Renfrew’s space with residential features (club chairs, an ottoman as big as a daybed, a bar cart, lighting on dimmer switches) and was conscious of the need for numerous seating areas without having the layout resemble a hotel lobby. The grid of metal shelving can be merchandised with the latest Louboutin heels and Givenchy handbags, to give it the feel of a private dressing room, or propped with books and objets d’art for an exclusive-club effect.
And this, Holt Renfrew divisional vice-president and general manager of its Yorkdale location Barbara Wolfson says, helps to underscore the difference between shopping from your sofa at home and a plush in-store settee. “There’s still a big part of the shopping population that doesn’t get the experience they want from spending off the Internet,” she says. “And it is still our role to provide a number of things that make people want to come in.”
Or as Burke puts it, “It’s important for stores to look up to date and the idea of a basic dressing room is no longer appealing to the luxury customer. Their standards are higher now.”
NEW YORK TIMES | ELIZABETH A. HARRIS
All of a sudden, Ugg boots were everywhere. Knee-high Hunter rain boots also seemed to sprout from the ground directly onto millions of American feet. And last year, denim in the colors of Skittles candies, like green and red, were inescapable.
So what is the must-have item in apparel this year that beckons last-minute gift shoppers, the trend that is hotter than all others?
Unfortunately for retailers, there isn’t one.
“Every year there seems to be something, but I would say, this year, there’s not one standout thing,” said Eva Chen, editor in chief of Lucky magazine. “It’s the culmination of an entire year of personalization and smaller microtrends.”
Retailers have been girding for a difficult holiday shopping season this year, with wages stagnant and consumers wary. A major fashion trend can offer companies a traffic boost and can draw attention to their clothes.
But so far, no such luck. Perhaps it’s a marketing miss or overall consumer apathy. Some even suggest that the ubiquity of gift and fashion showcases on the Internet makes it difficult for one item to shine.
“Periodically you’ll see it with a particular demographic, like teens, but I can’t remember a time when it was quite this clear-cut, and quite so much across the board,” said John D. Morris, an analyst at BMO Capital Markets. “Merchants would say you can’t know when it starts, when it ends, or how long it lasts,” he said of major trends, “but you know it when you’re in it — or when you’re not.”
Plenty of items are fashionable and trendy. Leather is very popular, for example, and even Uggs are still plentiful in stores. Macy’s, which announced strong earnings for its third quarter this year, says its shoppers have spread their interest across a variety of categories, including sweaters, boots, coats and fragrances.
While there are many smaller trends, retail analysts and fashion experts say that a truly dominant trend, available across a spectrum of prices and appealing to various demographic groups, is something different.
“It makes it easier to buy, to market, and to sell when there’s a very defined theme or trend, and even easier when there is a must-have item,” said Robert Burke, a former fashion director at Bergdorf Goodman and a prominent industry consultant.
Analysts and fashion editors say that traffic and sales can get a modest boost when an item catches fire, as skinny jeans did for men some years ago, perhaps because there is more excitement in the air, or because consumers don’t have to spend as much time trying to figure out what they want to buy.
In some cases, a powerful trend can be even be like the tide that lifts all boats. Richard E. Jaffe, an analyst at Stifel, said the brightly colored denim trend had a “pervasive effect” on apparel last year and the year before.
“If you had bright jeans, you couldn’t wear the same top in muted earth tones,” he said. “And the reality is you need two tops for every bottom, and if you’re wearing skinny jeans you need new shoes.”
“Now, that doesn’t exist,” Mr. Jaffe said. “So what’s on the top of the gift list for your family and friends? Chocolate?”
Mr. Burke said the “billion dollar question” was why some trends raced to the head of the pack, while others just puttered along.
“As much as you want to push trends and push a must-have item, they tend to have a life of their own,” he said.
Mr. Morris of BMO Capital Markets said the lack of a cohesive trend this year might be traceable to the economy. Making a big bet on a particular item entails some risk, and in a shaky economy retailers are often unwilling to do so. Some in the fashion world say consumers have been gravitating toward more individual style this year, like monogrammed items, for example, which is a trend in itself.
Others point instead to the Internet.
Today, a trend can zip around the world on the back of blog posts or a Twitter message, so items can flare up and spread — and burn out, some say — far more quickly than in the past.
Melissa Davis, the general manager of ShopStyle.com, said that the Internet had also made the message of what’s hot much more diffuse, so it is more difficult for one item to stand out.
“Traditionally, you would open up a magazine or walk into a well-merchandised store and you knew what the hot item was,” Ms. Davis said. Now, instead of a handful of publications and a few personalities, people can find fashion on countless blogs, and even sites like Pinterest.com. “Discovery is everywhere,” she said.
Not everybody in fashion agrees that “there is no hit-you-over-the-head item,” as Mr. Burke put it. Ken Downing, fashion director at Neiman Marcus, said biker jackets had been a huge seller this year. Joyann King, digital director at Harper’s Bazaar, said that leather leggings, both real and fake, were the item of the moment.
“There’s always got to be one,” Ms. King said. “Even if people disagree.”
There have also been memorable duds. “Retailers have been trying to jump-start corduroys” for years, said Mr. Morris of BMO Capital Markets. “They haven’t.”
Erika Serow, who will take over as head of Bain & Company’s North America retail practice, cautioned that the lack of one unforgettable item this year doesn’t prophesy a long-term trend. And not everyone is discontented by the absence of a hit.
“When there’s one big thing, people are a little bit on autopilot,” said Ms. Chen of Lucky magazine. “Isn’t it better to get what you want, and not what everybody wants?”
BLOOMBERG | KATIA DMITRIEVA
Bain Capital LLC, the global private investment firm with $70 billion in assets under management, bought a majority stake in Canada Goose Inc., the maker of parkas worn by researchers at the South Pole.
Dani Reiss, chief executive officer of Canada Goose, will remain in his position and will keep a “significant minority stake” in the company, according to a statement today. The price wasn’t disclosed.
“Bain Capital has a long and impressive track record of successfully investing in beloved Canadian companies, and we are thrilled to bring them on board,” Reiss said in the statement.
Bain Capital, based in Boston, has invested in other Canadian retailers and consumer brands including Toronto-based Shoppers Drug Mart Corp. and BTI Systems Inc.
Canada Goose, which began in a small warehouse in Toronto about 55 years ago and is headquartered in that city, employs more than 1,000 people. Its fur-lined coats are sold in 50 countries, and are used by researchers in the South Pole and the Canadian high Arctic, the company said.
Canaccord Genuity Group Inc. (CF) advised Canada Goose, with financing for the deal provided by Canadian Imperial Bank of Commerce.
Robert Burke Associates Chairman and CEO Robert Burke discusses the high end retail holiday shopping season on Bloomberg Television's "Bloomberg Surveillance."
Full episode of "Bloomberg Surveillance." Guests include Belus Capital Advisors Chief Equities Strategist Brian Sozzi, Bugaboo Chief Marketing Officer Madeleen Klaasen and Robert Burke Associates Chairman and CEO Robert Burke.
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.”
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.”
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”.